Legal Aspects of Sales Responsibility

Legal Aspects of Sales Responsibility

Misrepresentation is one of the large legal umbrellas under which many of the activities of companies and/or individuals selling products or services fall. Misrepresentation is a more broad description of the narrowly defined deceipt. Deceipt, generally, refers to "an intent to mislead", whereas misrepresentation can also be based on negligence or policies requiring strict responsibility for statements. However, most court cases have been limited to instances where the defendant intended to mislead a plaintiff. (p 1009, Prosser, Wade and Schwartz's Torts, 10th edition, Foundation Press, NY, NY, 2000)

Historically, when one was buying goods, it was understood that the seller would flat-out lie regarding their product. "Buyer beware" or "caveat emptor" was the standard practice. The responsibility fell on the purchaser of goods to research the actual quality of the product. That might have been possible in the early 17th century, but could you imagine this working today when buying high tech equipment, or complex information services? (p 1010, Prosser)While we are far from caveat emptor, which existed hundreds of years ago, it is still taken for granted in our society that a salesperson or company representative is prone to exaggerate some of the benefits related to a product or service. This is known by the legal term puffing. Puffing, according to Black's law dictionary, is "the expression of exaggerated opinion - as opposed to a factual misrepresentation - with the intent to sell a good or service. Puffing involves expressing opinions, not asserting something as fact. Although there is some leeway in puffing goods, a seller may not misrepresent them or say that they have attributes that they do not possess." (p 1269, Blacks Law Dictionary, 8th ed, Bryan A. Garner, 2004, St Paul, MN) Thus, generally speaking, as long as the salesperson's puffing remains an opinion or personal belief, they will likely not be liable for any wrongdoing.

When the line of puffing has been crossed, misrepresentation falls into several categories. Fraudulent misrepresentations are made recklessly to induce a buyer into a purchase. The seller may know that the statements are false and/or the seller might not care. When the seller makes a statement that he or she didn't really know is false, it is considered