False Advertising Regulations

Question 1

A major issue presented in this case is about false advertising, which Paulden’s Department Store presented in the Daily Mail newspaper. The advert indicated that there would be guaranteed £400 reductions on the sale of 4k Ultra high definition televisions to the first ten customers through the door at 9 am on 1st January. Notably, this claim appeared to be false, owing to the fact that Aiden, having been the first in the queue on the said date became furious after Paulden’s sales manager told them at 8am of 1st January that the sale was cancelled, owing to falling profits.

Notably, the claim, which Paulden’s Department made, constitutes as false and misleading statements as underlined by the regulations, as well as legal stipulations within the UK. Putting a consideration to the Trade Descriptions Act of 1968, having been replaced by an updated version, which is the Consumer Protection, based on the Unfair Trading Regulations, 2008, it is noteworthy that false/misleading advertisements are highly prohibited, and as such, companies that engage in this kind of activity ought to be penalized by use of different avenues. Additionally, other than the Trade Directives Act of 1968, there is also another law governing misleading/false advertising issues, which is the EC directive that prohibits the occurrence of such acts, under the Directive 84/450/EC.

The Unfair Commercial Practices Directive, as presented in the EU law is also another legislation that regulates unfair commercial practices that may aim at harming a consumer’s economic interests. Notably article 5 to 9 provides significant information regarding misleading, as well as aggressive advertising. For instance, Article 5 provides significant information regarding what attributes to fairness whilst article 6 specifies on what actions constitute as misleading. Moreover, article 7 explains various misleading omissions, whereas article 8 and 9 purposes to review aggressive commercial practices. Essentially, with this understanding, it is evident that this directive is straightforward towards informing an individual that false advertising constitutes the components below:

Factually, it contains false information and as such, it is untruthful, is likely to mislead/deceive a consumer, even in an instance where the presented information is correct, thus can make the consumer to take transactional decisions, which could otherwise be avoided. Of importance to note is the fact that putting into consideration, the legislative requirements presented in the Unfair Commercial Practices Directive, in togetherness with the Unfair Trading Regulations, 2008, as well with the Trade Descriptions Act 1968, the following would definitely occur. Firstly, it is certain that a normal buyer would consider a statement reading ‘guaranteed £400 reductions on the sale of 4K Ultra High Definition televisions to the first ten customers through the door at 9am on 1st January.’ This is the same way Aiden gave this advert a consideration. Aiden being an average consumer, it is noteworthy that he made transactional decisions, which he would not have made otherwise.

As such, it is not necessary for Aiden to provide proof that Paulden’s Department stores had attempted to mislead consumers. This is owing to the fact that the burden of proof would simply be proving that the statement that Paulden made was false and thus misleading because as stipulated in the Trade Descriptions Act of 1968, the offence is regarded as a strict liability. Notably, such kind of misleading/false information in the retail industry is common. As a matter of fact, a research that the office of fair trading conducted in the UK proved that approximately 40 per cent of retail organizations in the UK have misleading/false claims, especially when they make their advertisements. For instance, a gas cooker can be advertised for £150, when the cheapest price is £180. In this regard, consumers are obligated to act diligently, and thus, purpose to research on various claims that organizations make, prior to agreeing to purchase their products.

Overall, it should be noted that the general clauses related to aggressive advertising seem to be satisfied in this case. In accordance with the legal information as presented in the Directive, it is evident that there exist only two significant criteria, used in identifying an act of unfair commercial trading that is not regarded as misleading/aggressive, and thus, should be prohibited. The first is professional intelligence, which poses as a special skill/care that a seller may be expected to reasonably exercise, with honest market practices/general principle relating to the good faith of the trader. This is an idea pertaining to good business practices. The second criterion is when a trader practices a trading, which materially distorts/ can be likely to distort the economic behavior of a consumers. The latter criterion implies that the practice purposes to impair the ability of the consumer in making informed decision and thus, can make the said consumer to engage in a form of transaction, which he would otherwise avoid. As such, it is worth noting that it in this case, Aiden, if he knew that Paulden would change their mind, he would not have camped outside the store for 36 hours to secure his place, as first in the queue. It is evident that he would not have made an informed decision. This then makes it clear that there is the issue of false advertising, and prohibited behavior. As such, Aiden could sue Paulden, in order to recover from the damages he incurred from the entire experience, and this would as well prevent the organization from making other consumers to be victims of false/misleading advertisements.

