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Wednesday, July 23, 2008

CONSUMER RIGHTS and the NJ Consumer Fraud Statute

I. Broken Products and Canceling Contracts
A. Before Signing a Contract

1. Read the contract thoroughly 2. Make sure all promises are spelled out 3. If the sales person makes representations to you, hand write these representations on the contract and have the salesperson or manager sign these promises.

When a contract may be voided

1. When fraud or misrepresentation is involved; 2. If the contract is subject to a special three day cancellation under statute when the contract is signed outside the sellers place of business. 3. The terms of the contract permit cancellation; or 4. One of the parties is a minor or an incompetent

Oral contracts can be binding, but they're more difficult to enforce. Generally, there is no three day Cancellation period for consumer contracts. Therefore, be careful before you sign a contract.

New Jersey and virtually every jurisdiction in the United States has adopted the Uniform Commercial Code (UCC). The UCC is a voluminous set of laws with respect to a wide range of commercial transactions. These include sales of personal property, checks-commercial paper and security interests. When you buy product from a store, pay for it, and carry it home or take delivery of it, you have legally accepted the product. When you discover that the product is defective, you want to send it back to the people you bought it from. That is, to reject it. In legal terms, this is called revoking your acceptance. Under the UCC, New Jersey Law 12A:2-608 states that a buyer may revoke his acceptance when a non-conformity substantially impairs its value to him if the buyer accepted it (a) reasonably assuming that the non-conformity will be cured and it has not been cured (fixed) or (b) without discovering the non-conformity if his acceptance was reasonably induced by the difficulty to discover before acceptance or by the sellers assurances.

A buyer may even reject goods within a reasonable time after their delivery or tender. The buyer must reasonably notify the seller. The seller must be given the opportunity to repair/cure. You don't automatically get your money back. For example, if furniture or a refrigerator was delivered to your home, and you discovered substantial damage to the product, the law allows you to reject the goods and demand that someone pick them up. If you went into a store and purchased an item, took it home, opened the box and discovered the products was broken, you can revoke your acceptance.

Common sense will tell you whether your purchase is substantially impaired. Minor defects such a scratch are not considered substantial. What is substantial is a mixer that cannot mix, a television that can only get one channel.

Pursuant to Code Section 12A:2-608, you must revoke acceptance within a reasonable amount of time after discovering that the product you bought is substantially impaired. The longer you wait, the weaker your case will be. You do, however, have an obligation, if the product is substantially impaired, to allow the seller to attempt to repair it. However, if repairs do not work, the Code allows you to return the product and demand your money back. If the Seller refuses, go to small claims court for cases under $2,500.00. Special Civil Part handles cases up to $15,000.00

Under Section 12A:2-715, a buyer is entitled to collect incidental and consequential damages if the buyer is sold a substantially impaired product. Incidental damages are expenses reasonably incurred in inspection, receipt, transportation and care and cost of goods rightfully rejected...any other reasonable expense incident to delay or other breach. (12A:2-715) Consequential damages include any loss resulting for general or particular requirements, needs of which the seller at the time of the contracting had reason to know of, and injury to person or property approximately resulting from any breach of warranty. (12A:2-715) For example, if you purchase a refrigerator and the refrigerator broke down, incidental damages could be any costs incurred in hauling the refrigerator back to the place of purchase or into storage. Consequential damages would be the value of any food which spoiled in the refrigerator. You would only be able to obtain these incidental consequential damages if you actually went to court.

C. Refund Policy Disclosure Required

In 1982, the New Jersey Refund Policy Disclosure Act was adopted. (NJSA 56:8-214) This requires every retail establishment to conspicuously post its refund policy as to all merchandise on a sign in at least one of the following locations: (a) attach the item itself, (b) affixed to a cash register or point of sale, (c) situated to be clearly visible to the buyer from the cash register or, (d) posted at each door entrance used by the public. The store is not required to give refunds, but is required to post if a refund is not given, whether merchandise is "as is", or if there is a refund policy, whether the refund would be cash, credit or store credit.

