Practice Consumer Law

Contracts

Lorenzo, or if she signs an agreement to pay $150, there is an acceptance. They have agreed to the exact terms. The motorcycle being exchanged for the money is the exchange of consideration. Both parties are competent, and the agreement is not illegal or against public policy. Therefore, a contract has been made.

You should not be too quick to enter into a contract. Be sure you understand and agree with all the terms before you accept; otherwise, it may be too late to back out of the deal.

Minors and Contracts

A minor is a person under the age of legal majority (18 in most states). Minors may make contracts. However, as a general rule, they cannot be forced to carry out their promises and may cancel or refuse to honor their contracts. Minors who cancel contracts usually must return any goods or consideration still in their possession. This rule is designed to protect minors from being taken advantage of because of their age and lack of experience. However, minors may have a tough time getting credit because of this rule. Many stores require minors to have a parent or other adult cosign any major contract. The adult cosigner is responsible for making payments if the minor backs out of the deal.

Minors may, however, be held to contracts that involve necessities, such as food, clothing, shelter, or medical aid. Minors can be required to pay for the reasonable value of such goods and services.

In most states, a minor who continues making payments on a contract after reaching the age of majority is considered to have ratified the contract. Once the contract has been ratified, it can no longer be canceled.

Find the equivalents of the following words and expressions in the text.

Выполнять обещание; затрагивать чьи–то права; условия контракта; взаимное соглашение; подразумевать; компенсация; дееспособный; заключать договор; уклониться от сделки; совер- шеннолетие; выполнять условия контракта; защитить несовер- шеннолетних; лицо, подписывающее контракт вместе с другим лицом; медицинская помощь; ратифицировать контракт.

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Answer the questions:

1.What is a contract?

2.What happens if one party to a contract does not carry out the promise?

3.Why is it important to understand how contracts are formed and how they affect your rights?

4.What are the elements of a contract?

5.What is mutual agreement?

6.What is an exchange of consideration? How does it work? Give your own example.

7.Why must people entering into a contract be legally competent?

8.What kinds of agreements are not enforceable in court?

9.Why shouldn’t you be too quick to enter into a contract? Why is it important to read a contract before signing it?

10.Can minors make contracts? What is special about such contracts?

11.What is an adult cosigner responsible for?

Problem–solving:

1.Keith, 16, a drummer in a popular band, goes to a local music store to purchase a new set of drums. The drums cost $750. He offers to put down $150 and make monthly payments on the remaining amount. Because Keith is only 16, the manager of the store refuses to sell him the drums. Is this fair? Is this legal?

2.For each of the following situations, decide whether a contract has been made. Give your reasons.

a. An auctioneer says, “What am I bid for this antique sofa?” Someone in the crowd says, “$300.”

b. Adam says to Basil, “I’m going to sell my car for $500.” Basil replies, “All right, here is the money. I’ll take it.”

c. The citizens of a small town collect $1,000 and offer it as a reward for the capture of a suspected criminal. The sheriff captures the suspect and seeks the reward.

d. Sara’s father promises to pay her $1,000 when she turns

18.On her 18 birthday, she seeks the money.

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Contracts

e.Standing at one end of a long bridge, Shelly says to Lynn, “I’ll give you $5 if you walk across the bridge.” Lynn says nothing but starts walking across the bridge.

f.Liz offers Sharon $100 to steal four hubcaps for her sports car. Sharon steals the hubcaps, brings them to Liz, and asks for the money.

Match the words on the left with the correct definition on the right:

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Practice in Consumer Law

UNIT 16.

Written and Oral Contracts

Read and translate the texts.

Most contracts may be either written or oral (spoken). However, certain kinds of contracts must be in writing to be enforceable. These include contracts for the sale of land or real estate, contracts for the sale of goods priced at $500 or more, agreements to pay another person’s debt, and agreements that cannot be performed within a year from the date of the agreement.

The law favors written contracts. For your protection, it is always better to have a written contract. Otherwise, it can be difficult to prove that a party promised to do something. If there is a written contract, a court will not listen to evidence of promises made before the signing of the contract except when the written contract is unclear or one party was tricked into entering the contract.

