We encourage you to read this section first. In this section we have tried to provide a simple, general overview of contract and basic consumer law that will be the basis for all the other discussions and information relating to consumer protection.
Any discussion of consumer protection must begin with a word about contracts. In many respects, consumer law protects consumers from some of contract law's harsher results. At the same time, the law regarding contracts still underpins most of our actions in the purchase of goods and services. Therefore, a good working knowledge about contracts is important to understand the opportunities and hazards of the marketplace.
A contract is a legally enforceable agreement between two or more persons. The agreement may be to do, or not do, something. It may be oral or written, or may be formed completely by conduct. This last kind of contract is sometimes called an "implied contract."
Example: Mary Jones goes to Humongomart, walks in and picks up a pair of blue jeans from the shelf for her son John. There is a sign over the shelf that says "Special: Blue Jeans $12." Without a word, she goes to the cash register and hands the cashier $12. The cashier takes the money, puts the jeans in a bag and hands Ms. Jones a receipt. A contract for the purchase and sale of a pair of blue jeans has been made and executed between Humongomart and Mary Jones without saying or writing a word. The contract incorporates some written information – the price term, for instance, and probably Humongomart's posted return/refund policy – but the essential terms of the contract have been formed by the conduct of Ms. Jones and the cashier.
The law will enforce both oral and written contracts, but in most instances written contracts are preferable to oral contracts. The parties to an oral contract may disagree about the precise terms of the contract, and may have a hard time proving exactly what each one of them meant. The law has methods for selecting whom to believe when two people disagree, but the methods are imprecise at best. Parties to a written contract may still have plenty to disagree about, but they tend to have fewer disagreements about the terms of the contract. In some instances, the law requires contracts to be in writing, for example, contracts for the sale of land, leases for longer than a year, and contracts that will take more than a year to fully perform.
Consumers often have little or no power to change the words of written contracts or to strike out terms of the agreement that they do not like. The consumer's only choice may be to accept or reject the entire agreement. Contracts that are standardized and difficult to change are called "contracts of adhesion" and are generally written by lawyers for the bank, leasing company, car dealer, or whatever business with which the consumer is dealing. A consumer should always read a written contract before signing it and compare the terms with other contracts from other sources.
Under some special instances, no matter how much gets said or written down, a contract may not be formed or the law may not enforce an agreement. For example, some people do not have the age (such as minor children) or mental capacity that the law requires to make their contracts binding. A contract is unenforceable if the purpose is illegal or repugnant to social policy, such as contracts for gambling debts or murder for hire. Contracts brought about by fraud often cannot be enforced. In rare cases, contracts found to be legally "unfair" may not be enforced in whole or in part.
Typically, when one party to a contract fails to do what was promised, the contract is broken and the injured party may bring a legal action for damages. Generally speaking, the purpose of the damages is to put injured parties in the position that they would have been if the contract had not been broken. Contrary to what many people think, the law will not usually award money for emotional injuries connected to a breach of contract.
Example: Frank Benjamin hires Zongo the Clown to perform at his daughter's birthday party on one weekend, and at his son's birthday party the next weekend. Benjamin and Zongo sign a written contract in which Zongo agrees to perform on the two dates and Mr. Benjamin agrees to pay $100 in advance. Zongo performs at the first party, but accepts an invitation to perform on "Star Hunt" the next weekend, missing the son's party. Mr. Benjamin's damages are $50, even if his son is so distraught that he decides to grow up and be a bank robber instead of a brain surgeon.
Consumers must remember that a business is as entitled to have the consumer perform promises to it as the consumer is to have the business perform its promises. The law does not excuse consumers from their contracts simply because it becomes burdensome or inconvenient to live up to them. In the one special instance of bankruptcy, the law allows some contracts to be broken but exacts a heavy price from the bankrupt debtor (whether the debtor is an individual or business). Consumers must live up to the contracts they make unless they have obtained legal advice on exactly how the contract may be broken.
New Hampshire's principal consumer protection law is called "Regulation of Business Practices for Consumer Protection" but it is commonly known as the "Consumer Protection Act." The Consumer Protection Act is patterned after the Federal Trade Commission Act and, like its federal counterpart, the New Hampshire law prohibits "the use of any unfair or deceptive act or practice or any unfair method of competition in trade or commerce."