II. Consumer Fraud Act

The New Jersey Consumer Fraud Act provides that any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression, or intentional omission of any material fact with intent that others rely upon such concealment, suppression, or admission, in connection with the sale or advertisement of any merchandise or real estate, or with a subsequent performance of such person, is declared to be an unlawful practice. N.J.S.A. 56:8-2. The Consumer Affairs office protects the rights of consumers. The Division of Consumer Affairs has adopted extensive regulations dealing with the following business practices:

1. deceptive mail order practices 2. motor vehicle advertisement practices 3. sale of meat at retail 5. delivery of household furniture and furnishings 6. deceptive practices concerning automotive sales 7. deceptive practices concerning automotive repair and advertising 8. tire distributors and dealers 9. merchandise advertising 10. servicing and repairing of home appliances 12. sale of animals 14. unit pricing of consumer commodities in retail establishments 15. disclosure of refund policy in retail establishments 16. home improvement practices 17. sale of advertising in journals relating or purporting to relate to police, fire fighting or charitable organizations 18. plain language review 20. resale of tickets of admission to places of entertainment 25. Sellers of health club services

Under the Consumer Fraud Act, it is not necessary to show actual deceit or fraudulent act; any unconscionable commercial practice is prohibited. Skeer v. EMK Motors, Inc., 187 N.J. Super. 465 (App. Div. 1982). The sale or advertisement of real estate is also subject to the consumer Fraud Act. Even products dispensed or supplied by licensed professional are covered. If you win, the court must award you treble damages.

Mandatory Product Warranties

Before you make a major purchase, it is important that you read and understand the warranty, which is the manufacturer's or seller's promise to stand behind a product. The Federal Magnuson-Moss Act of 1975 requires that warranties be available for you to read before you make a purchase. You should ask the dealers the following questions and demand that they show you where the written warranty spells out their answer in writing:

1. What parts and repair problems are covered by the warranty? 2. Are any expenses excluded from coverage? 3. How long does the warranty last? 4. What will you have to do to get repairs? 5. What will the company do if the product fails? 6. Does a warranty cover "consequential damages"? 7. Are there any conditions or limitations on the warranty?

1. Express Warranty - New Jersey Statute 12A:2-313 provides that an express warranty can be created (a) By any affirmation of fact or promise to the buyer which relates to the goods and becomes part of the basis of the bargain, (b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to a description, (c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the good shall conform to the sample or model. It is not necessary that the seller use foreign words such as "warrant" or "guaranty".

Implied Warranties

New Jersey Statute 12A:2-314 indicates that unless the seller in bold type disclaims an implied warranty, each product will have what is know as a "warranty of merchantability". This means that the seller promises the product will do what it is supposed to do. For example, a car will run, a toaster will toast. Make sure you provide detailed and specific information regarding what you need to the store. For example, provide the size of rooms to be cooled when purchasing an air conditioner.

Another type of warranty is the "warranty of fitness for a particular purpose", set forth in N.J.S.A. 12A:2-315. This applies when you buy a product on the seller's advice that it is suitable for a particular purpose. For example, a seller who suggests that you buy a certain sleeping bag for zero degree weather warrants that the sleeping bag will be suitable for zero degrees. Under the UCC, a breach of contract or breach of warranty must be commenced within 4 years of the date delivery is made, except where a warranty explicitly extends the future performance of the goods or the period is reduced.


The protector of the citizen is the Department of Consumer Affairs. For additional information on consumer rights, call the New Jersey Division of Consumer Affairs at 973-504-6534 or your County Consumer Affairs Office. The Kenneth Vercammen Law Office does not handle consumer fraud or contractor cases. This article is solely for informational purposes. To hire and pay an attorney to file suit, call the Lawyer Referral service 800- 367-0089. Trial attorneys often charge over $250 per hour. Kenneth Vercammen, Esq handles Personal Injury and Criminal cases, not contract/ consumer fraud suits.

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