Questions and Answers of The Legal Environment

Go to http://www.tenantsunion.org/tulist.html, and search for the law of your state concerning a landlord’s obligation to provide a habitable apartment.Now assume that you are living in a rental
The Federal Trade Commission (FTC) prohibits“unfair and deceptive acts or practices.” A practice is unfair if it meets the following three tests:• It causes a substantial consumer injury.•
The FTC considers an advertisement to be deceptive if it contains an important misrepresentation or omission that is likely to mislead a reasonable consumer.
FTC rules prohibit bait and switch advertisements.A merchant may not advertise a product and then disparage it to consumers in an effort to sell a different item.
The FTC prohibits telemarketers from calling telephone numbers listed on its do-not-call registry.
Consumers may keep as a gift any unordered merchandise that they receive in the mail.
Under the FTC door-to-door rules, a salesperson is required to notify the buyer that she has the right to cancel the transaction prior to midnight of the third business day thereafter.
In all loans regulated by the Truth in Lending Act (TILA), the disclosure must be clear and in meaningful sequence. The lender must disclose the finance charge and the annual percentage rate.
In the case of a high-rate home equity loan, the lender must notify the consumer at least three business days before the closing that (1) he does not have to go through with the loan (even if he has
Under TILA, consumers have the right to rescind a mortgage (other than a first mortgage)for three business days after the signing. If the lender does not comply with the disclosure provisions of
Under TILA, a credit card holder is liable only for the first $50 in unauthorized charges made before the credit card company is notified that the card was stolen. If, however, you wait more than two
In the event of a dispute between a customer and a merchant, the credit card company cannot bill the customer if:• She makes a good faith effort to resolve the dispute;• The dispute is for more
Under the Fair Credit Billing Act, a credit card company must promptly investigate and respond to any consumer complaints about a credit card bill.
Under the Fair Credit Reporting Act:• A consumer report can be used only for a legitimate business need;• A consumer reporting agency cannot report obsolete information;• An employer cannot
The Fair and Accurate Credit Transactions Act permits consumers to obtain one free credit report every year from each of the three major reporting agencies.
Under the Fair Debt Collection Practices Act, a debt collector may not harass or abuse debtors.
The Equal Credit Opportunity Act prohibits any creditor from discriminating against a borrower on the basis of race, color, religion, national origin, sex, marital status, age, or because the
The Magnuson-Moss Warranty Act requires any supplier that offers a written warranty on a consumer product costing more than $15 to disclose the terms of the warranty in simple and readily
The Consumer Product Safety Commission evaluates consumer products and develops safety standards.
In August, Dorothy Jenkins went to First American Mortgage and Loan Association of Virginia (the Bank) to sign a second mortgage on her home. Her first mortgage was with a different bank. She left
YOU BE THE JUDGE WRITING PROBLEM Process cheese food slices must contain at least 51 percent natural cheese. Imitation cheese slices, by contrast, contain little or no natural cheese and consist
Joel Curtis was two and his brother, Joshua, was three years old when their father left both children asleep in the rear seat of his automobile while visiting a friend. His cigarette lighter was on
Thomas Pinner worked at a Sherwin-Williams paint store that was managed by James Schmidt.Pinner and Schmidt had a falling out when, according to Pinner, “a relationship began to bloom between
Kathleen Carroll, a single woman, applied for an Exxon credit card. Exxon rejected her application without giving any specific reason and without providing the name of the credit bureau it had used.
In October, Renie Guimond discovered that her credit report at TransUnion Credit Information Co. incorrectly stated that she was married, used the name “Ruth Guimond,”and had a credit card from
The National Coalition for Consumer Education and MasterCard International created the following quiz to help consumers find out how smart they are about buying on credit:• What’s the best way to
Thomas Waldock purchased a 1983 BMW 320i from Universal Motors, Inc. It was warranted “to be free of defects in materials or workmanship for a period of three years or 36,000 miles, whichever
When customers called the number provided, New Rapids Carpet Center, Inc., sent salespeople to visit them at home to sell them carpet that was not as advertised—it was not continuous filament nylon
ROLE REVERSAL Prepare a short-answer question that focuses on deceptive advertisements.Include a sample ad in the question (either a real ad or one that you have made up)
The Consumer Product Safety Commission(http://cpsc.gov) lists products that have been recalled and provides consumers with a telephone number for contacting the manufacturer. Choose a recalled
Under the Clean Air Act of 1970, the Environmental Protection Agency must establish national ambient air quality standards for both primary and secondary pollution. States must produce implementation
Under the Clean Air Act, power plants may trade emission allowances.
