Business Law 101 / RULES VARY WHERE LABELING, DISCLOSURE PRICING CONCERNED

By Albert L. Kelley

Just as there are laws regarding false advertising, there are rules as to labeling of products. These rules usually aren’t that strong. The exception is food labeling as far as nutritional information. But there are a lot of problems with labeling. Is extra-large truly larger than large? Who determines if there is a new improved flavor? Does low fat have to be lower than regular fat? There are few guidelines for these areas and therefore it may be difficult to bring an action for deceptive advertising.

There are certain groups that approve items for consumers. Good Housekeeping is probably the most well-known. We’ve all heard about the “Good Housekeeping Seal of Approval.” This is not a government agency and their recommendations are not a guarantee in the quality of goods. Any organization may issue seals of approval; it’s up to the purchaser to have confidence in the approving organization. Advertising that you have a seal of approval is a guarantee that the goods have been so approved. If a company states they have received a seal of approval that has not actually been granted, it is considered false advertising.

Occasionally, the law will require certain things to be made part of a contract. For instance, there are laws that prevent the use of fine print in certain situations. Some clauses are required by law to be in larger print to ensure that the buyer sees them. If contracts are written on two sides of a sheet of paper, the federal law requires a notice to be placed on each side letting the consumer know that there is a second side. In financing a transaction, merchants must give you full disclosure of terms of the transaction. The Fair Credit and Charge Card Disclosure Rates requires disclosure of all the details that will affect the sale. What is the full price, what is the down payment, how many payments will be made, what will be the total paid in interest payments, and the percentage rate? Also, for most credit purchases, the merchant must comply with the Truth in Lending Act. This act applies whenever the payment schedule requires more than four payments.

Usually a sale is final when the transaction is made. However, when dealing with home solicited sales, there is generally a “three day rule of recession” that would allow you to void a sale within three days. A home solicitation means that the salesman actually comes to the house to make the sale – not just negotiate terms. This three day rule generally does not apply to any other types of sales.

Finally, the law doesn’t allow price gouging if the demand exceeds the supply. This seems unusual. When we talk about free enterprise, we normally think that the price of the item should be whatever the market will bear. However, that can be unfair at times. If demand for necessary items increases due to a civil emergency, stores cannot use this demand to seek exploitative profits. This is criminal in Florida, and has been found illegal in 33 other states.

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University. He is also the author of “Basics of Business Law” and “Basics of Florida’s Small Claims Court” (Absolutely Amazing e-Books). This article is being offered as a public service and is not intended to provide specific legal advice. If you have any questions about legal issues, you should confer with a licensed Florida attorney.

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