Question 2

Having an agreement between two individuals does not signify the existence of a contract. Notably, the establishment of a legal relation poses as a doctrine of contract law and it is defined as an intention of entering into a legally binding contract/agreement. An agreement that is linked to the meeting of minds, with the understanding, as well as acceptance of mutual legal rights, and also duties, based on particular actions/accountabilities can be legally enforced, but only in an instance where the court deems that the contracting parties had an intention.

Notably, the acknowledgement of the existence of domestic and or social agreements, whereby the involved parties are not legally bound has been culminated in the assumption that no contract is recognized. As presented in the case, it is worth noting that Ravinder and her father Mohammed had a domestic agreement, thus implying that they were not legally bound to the contract. This is however contrary to commercial transactions whereby they are treated with the presumption that the legal relations had been intended. However, it is clear that even in an instance where domestic/family relations do not presume the intention of the parties to be legally bound, it is notably that there are significant exceptions to which this kind of presumption can be rebuttable. For instance, in the case involving Balfour v Balfour, the husband worked overseas and thus, made an agreement with the wife to be sending her maintenance payments. Notably, at the time the agreement was being made, the couple was happily married. However, later, the relationship became sour and as such, the husband stopped sending the payments. The court held that the set agreement was initially a domestic agreement and as such, it was presumed that the involved parties did not intend to be bound legally. However, the court also held that the intention of creating legal intention is vital for family, as well as domestic relations. In this regard, the involved parties must purpose to intend that the agreement should be legally binding, for there to be an enforceable contract. Relating this case to the case of Ravinder and Mohammed, it is clear that there was no intended legal consequences, which were to follow the agreement, and as such, the contract cannot be enforceable.

In addition to the aforementioned, it is clear that the intention of creating a legal relation is essential only when there is need of establishing a valid contract as it ensures that the involved parties have the will to be bound to the agreement terms. In an instance where two parties have the determination to enter into a contract, then it is assumed that their mentality will significantly discern the contract’s subject matter. Notably, this happens owing to the ‘intention’ that the involved parties have, which permits them to agree. However, in an instance where there is no such agreement by the parties, then the contract is regarded as an invalid agreement. Similar to the case between Ravinder and Mohammed, it is clear that there was an invalid agreement and as such, Mohammed is not legally obliged to pay for his daughter’s allowance. The contract cannot be enforceable, legal and also binding in an instance where the intention of creating legal relations is regarded as non-existent as in the case at hand.

Another vital reason as to why the creation of legal relations is significant is for the involved parties to be able to sue each other in an instance where a dispute arises. However, with no intention of creating legal relations, the contracting parties may be forced not to be legally bound and such a circumstance may cause the parties to have no otherwise but to resolve their disputes domestically without involving the court. However, when the contract can be enforceable, then the contracting parties can press charges against each other, in an attempt to seek for justice. In this case, it is significant to take note of the fact that however much Ravinder still wanted to continue with her course and hold her father to the agreement, she is left with no option but to resolve the matter with her father domestically without involving the court.

Noteworthy, with no intention of creating legal relations, the contract formed is regarded as a mere promise. In this regard, a promise can be defined as a verbal or written declaration that a person makes to another for either a good or a valuable consideration in the form of a covenant, in which case, the promiser purposes to bind himself or herself to doing some act. The promisor then gives the promisee a right of demanding and enforcing a fulfillment. Notably, promises do arise in instances where there is no intention of creating legal relations and this was the case when Mohammed made a promise to his daughter to monthly allowances of around £1200. This then implies that the contract was invalid and was based on a mere promise, which had to legal relations. Promises can be broken and as such, Mohammed is not legally bound to pay her daughter’s monthly allowance.

Overall, it is worth noting that an agreement made within a family by a father and a daughter cannot be sued upon. Factually, as a matter concerning public policy, the court cannot resolve the disagreement between Ravinder and Mohammed. Of significant to note is the fact that there was no legal relations and contract was based on a mere promise. In this regard, it can be deduced that Mohammed is not legally obliged to pay an allowance to his daughter, Ravinder.