The Clean Water Act prohibits the discharge of pollution into water without a permit from the EPA. States must set EPA-approved water quality standards and develop plans to achieve them.The Clean
Lee contracts to paint Sally’s two-story house for $2,500. Sally realizes that she will not have sufficient money, so she transfers her rights under this agreement to her neighbor Karen, who has a
Assume that Lee agrees to the assignment of the house-painting contract to Karen as stated in question 3. Thereafter, Lee fails to perform the contract to paint Karen’s house. Karen sues Sally for
Washington purchased an automobile from Smithville Motors. The contract called for payment of the purchase price in installments and contained the defense preservation notice required by the Federal
Industrial Construction Co. wanted to raise money to construct a canning factory in Wisconsin. Various persons promised to subscribe the needed amount, which they agreed to pay when the construction
The Ohio Department of Public Welfare made a contract with an accountant to audit the accounts of health care providers who were receiving funds under the Medicaid program. Windsor House, which
Metalcrafters made a contract to design a new earth- moving vehicle for LamarHighwayConstructionCo.Metalcrafters was depending on the genius of Samet, thehead of its research department, to design a
The Tinchers signed a contract to sell land to Creasy. The contract specified thatthe sales transaction was to be completed in 90 days. At the end of the 90 days,Creasy requested an extension of
Acme Hydraulic Press Co. manufactured large presses and sold themthroughout the United States. The agreement-of-sale contract that Acmeexecuted with its customers specified that they could make no
Protein Blenders, Inc., made a contract with Gingerich to buy from him the shares of stock of a small corporation. When the buyer refused to take and pay for the stock, Gingerich sued for specific
FNBC is a business brokerage firm that assits in the purchase and sale of businesses. Jennings and Hennessey were independent contractors working for FNBC. They left FNBC, and FNBC sued them for
Paul Parrino purchased from Dave’s Professional Wheelchair Service a wheelchair manufactured by 21st Century Scientific, Inc. The sales brochure from 21st Century Scientific stated that the
Webster ordered a bowl of fish chowder at the Blue Ship Tea Room. She was injured by a fish bone in the chowder, and she sued the tea room for breach of the implied warranty of merchantability. The
Andy’s Sales (owned by Andy Adams) sold a well-built trampoline to Carl and Shirley Wickers. The Wickerses later sold the trampoline to Herbert Bryant.While using the trampoline, Herbert’s
Syrovy and Alpine Resources, Inc., entered into a “Timber Purchase Agreement.” Syrovy agreed to sell and Alpine agreed to buy all of the timber produced during a two-year period. The timber to be
Fastener Corp. sent a letter to Renzo Box Co. that was signed by Ronald Lee, Fastener’s sales manager, and read as follows: “We hereby offer you 200 type#14 Fastener bolts at $5 per bolt. This
Webstar Corp. orally agreed to sell Northco, Inc., a computer for $20,000.Northco sent a signed purchase order to Webstar confirming the agreement.Webstar received the purchase order and did not
Steel Industries, Inc., ordered steel from Interlink Metals & Chemicals. Thesteel was to be delivered from a Russian mill. There were political and otherissues in Russia, and the mill was shut down.
A computer manufacturer promoted the sale of a digital computer as a“revolutionary breakthrough.” The manufacturer made a contract to deliver oneof these computers to a buyer. The seller failed
Rockland Industries is a Maryland corporation that manufactures draperylining fabrics. Rockland uses approximately 500,000 pounds per year ofantimony oxide, a fire retardant, on its fabrics.