The terms "unfair or deceptive act or practice" and "unfair method of competition" have developed special legal meanings yet remain difficult to define. Often people have a different idea of what is "unfair or deceptive" than do courts or lawyers. For example, a retail store may have a policy of refusing to grant refunds, granting instead credits only to be used at the store. Many consumers think that such a policy is "unfair" or "deceptive." However, if the policy is fully and accurately disclosed to customers by the store then a court will very likely enforce it.
To say that the legal meaning of "unfair or deceptive acts or practices" is different from the general meaning of those words is not to say that the universe of possible "unfair" or "deceptive" business practices is limited under the law. On the contrary, the Consumer Protection Act does not limit either the number or type of "unfair" or "deceptive" practices. The law says that unfair methods of competition or unfair or deceptive acts or practices "shall include but [are] not limited to" the following list of practices:
Example: Honest Clem's Autos places a sign reading "New Bulgemobile Supreme" on the car purchased by Sally Consumer. The car was in fact used for 6 months by Rusty's Auto Rentals and sold to Honest Clem's. The car is not "new" but is actually "used."
Example: Mondo Merchandise advertises that it is selling "premium quality Air Jumpin' sneakers" (a nationally advertised brand and quality) for 50% off. The sneakers are actually factory seconds. The claim that the sneakers are "premium" is untrue and the advertisement is an unfair or deceptive claim.
Example: Michelangelo Jeans carry a tag claiming that they are "Made in Italy." They are actually made in Manchester. The tag unfairly or deceptively claims that the jeans are made in Italy.
Example: An auto-body shop advertises "We install genuine Bulgemobile parts!" In reality, it uses cheaper look-alike parts. The shop is "passing off" the look-alike parts as if they were genuine Bulgemobile parts.
Example: Miracull Back Appliances has a brochure for its Larry Byrd Back Spasm Eliminator in which it claims that a famous former basketball player with famous back problems "loves his Miracull Back Spasm Eliminator." The athlete has never used the product and does not own it and isn't a commercial sponsor of it. The claim of sponsorship or approval is unfair or deceptive.
Example: Hot Propane, Inc. sends a letter to the customers of Frozen North Propane stating that Frozen North has filed for bankruptcy and encouraging them to sign up for Hot Propane's services "before you get left out in the cold." Frozen North has not filed for bankruptcy. Hot Propane has disparaged Frozen North's services with a false statement.
Example: Honest Clem's Autos advertises "the popular Bulgemobile Empresses at 20% below the invoice price." When customers arrive at Honest Clem's the salespeople tell them that the Empresses are "all sold out" and the Empress got poor ratings from a popular consumer magazine, then try to sell them the Bulgemobile Athena (a more expensive auto). At the time the advertisement was run, Honest Clem's knew that it only had one Empress in stock (and that was under a purchase agreement with the general manager's nephew).
Happy Wandered Pavers tells a homeowner that it is "doing a job up the street" and therefore can pave her driveway for ½ price. In fact, the price quoted is above market price. Happy Wanderer bought a whole load of asphalt to "peddle" door-to-door and will have to go back to the asphalt plant to get more asphalt if it gets the homeowner's business. Happy Wandered has made unfair and deceptive statements regarding the existence of, amount of, and reason for the price reduction.
These are some of the ways that a business may be found to have engaged in unfair or deceptive practices, but this list is not exhaustive. From time to time you may hear that the courts of this, or another, state have found that a particular business practice violates New Hampshire's Consumer Protection Act, the Federal Trade Commission Act, or another state's consumer protection law.
The Consumer Protection Bureau of the New Hampshire Attorney General's Office has primary enforcement jurisdiction over consumer protection matters.
NH Consumer Protection Bureau
Department of Justice
33 Capitol Street
Concord, NH 03301-6397
The Federal Trade Commission is a federal agency which deals with consumer protection matters on a national level or when interstate commerce is involved.
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
1-877-FTC-HELP or 1-877-382-4357 (toll-free)
Portable Document Format (.pdf). Visit nh.gov for a list of free .pdf readers for a variety of operating systems.
New Hampshire Department of Justice
33 Capitol Street | Concord, NH | 03301