Illegal Contracts

Some contracts are unenforceable in court because they are illegal or against public policy. For example, an agreement between two persons to sell illegal drugs could never be enforced in court.

In addition, courts sometimes find that a contract is so unfair, harsh, and oppressive that it should not be enforced. Such a contract is considered to be unconscionable.

Courts will usually not refuse to enforce a contract simply because it requires someone to pay a very high price for something. As noted earlier, the law allows for freedom of contract, and consumers are allowed to make bad deals as well as good ones. On rare occasions, though, a court may not enforce an extremely unfair contract (or the unfair clause in a contract).

A court is more likely to find a contract unconscionable when (1) the consumer is presented with a contract on a take–it– or–leave–it basis and (2) there is very uneven bargaining power

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Written and Oral Contracts

between the parties (as when an experienced seller is dealing with an uneducated consumer).

Find the equivalents of the following words and expressions in the text.

Устный контракт; обеспеченный правовой санкцией; за- кон поддерживает; заставить заключить контракт обманным путем; контракт, претензии по которому не могут быть заяв- лены в суде; незаконный контракт; несправедливый контракт; пункт контракта.

Answer the questions:

1.What are the main two types of contracts?

2.What kinds of contracts must be in writing to be enforceable?

3.Should courts enforce an oral agreement to buy a car? Give reasons.

4.Why does the law favors written contracts?

6.Why are some contracts are unenforceable in court? Give your examples.

7.What can the courts do if they find that a contract is unfair, harsh, and oppressive?

8.Will the courts refuse to enforce a contract because it requires someone to pay a very high price for something?

9.When is a court likely to find a contract unconscionable?

Problem–solving: The Broken Promise

Ruth orally agreed to sell her car to Mike for 32,000. A few days later, she got an offer of $2,300 from Paul. Thereafter, she refused to sell her car to Mike. Can Mike hold her to the agreement? Should he be able to?

The Unfair Contract

A furniture store made an unemployed woman on public assistance sign its standard form contract for credit every time she made a purchase at the store. The contract had a term that said the

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Practice in Consumer Law

store would own every item the woman purchased until all the items were fully paid for. The woman made several purchases at the store, signing this contract each time.

After several years of making all her payments, she purchased a stereo and missed two payments. The store believed it had the right under the contract to take back all the items the woman had ever purchased there.

A court of appeals found a portion of the contract to be unconscionable and did not enforce this unfair term in the agreement. The woman had to return the stereo but was able to keep all the items she had already paid for.

Match the words on the left with the correct definition on the right:

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Warranties

UNIT 17.

Warranties

Read and translate the texts.

A warranty is a promise or guarantee made by a seller concerning the quality or performance of goods offered for sale. A warranty is also a statement of what the seller will do to remedy the problem if the product doesn’t perform as promised. If the seller does not live up to the promises made in the warranty, the warranty is said to be breached.

Warranties give consumers very important rights. You should always be aware of the warranties that exist when you make a purchase.

Not all warranties are the same. It’s worthwhile to compare warranties when shopping.

When you look at a warranty, consider the duration (how long does it last?), the scope (what parts or problems are covered or excluded?), and the remedy (what do you get under the warranty and what must you do to get the remedy?).

Check your own state’s law. Sometimes it gives you rights that are not in the warranty.

There are two types of warranties: express and implied.

Express Warranties

An express warranty is a statement–written, oral, or by dem- onstration–concerning the quality or performance of goods offered for sale that becomes a part of the bargain between the parties. For example, if a salesperson tells you «This TV will not need any repairs for five years», this salesperson has created an express warranty. Similarly, an express warranty is created if you purchase a vacuum cleaner from an appliance store after seeing a demonstration of the vacuum picking up small particles from a deep shag rug. Since oral warranties and warranties by demonstration are difficult to prove, it is always best to get a written warranty.

