Consumer Law

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Consumer Law is aimed at preventing businesses/corporations from unfairly deceiving, cheating, or otherwise misleading consumers. The definitive consumer statute in Massachusetts General Law is Chapter 93A, the Consumer Protection Act[1]. This statute, combined with the Uniform Commercial Code (UCC)[2] and the Code of Massachusetts Regulations (CMR)[3], comprise the bulk of MGL consumer law. Most of consumer law does not cover private party sales. The following chapter will detail Chapter 93A, and will explain the portions of the Uniform Commercial Code and the Code of Massachusetts Regulations that are relevant to protecting consumers from unfair treatment by businesses.

Chapter 93A

Chapter 93A is designed to protect consumers from the unfair and deceptive practices employed by some businesses. It gives consumers (who feel they have been unfairly deceived by a business) the right to file a claim in court and thus receive compensation for the monetary loss they consequently suffered.

Double or Treble (triple) Damages may be awarded for cases falling under Chapter 93A. If a business knowingly violated the law or if, having been informed of such a violation, the business did not correct the problem, then the consumer is entitled to receive up to three times the amount of money they lost due to the business' actions. However, there is an important exception. If the business makes a reasonable offer to that is rejected by the prospective plaintiff, then the court may limit the plaintiff's recovery to the amount of the settlement offer. It is important, therefore, that the thirty-day demand letter be as specific as possible so as to inform the business of its violation of the law. The minimum amount a customer can get back is double damages, and triple damages plus attorneys' fees and court costs is the maximum, when a violation of this type is proven.

Some examples of practices that might fall under the aegis of Chapter 93A would be if:

  • A consumer is not fully informed of the nature of a product
  • The refund/return policy is not clearly stated on a sign or receipt (It is not enough for the return policy to be on the receipt. It must actually be made known before the purchase).
  • A business does not meet its warranty agreement
  • A business engaged in false advertising

The following guidelines must be met in order for a case to fall under Chapter 93A:

  • The matter must involve a business. Private party sales are not covered under 93A.
  • The good or service purchased must be for personal or household use.
  • One must have suffered actual monetary damages (e.g. lost/wasted money) unless one proves that this unfair practice may cause a loss of money or property.
  • The complaining party must write a 30-day demand letter.

Chapter 93A requires that a consumer who believes themself wronged write a 30-day demand letter, send it to the offending party and give them 30 days to respond. The time window is firm for Chapter 93A demand letters and must be 30 days.

Merchandise Credits & Gift Certificates

Gift certificates are defined as "a writing...purchased by a buyer for use by a person other than the buyer, not redeemable in cash and usable in its face amount in lieu of cash in exchange for goods or services supplied by the seller." Gift certificates include electronic cards with predefined dollar values, merchandise credits, and certificates where the issuer has received payment for the future purchase of goods or services. Pre-paid calling cards are not considered gift certificates. The recipient of a gift certificate has at least 7 years (from the date of purchase) to redeem it. If there is no expiration date marked on a gift certificate, then it does not expire under Massachusetts law.

The final selling price must be affixed to all products (UPC barcodes that can be electronically scanned are sufficient).

The Uniform Commercial Code (UCC)

Although Chapter 93A grants consumers the right to sue businesses for unfair or deceptive practices, there are many other situations in which customers feel as though they did not get what they paid for, despite the fact that the business did not knowingly deceive them. The Uniform Commercial Code applies in many of these situations.

The Implied Warranty of Merchantability

There is no "as is" sale in Massachusetts. Instead, all goods and services come with an implied warranty of merchantability. If both goods and services factor into a contract, the contract is covered by the UCC's Implied Warranty of Merchantability [4] solely in those cases where the contract deals primarily with goods and only incidentally with services, according to the predominant-purpose test. If a customer buys a product, it is implied that the goods purchased will perform the basic functions for which they are intended reasonably well for a reasonable amount of time. The implied warranty of merchantability does not apply to private party sales. If a product does not meet the requirements of the implied warranty of merchantability, the consumer can sue the seller in small claims court. However, if the buyer inspected obvious defects before purchase, or if the buyer refused to inspect the goods, they cannot claim non-fulfillment of the implied warranty of merchantability due to such defects.

The Implied Warranty of Fitness

If a seller informs a buyer that a product can serve a particular purpose to a particular extent, an Implied Warranty of Fitness is created, and a buyer can sue the seller if the product does not live up to this warranty. This is particularly true when the buyer is relying on the seller's skill or judgment to select suitable goods.