Question 3

The major issue presented in this case is about fraudulent misrepresentation as Retreat Holidays Ltd made false statements in their brochure that said that “all rooms have en suite bathrooms, a luxury vegetarian restaurant will be available from 1 April, horse riding is available locally.” When Rose-Marie took the fortnight holiday, she discovered that everything word quoted in the brochure was not true and to make matters worse, she had a confirmation that the Retreat holidays representative had been told on 1 February that the vegetarian restaurant would not be ready until September.

Fraudulent misrepresentation is defined as a type of false statement, used in tricking a person into giving in to an agreement. It can occur through various ways, including spoken words, body motions, or even written words. Notably, fraudulent misrepresentation is often raised when it is connected to contract law. In this regard, whenever parties have a legal agreement/contract with one another, they must come to agreement, based on the contract terms. Unfortunately, when there is fraudulent misrepresentation, the contract can be affected in various ways and this includes making it invalid. This is a case, where Retreat Holidays Ltd made a false statement in its brochure, with the primary purpose of getting travelers to get into the deal. This poses as a fraudulent misrepresentation. It should be noted that almost all legal issues and this includes issues of fraudulent misrepresentation often depends of various facts, as well as circumstances that surround the case.

On the verge of finding an individual liable for any form of fraudulent misrepresentation, courts have the obligation of proving various significant elements. Firstly, if a representation had been made (Retreat Holidays Ltd indeed made a representation to its customers in general). Secondly, that the specific representation was false (Rose-Marie later came to discover that the representation was false and none was adding up to her expectation). Thirdly, the defendant must have the knowledge that there was false representation (Rose-Marie had knowledge that Retreat Holidays made a false representation). Fourthly, that the statement was purposely made with the intention of making the party to rely on it, and thus enter into an agreement (a perfect example is when Rose-Marie discovered that the Retreat holidays representative had been told on 1 February that the vegetarian restaurant would not be ready until September.) The fifth is that the plaintiff relied on the misrepresentation and would otherwise, not enter into the agreement without it (Having been disappointed about the finding, it is evident that Rose-Marie could not have engaged in the agreement.) The sixth is that the plaintiff must have suffered measurable harm, due to the provided fraudulent information (having booked the holiday, relying on the description in Retreat Holidays’ brochure, it is evident that she failed to meet her expectation and thus, suffered a monetary lose.

Overall, based on this case, it is clear that considering the provisions of Misrepresentation Act, section 2(1), when a statement is made fraudulently, it is actionable as it is regarded as a fraudulent misrepresentation as in the case of Rose-Marie and Retreat Holidays Ltd. In this regard, the only defense that Rose-Marie has it to provide proof that under reasonable grounds that the statement made by Retreat Holidays was false. As such, she will have rights, as well as remedies on the basis of misrepresentation.

Bibliography

cases

• Balfour v Balfour

Statutes

• Misrepresentation Act, section 2(1)
• Trade Descriptions Act of 1968
• Trade Directives Act of 1968, 84/450/EC
• Unfair Commercial Practices Directive
• Unfair Trading Regulations, 2008

Books and journals

• Beale, H., Fauvarque-Cosson, B., Rutgers, J., & Vogenauer, S. (2019). Cases, materials and text on contract law. Bloomsbury Publishing.
• Cartwright, J. (2016). Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing.
• Haigh, R. (2018). Legal English. Routledge.
• Hawkins, D. (2019). Consumer Fraud Negligent Misrepresentation. Wisconsin Law Journal.
• Klement, A., Neeman, Z., & Procaccia, Y. (2018). Consumer Fraud, Misrepresentation and Reliance. International Review of Law and Economics, 54, 95-105.
• Knapp, C. L., Crystal, N. M., & Prince, H. G. (2019). Problems in Contract Law: cases and materials. Aspen Publishers.
• Poole, J. (2016). Textbook on contract law. Oxford University Press.
• Smits, J. M. (Ed.). (2017). Contract law: a comparative introduction. Edward Elgar Publishing.