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Express warranties are created by statements of fact. Not everything a seller says is a warranty. If the seller’s statement is merely an opinion or an obvious exaggeration, it is considered puffing, or sales talk, and cannot be relied on. For example, a used car dealer advertising «Fantastic Used Cars» is engaged in puffing. No warranty is created, and no customer should rely on such a statement.

What happens if your TV blows a tube or your watch won’t keep time? The first thing to do is check the warranty. One TV may be guaranteed for 90 days, while another may be covered for a full year. Your warranty may provide a remedy when things go wrong. You may be able to return the item for a refund, exchange it for another, or have it repaired.

Sellers do not have to give written warranties. However, if they do, the Magnuson–Moss Warranty Act requires that the written warranties (1) disclose all the essential terms and conditions in a single document, (2) be stated in simple and easy–to–read language, and (3) be made available to the consumer before a sale. Written warranties must also tell you exactly what is included and what is not included. For example, the warranty must explain what repairs are covered and who will make them. The warranty act does not apply to products that cost $15 or less.

Under the act, warranties are labeled either full or limited. Under a full warranty:

•A defective product will be fixed or replaced free, including removal and reinstallation, if necessary.

•The consumer will not have to do anything unreasonable (such as shipping a piano to a factory) to get the warranty service.

•The product will be fixed within a reasonable time after the consumer complains.

•If the product can’t be fixed after a reasonable number of attempts, the consumer can get a refund or a replacement.

•The warranty applies to anyone who owns the product during the warranty period (not just the first purchaser).

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Warranties

Any protection less than this is called a limited warranty. Such a warranty could cover some defects or problems and not others. For example, the limited warranty on a video recorder might cover the cost of new parts but not labor. Or it might cover some parts but not others. To learn what is covered, read all of the warranty carefully.

Find the equivalents of the following words and expressions in the text.

Гарантия; действовать согласно обязательствам; невыпол- нение гарантийных обязательств; знать о существующих га- рантийных обязательствах; продолжительность гарантийного периода; возмещение; прямая гарантия; связанная гарантия; очевидное преувеличение; торговец подержанными автомоби- лями; отремонтировать бесплатно; переустановить; получить назад деньги; заменить товар; ограниченная гарантия.

Answer the questions:

1.What is a warranty?

2.What happens if the seller does not live up to the promises made in the warranty? Have you ever come across such situations?

3.Why should you always be aware of the warranties that exist when you make a purchase?

4.What should you consider when you look at a warranty?

5.What two types of warranties are there?

6.What is an express warranty?

7.Why is it always best to get a written warranty?

8.Is everything a seller says a warranty?

9.What is the difference between a warranty and a sales talk?

10.What is the first thing to do when something goes wrong with an item you purchased?

11.What does the Magnuson–Moss Warranty Act require? Do we have any acts like this in Russia?

12.What is the difference between a full and limited warranty?

13.Give your own examples of different warrants you have read.

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Problem–solving:

Read and evaluate the one–year limited warranty and answer the following questions.

a.Who is making the warranty? Who will make any repairs

–dealer, service center, manufacturer, or independent repairer?

b.How long is the warranty in effect? Does the buyer have to do anything to make the warranty effective?

c.What is covered – the entire product or only certain parts? What is promised – repair, replacement, labor, postage? Are there any limitations or exclusions? Is this a full or a limited warranty? Why?

One–Year Limited Warranty

Electro Toasters fully guarantees this entire product to owner against defects in material or workmanship for one year from purchase date.

Defective product may be brought or mailed to purchase place, authorized service center, or Service Department, Electro Toasters, Inc., 3rd & Maple Streets, Arlington, PA 15616, freight prepaid, for free repair or replacement at our option.

Warranty does not include cost of inconvenience, damage due to product failure, transportation damages, misuse, abuse, accident, or commercial use.

For information, write Consumer Claims Manager at above Arlington address. Send owner’s name, address, name of store or service center involved, model, serial number, purchase date, and description of problem.

This warranty gives specific legal rights. You may have other rights that vary from state to state.

This warranty becomes effective upon purchase; Mailing the enclosed registration card is one way of proving purchase date but is not required for warranty coverage.

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