Shipper was ill for 14 months. His wife did not take care of his affairs carefully, nor did she examine his bank statements as they arrived each month. One of Shipper’s acquaintances had forged his
Gloria maintains a checking account at First Bank. On the third day of January, the bank sent her a statement of her account for December accompanied by the checks that the bank had paid. One of the
Dean bought a car from Cannon. As payment, Dean gave him a check drawn on South Dorchester Bank of Eastern Shore Trust Co. Cannon cashed the check at the Cambridge Bank of Eastern Shore Trust Co. The
Hixson paid Galyen Petroleum Co. money he owed by issuing three checks to Galyen. The bank refused to cash the three checks because of insufficient funds in the Hixson account to pay all three.
On August 1, 1987, Dori Leeds signed a “guarantee of credit” with Sun Control Systems, which guaranteed “the prompt payment, when due, of every claim of [Sun Control Systems] against [Dori
Gilbert signed a guaranty for the benefit of his son with Cobb Exchange Bank.The guaranty included all extensions and renewals of the son’s obligation.Subsequently, a renewal of the note added an
Hugill agreed to deliver shingles to W. I. Carpenter Lumber Co. and furnished a surety bond to secure the faithful performance of the contract on his part. After a breach of the contract by Hugill,
First National Bank hired Longdon as a secretary and obtained a surety bond from Belton covering the bank against losses up to $100,000 resulting from Longdon’s improper conduct in the performance
Colgate-Palmolive Co. ran a television commercial to show that its shaving cream, Rapid Shave, could soften even the toughness of sandpaper. The commercial showed what was described as the sandpaper
Iberlin and others subscribed to the services of TCI Cablevision of Wyoming, which imposed a $2 late charge on any bill not paid when due. Iberlin brought suit against the company, claiming the late
The town of Newport obtained a corporate MasterCard that was given to the town clerk for purchasing fuel for the town hall. The town clerk used the card for personal restaurant, hotel, and gift shop
Classify each of the following activities as proper or prohibited under the various consumer statutes you have studied.a. Calling a hospital room to talk to a debtor who is a patient there.b. Calling
Alpha University has an arrangement with a Axis Credit Card Company to collect 1 percent on all credit card charges made by students who obtain their cards through booths on the Alpha campus. Do any
Can a creditor of both the husband and wife under the same obligation obtain an execution against a Winnebago mobile home owned by the husband and wife in tenancy by entirety?Appendix
Joe obtained a box of antique Lenox china dishes that had been left at the Mashpee town dump. He supplemented the sizable but incomplete set of dishes with other Lenox pieces found at antique
JoyceClifford gave a check for $5,000 to her nephewCarl to help with living expenses for his last year of college. The face of the check stated, “As a loan.” Years later, Carl wrote to his aunt
Ruth and Stella were sisters. They owned a house as joint tenants with right of survivorship. Ruth sold her half interest to Roy. Thereafter, Stella died, and Roy claimed the entire property by
What social forces are involved in the rule of law governing the liability of a common carrier for loss of freight?Appendix
American Cyanamid shipped 7,000 vials of DPT—a vaccine for immunization of infants and children against diphtheria, pertussis, and tetanus—from its Pearl River, New York, facility to the U.S.
Compare the liens of carriers, warehouses, and hotels in terms of being specific.Appendix
A guest in a motel opened the bedroom window at night and went to sleep.During the night, a prowler pried open the screen, entered the room, and stole property of the guest. The guest sued the motel.
