Business Law

Case Description

Situation A. Andy Warhol was a painter and one of his subjects was mugs painted to look like cans of Campbell soup. A genuine Warhol mug sells for $35,000 plus. At a street fair a vendor had mugs for sale with various designs and messages. Most mugs were $5-$12 each. One of the mugs looked just like a can of soup. It was on a different shelf. A customer asked if it was real and was told "Looks just like a soup can". When the customer asked the price, they were told $75. They paid for the mug and tried to sell it to a gallery who told them it was not a Warhol and only worth $15.

Situation B. Mink coats cost $6,000-$15,000, rabbit coats cost $400-$1,000. Rabbit fur can be treated to feel like mink but the treatment fades after about six months. A shopper was trying on fur coats. They put on one that looked and felt like real mink. It was actually rabbit fur that was treated with chemicals to make it feel like mink. She asked a salesperson if it was mink and was told "Check the Label". The label said "imported fur, enhanced". She paid $2,500 for the coat and was told "all sales final, no exchange, no refund". After six months the fur started feeling like rabbit and she showed it to a furrier who told her it was dyed rabbit. Customer sued the store for fraud.

Situation C. Note that insulin, a drug needed by diabetics can be dispensed by a pharmacist without a written prescription as long as the customer knows the strength they need. Once a customer leaves the store with a prescription medicine the pharmacist may not accept a return (NY State law). A 17-year-old diabetic walked into a pharmacy and asked for insulin. They told the pharmacist that they did not have their insurance information and would have to use a credit card. They handed the pharmacist their Visa card and were given the doses they asked for. The normal charge for the insulin they were given was $100. When they looked at the Visa charge it was $600. They tried to return the unused insulin and cancel the charge. The pharmacist refused to accept the return or cancel the charge. The 17-year-old then tried to reverse the charge on their Visa because they were overcharge.

(Situation A) The customer tried to get their money back from the merchant because they were defrauded. Who will win, merchant of customer? Why or why not?

(Situation B) Can the customer sue for fraud? Why or why not?

(Situation C) What should the outcome be?