Chapter 11 Book

Chapter 11 Book - Chapter 11 Advertising Advertising...

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Chapter 11 Advertising Advertising Producers can increase the demand for their products by informing consumers of the relevant virtues of the product. They can also use their huge informational advantage to distort consumers demand by portraying their products in a false light. Government regulations are intended to prevent sellers from creating chaos in consumer goods markets by generating false information The Role of Advertising in Markets Advertising is any communication that businesses offer customers in an effort to increase demand for their products. Critics argue that most ads are tasteless and wasteful assaults on consumers’ senses. Criticized on the ground that it created illusory differences between products that are actually very close substitutes for each other. Defenders of advertising argue that it offers real information about products and their characteristics (including their prices). The critics do not have faith in the intelligence of the average consumer, and the defenders do. False and deceptive advertising is socially wasteful. Private Remedies for False Advertising Can injure both consumers and competitors Consumer Remedies o Most of the remedies are based on contract and tort law o Common law provides remedies for breach of contract. Statutory remedies for breach of express warranty exist as part of the UCC. o Common law of contracts affords very little protection to consumer. o Because the seller is free to reject the consumer’s offer at the advertised terms, the common law of contracts provides a
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remedy to consumers injured by false or deceptive advertising under only very limited circumstances. o Section 2-313 of the UCC provides that any statement, sample, or model of a product may constitute an express warranty. Advertising claims may create express warranties and if the representations turn out to be false the consumer may sure for breach of warranty. o
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Chapter 11 Book - Chapter 11 Advertising Advertising...

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