To distinguish the implied warranty of fitness for a particular purpose from the implied warranty of merchantability, take the following example:

A shoe fits, and one can walk in it. This fulfills the implied warranty of merchantability because the product serves its basic function. But if the shoe salesman says that the shoe is suitable for hiking, the product must adequately serve this function for it to fulfill the implied warranty of fitness for a particular purpose, because the business told the customer that it would.

Other warranties/Guarantees are also included in the UCC:

  • Express Guarantee - If the seller makes a verbal or written promise or affirms a fact about a product this constitutes an express guarantee. Descriptions, samples, demos, models, ads, and statements are all express guarantees.
  • Unconditional Guarantee - The seller indicates the buyer can have the product repaired, replaced, or refunded for any reason at all.
  • Illusory Guarantee - An illegal guarantee that attaches too many conditions to the repair or replacement of a good.
  • Warranty of Title and Against Infringement - A contract for a sale includes a warranty by the seller that the product title is genuine and the transfer rightful, unless expressed otherwise by the seller and agreed upon by the buyer.

Contracts are also covered under the UCC. A contract is an agreement between two parties. The parties can be private parties or businesses. There must be both an offer and an acceptance, and the contract must be potentially positive for both parties, to be considered legal. Contracts are illegal in the following cases:

  • Fraudulent Misrepresentation - Valuable information is omitted or fabricated.
  • Incapacity of the Consumer - at least one party to a contract is a minor, mentally incompetent, or intoxicated.
  • Incapacity of the Merchant - The merchant is not registered as a merchant in this state. In this case, they must be used as a private individual, not a business.
  • Unconscionable Contract Clauses - If one party to the contract takes unfair advantage of the other party's inability to protect their interests. The court may refuse to enforce the entire contract, or refuse only enforce the unconscionable clause of the contract.
  • Mutual Mistake - both parties misunderstood something important in the contract.

If a contract is illegal, one can:

  1. Rescind the contract, or say that the contract once existed, but is no longer legally binding. In this case, a consumer should return the goods and receive a full refund.
  2. Disaffirm the contract, or say that the contract never existed. This can be done in cases where there was an incapacity of the consumer. One should be sure to send a letter to disaffirm to the other party.
  3. Collect Damages, possibly double or treble, by taking the other party to Small Claims Court. This can be done if there was fraudulent misrepresentation, unconscionable contract clauses, and/or unfair or deceptive practices on the part of the merchant.

The Code of Massachusetts Regulations: Title 940

Title 940 [5] of the CMR is another place where consumer-relevant laws can be found. The provisions most relevant to consumers and their shopping rights are discussed below. Remember, if a business engages in an "unfair and/or deceptive" practice (which many of the below are), Chapter 93A grants consumers the right to sue and collect as much as three times the amount they lost. The regulation is contained in 940 CMR, and the right to sue and collect is contained in 93A.

Refund, Return & Cancellation Policies

A store may have any return policy it wishes as long as it is posted clearly and conspicuously where it can be seen before the purchase is made. Having the return policy only on the receipt would not satisfy this law because the customer is not given the receipt until after the purchase. A store cannot use its return policy to refuse the return of defective merchandise under the implied warranty of merchantability, so a return policy stating that all sales are "as is" (without including a clause excepting defective merchandise) is unacceptable.

Clear and Conspicuous Disclosure

Clear and Conspicuous Disclosure means that a merchant must disclose whether any products (or parts of a product) for sale are used and/or defective in some way. Other information that would affect a buyer's decision to purchase a product must also be disclosed.

"Reasonable" Supplies of all advertised products must be on hand, or else the business is an violation of 940 CMR. The only exception is if the advertisement claims that supplies are limited. If this claim is not made, and supplies are unreasonably low, the merchant must provide the customer with a rain check, enabling the customer to purchase the product at a later date.

Bait and Switch advertising involves luring customers with an especially good deal and then attempting to talk them into purchasing another product that is more advantageous for the merchant to sell. This type of advertising includes: refusal to sell advertised products, changing the terms advertised, claiming insufficient supplies, and demonstrating a different product than the one advertised. Such practices are illegal.

Layaway Plans

A layaway plan allows a customer to purchase merchandise through installment payments. A customer receives the merchandise after all payments have been made in full. Some restrictions on layaway plans include the following:

  • Full Disclosure - a merchant must fully disclose their layaway policy and must inform the customer in writing if payments are not refundable or are only partially refundable.
  • Setting Aside of Specific Merchandise - a merchant must be truthful when telling a customer that specific merchandise or exact duplicates are being set aside.
  • Time Period Disclosure - a merchant must inform the customer if goods will only be set aside for a certain amount of time.
  • No Price Increases - a merchant cannot increase the price of merchandise, either through a higher payment or through more payments; nor can the merchant substitute lower priced merchandise.
  • Receipts - a customer must be given a dated receipt for each payment made, and, upon request, the merchant must tell the customer the total amount of payments already made.

