Coach JohnsonUnderstanding Business and Personal Law

What is the UCC and what is its purpose?

What is a warranty? What happens when a sales contract is

breached? Why is it necessary for consumers to

be protected against unethical practices?

How are businesses liable for products sold to consumers?

UCC (Uniform Commercial Code) Business statutes

Combine commerce laws = Single unified code▪ Simplified, clarified, and modernized laws ▪ All relate to commercial transactions

(Buying/Selling)View the UCC

▪ Governs: ▪ Oral▪ Written▪ Internet Sales▪ Also some leasing of Goods (Tuxedos, Cars, etc)

Formation of ContractsWarranties and Product Liability

Express Warranties1. Statement of fact or promise by seller

a) “This car is fully functional and working”2. Description of goods

a) “Will not burn or irritate skin”3. Use of sample or model

a) “See Picture A for example” Written Warranties

$15 or more (must be given) (what is an example?)

▪ 15 days, 30 days, 90 days, 1 year, etc Why?

Implied Warranties Not written Only goods, not services Must have seller, buyer, good, price

Three Types:1. Warranty of Fitness for a particular purpose

a) Ask store clerk for assistance in buying correct paint2. Warranty of Merchantability

a) Properly packaged, made3. Usage of Trade

1. Items are equal and in the condition stated2. Ex: Stolen Items, Liens, No Paperwork, etc

Magnuson-Moss Warranty Act Involve Interstate commerce Buy and Sell across states Product over $10 and sold across states

Must express one of the two:1.Full – Fix or Replace2.Limited - Anything Below Full (parts, not

labor)

Caveat Emptor vs. Caveat VenditorWhat questions to ask?

Where are they manufactured? Do they perform as advertised (how do

you know) Is it worth the cost/risk?

Retailer Wal-Mart Best Buy

Manufacturer Microsoft Norelco

Federal Trade CommissionBetter Business BureauCourts

Do not have to give Warranty but; Seller must refrain from making any

express warranties Use appropriate language that will

exclude implied warrantiesExample: Disclaimer

A product you bought was defective The company clearly stated warranty or; The company implied product was

something it was not Compose a one-page Business Letter

to company Describe complaint, argument (find the

actual companies warranty), solution, and conclusion to letter. Make sure to stick to Business Letter format.

Bring in a product that represents a “claim” Best Shampoo on market Better 3G coverage Funnier than “The Hangover”

You have two days to bring in your product, and you will have to explain it to class for a daily grade

Cease and Desist OrdersBait and SwitchUnordered Merchandise

Sample or Gift Cannot send a Bill

Must ship within stated time 30 days if not stated Contract/Order can be cancelled it not

Item must be as described Cannot be a “representation” of

something or replica unless stated

If injured from a product Can recover damages for loss

Strict: Manufacturer sold product (not another

buyer) Product unreasonably dangerous Defect caused injury Defect was not caused by user Harm came from use

Must bear name of Manufacturer Can’t be sold after date Common name must be given Can remove at anytime if proved to be

harmful Ways to discourage some products:

High Taxes (Cigarettes and Alcohol) Warning Labels (Cigarettes, Cough Syrup,

etc) Prohibition (Cigarette ads)

A B C’s of Federal Trade Commission Poster

Partners Given