You are a recently graduated MBA student and you see an advertisement in a newsp
ID: 375481 • Letter: Y
Question
You are a recently graduated MBA student and you see an advertisement in a newspaper for a new set of living room furniture (couch, loveseat, coffee table, 2 end tables and 2 lamps) for $1,000 from Jackie’s Furniture, a national retailer of furniture. Being busy with your new job, you send a fax to Jackie’s stating, “I saw the ad in the paper for the living room set. I will buy that set as advertised, delivery included in the price and to take place within two weeks." A sales representative writes back and states, “On behalf of Jackie’s Furniture, we are pleased that you are interested in the living room set mentioned. We will sell it to you at the stated price. Delivery charges will be $100 and the set is on back order so delivery will occur within 30 days." When Jackie’s fails to deliver within two weeks, you contact the company to explain why the company is in breach of contract. State your argument. You are a recently graduated MBA student and you see an advertisement in a newspaper for a new set of living room furniture (couch, loveseat, coffee table, 2 end tables and 2 lamps) for $1,000 from Jackie’s Furniture, a national retailer of furniture. Being busy with your new job, you send a fax to Jackie’s stating, “I saw the ad in the paper for the living room set. I will buy that set as advertised, delivery included in the price and to take place within two weeks." A sales representative writes back and states, “On behalf of Jackie’s Furniture, we are pleased that you are interested in the living room set mentioned. We will sell it to you at the stated price. Delivery charges will be $100 and the set is on back order so delivery will occur within 30 days." When Jackie’s fails to deliver within two weeks, you contact the company to explain why the company is in breach of contract. State your argument.Explanation / Answer
From the point of view of contract law, advertisements are generally considered short of an offer. They are considered by the court, mere invitation to begin negotiation. However, that does not signify that false advertisements are just. The content and truthfulness of an advertisement are regulated by the Federal Trade Commission Act which states that a) advertising must be truthful and non-deceptive, b) advertisers must have evidence to back up their claims, and c) advertisements cannot be unfair. As per the given case, failing to deliver within 14 days as mentioned in the ad makes the ad subject to deceptive advertisements because according to the Federal Trade Commission Act and the Federal Trade Commission (FTC), any ad is deceptive if it misleads consumers acting reasonably under the circumstances (here, it misleads because the 14 days delivery schedule attracts the customers to show interest) and the delivery schedule, in itself, is "material" i.e. customers' willingness to buy will directly depend on it.
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