Advertising

Almost every business uses one form of advertising or another. The laws that protect consumers from false or misleading advertising are the same whether this advertising happens online or not. I place this article in the electronic laws section of the website, because nowadays most advertising happens online. Even if a company conducts offline advertising, it is common to duplicate it electronically.

 

It was stated in the article Puffery, advertisement of a legally binding contract? that if an advertisement contains enough details to make a viewer believe he will get exactly what presented, it was considered by the courts to constitute an enforceable contract. For example, if a company claims, “each widget is $5”, a consumer is entitled to show up at the store and get it for $5. Otherwise, it is a potential legal action for a breach of contract. Moreover, if the advertiser states a fact rather than opinion in the ad and it’s proven that he knew it was false, a consumer may bring a tort claim of deceit against the business. Mere puffery or exaggeration is not enough, the ad must contain a clear statement of the fact about a product or service which turns out not to be true in order to prove the intent to deceive.

 

Further, under the consumer protection laws, the advertiser’s statement, including the demonstration of a sample or model, is considered an express warranty of quality. If the purchased product or service does not comply with the demonstrated version, a consumer may bring a claim for breach of warranty. The Lanham Act forbids the use of any false representation in connection with goods or services. It covers not only consumers, but also the competitors. A company cannot make false claims about the products/services of its competitor in order to demonstrate that the company’s product/service is superior.

 

Besides federal laws, every state has its own consumer protection laws against deceptive business practices. These laws permit consumers to bring lawsuits against businesses as well as the government agencies to impose significant fines on their own initiative even if they don’t have consumer complaints. The bottom line is expressions of opinions; obvious exaggerations and vague statements are not deemed to be deceptive because they are unlikely to deceive an ordinary person. If the ad contains statements that sound like facts rather than opinions or details regarding pricing and quality, those statements are better be true.

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