On March 30, Emery Air Freight Corp. picked up a shipment of furs from Hopper Furs, Inc. Hopper’s chief of security filled in certain items in the airbill.In the box entitled ZIP Code, he
Schock, the buyer, negotiated to purchase a mobile home that was owned by and located on the sellers’ property. On April 15, 1985, Schock appeared at the Ronderos’ (the sellers’) home and paid
A thief stole a car and sold it to a good-faith purchaser for value. This person resold the car to another buyer, who also purchased in good faith and for value.The original owner of the car sued the
Using a bad check, B purchased a used automobile from a dealer. B then took the automobile to an auction at which the automobile was sold to a party who had no knowledge of its history. When B’s
Would buying a car from a mechanic who works at a car dealership qualify as purchasing a car in the ordinary course of business? [Steele v Ellis, 961 F Supp 1458 (D Kan)]Appendix
Does a pawnbroker who purchases property in good faith acquire good title to that property? Can the pawnbroker pass good title? [Fly v Cannon, 813 SW2d 458 (Tenn App)]Appendix
Larsen Jewelers sold a necklace to Conway on a layaway plan. Conway paid a portion of the price and made additional payments from time to time. The necklace was to remain in the possession of Larsen
Without permission, Grissom entered onto land owned by another and then proceeded to cut and sell the timber from the land. On learning that the timber had been sold, the owner of the land brought an
Brown Sales ordered goods from Eberhard Manufacturing Co. The contract contained no agreement about who would bear the risk of loss. There were no shipping terms. The seller placed the goods on board
Bond purchased a painting from Wool, who is not in the business of selling art.Wool tendered delivery of the painting after receiving payment in full from Bond. Bond informed Wool that Bond would be
If goods have been delivered to a buyer pursuant to a sale or return contract, the:a. Buyer may use the goods but not resell themb. Seller is liable for the expenses incurred by the buyer in
Firwood Manufacturing Co. had a contract to sell General Tire 55 model 1225 postcure inflators (PCIs). PCIs are $30,000 machines used by General Tire in its manufacturing process. The contract was
Soon after Gast purchased a used auto from a Chevrolet dealer, he experienced a series of mechanical problems with the car. Gast refused to make further payments on the bank note that had financed
Mrs. Kirby purchased a wheelchair from NMC/ Continue Care. The wheelchair was customized for her and her home. When the wheelchair arrived, it was too wide to fit through the doorways in her home.
Wolosin purchased a vegetable and dairy refrigerator case from Evans Manufacturing Corp. When Evans sued Wolosin for the purchase price, Wolosin claimed damages for breach of warranty. The sales
Ramtreat Metal Technology provided for a “double your money back” remedy in its contracts for the sale of its metal drilling assemblies. A buyer filed suit seeking consequential damages and cost
Charter Bank of Gainesville had in its possession a note containing the following provision: “This note with interest is secured by a mortgage on real estate, of even date herewith, made by the
On October 14, 1980, United American Bank of Knoxville made a $1,700,000 loan to Frederic B. Ingram. William F. Earthman, the president of the bank and a beneficiary of the loan, had arranged for the
George S. Avery signed a letter regarding the unpaid balance on a $20,000 promissory note owed to Jim Whitworth in the form of a letter addressed to Whitworth stating: “This is your note for
Lloyd and Mario Spaulding entered into a contract to purchase property from Richard and Robert Krajcir. The two Spaulding brothers signed a promissory note to the Krajcir brothers with the following
Master Homecraft Co. received a promissory note with a stated face value from Sally and Tom Zimmerman. The note was payment for remodeling their home and contained unused blanks for installment
The text of a handwritten note stated simply that “‘I Robert Harrison owe Peter Jacob $25,000 …,’ /s/ Robert Harrison.” Peter Jacob sought to use the handwritten note as a negotiable
Helen Thomas contracted to purchase a pool heater from Sunkissed Pools. As part of the $4,000 contract, Sunkissed agreed to install the pool heater, which was delivered to Thomas’s home and left in
Coppola, who collected coins, joined a coin club, First Coinvestors, Inc. The club would send coins to its members, who were to pay for them or return them within 10 days. What was the nature of the
Future Tech International, Inc., is a buyer and distributor of Samsung monitors and other computer products. In 1993, Future Tech determined that brand loyalty was important to customers, and it
Which of the following statements applies to a sale on approval under the UCC Sales Article?a. Both the buyer and seller must be merchants.b. The buyer must be purchasing the goods for resale.c. Risk
Cey Corp. entered into a contract to sell parts to Deck, Ltd. The contract provided that the goods would be shipped “FOB Cey’s warehouse.” Cey shipped parts different from those specified in

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