Other Consumer Laws/Rules

The Cooling Off Period

The Cooling-Off Period is the period of time after a purchase during which a sales contract may be rescinded or merchandise automatically returned if the customer so desires. One common misconception among consumers is that there are fixed times to simply return consumer transactions. THIS IS FALSE.

In fact, there are very few situations where the law allows a cooling-off period. Of course, if a contract contains a cancellation provision, then that would apply. But not all contracts have this provision. There are a few situations in which a cooling-off period does apply. They are:

  • Door to Door Sales - If you make a purchase at home or at a location that is not the seller's permanent place of business, both Massachusetts law and the Federal Trade Commission's Cooling-Off Rule give you three business days to change your mind. The purchase must be made at a place other than the merchant's usual place of business and must be for goods costing more than $25. To cancel a contract, you must notify the seller in writing at the address given in the contract no later than midnight of the third business day following signing of the contract. Within 10 business days after receipt of your cancellation notice, the seller must return your payment. Within 20 days, the seller must either pick up the items left with you, or reimburse you for mailing expenses.
  • Health Club Memberships - if, after signing a contract to join a health club, you realize that you do not really want to join the health club, you have 3 business days in which to unconditionally cancel the agreement. The 3 days begin when you receive a copy of the written contract or a written receipt for payment.
  • Credit Service Organizations - if a consumer signs a contract with an organization that deals with restoring, improving, or servicing their credit, the contract may be canceled up until midnight of the third business day after signing it.

In these cases, the Federal Trade Commission Cooling-Off Rule mandates that:

  • At the time of the purchase, the customer must be given notice that they have the right to cancel the sale.
  • The customer must be given two copies of the cancellation forms and a copy of the sales contract or receipt.
  • The contract or receipt must include the merchant's address, the date, and notification of the right to cancel the sale during the cooling-off period.

Unsolicited Merchandise (i.e. merchandise that an individual never officially requested) can be considered an unconditional gift. Recipients are under no obligation to pay.

FTC's Mail and Telephone Order Rule

The Federal Trade Commission's Mail or Telephone Order Rule covers all merchandise ordered by mail, phone, over the internet, or via the fax machine. It stipulates that if a merchant does not promise a specific delivery time, the merchandise ordered must be delivered within 30 days of the merchant's receipt of the order (or the date the merchandise is charged to your credit card.) If the company is unable to ship within the promised time, the company must give the buyer the choice of agreeing to the delay or canceling the order and receiving a prompt refund. However, if you are applying for credit to pay for your purchase and a company doesn't promise a shipping time, the company has 50 days to ship after receiving your order.

Resolving Consumer Disputes

If a violation occurs, and a consumer is dissatisfied with the goods/services they received, there are several ways in which the consumer can attempt to retrieve what they lost:

  • Rejection - the consumer looks over the goods and rejects them if they do not conform to the warranty or contract in any way. They must notify the seller reasonably soon, and should then receive a refund.
  • Cover - the consumer buys substitute goods and collects the difference between the contracted goods and the substitute goods from the seller.
  • Repair
  • Specific Performance - the consumer contracts for a specific good to be made and it does not come through. In this case, the consumer can sue for refund, fulfillment of the contract and/or appropriate damages.
  • Add Incidental Damages - incidental damages arise from expenses from receipt and care of faulty goods and/or from expenses incurred as a result of delay or breach of warranty. A consumer can add incidental damages to their claim.

Problems with Collecting Damages

In Consumer cases, there are some common problems associated with collecting damages.

Insolvency or Bankruptcy of the Seller

A buyer can sue a bankrupt seller, but unless the seller has already been paid for services, the buyer is low on the totem pole (very low-priority) of collectors from the seller. For this reason, filing a small claim is often futile.

Insolvency or Bankruptcy of the Buyer

A seller may refuse to sell goods to a bankrupt or insolvent buyer (except with cash payment). If a bankrupt consumer does not pay for goods received, a seller may reclaim the goods within 10 days of the receipt. (This is subject to the rights of the buyer in the usual course of exchange. It is best to give a consumer time to pay for a purchase.)


One may sue the state, but death is often a good enough excuse for the judge to end a debt.