A consumer contract is a contract made between a merchant seller and a consumer. According to the Uniform Commercial Code which governs contracts, a “merchant” is any person who deals in goods of the kind of their occupation, or has knowledge or skill related to the goods involved in the transaction. A “consumer” is any person who purchases goods or services for personal use rather than for other uses such as production or manufacturing.
In most consumer contracts, the merchant supplies the consumer with goods, which are used personally by the purchaser. The consumer is seen as the last party to whom the goods are passed in ownership. Merchant-consumer contracts typically involve finished products, though they may often involve the sale of raw materials and services.
It is generally assumed that merchants have more knowledge of economics and commerce than the average citizen, and may be more “business savvy” than consumers. Thus, consumer protection laws exist in order to protect consumers. Many of these consumer protections apply to consumer contracts, in order to protect the consumer from unfair or one-sided contracts.
Some unique features and protections of consumer contracts involve:
Consumer contracts are more strictly regulated than normal contracts between two merchants, who are usually more familiar with contracts than consumers. The purpose of consumer contracts is to prevent abuses and make the contracts more understandable for the reader.
If a merchant violates consumer protection laws in the contract, it could lead to several types of legal consequences. Depending on the type of violation or breach, the contract could be declared “void”, which means that it is immediately invalid without any further analysis required. Other types of violations could render a contract “voidable”, which means it may be invalidated after the court performs a thorough analysis of the contract and the circumstances leading to contract formation.
Void or voidable contracts may result in the contract being cancelled and rewritten in whole or in part. Additionally, the merchant may be required to reimburse the consumer for any losses or injuries stemming from the contract violation. Consumers can also be held liable for providing merchants with fraudulent information in the contract. Criminal consequences may also result if either party acted with criminal or illegal intent.
One problem with consumer contracts is that the consumer party may not even be aware that their rights have been violated, since contracts can often be complex. By the time they discover a violation, it may be too late to file a legal claim. Thus, it is recommended that you contact a lawyer prior to signing any consumer contract, so that they can review the contract for you. An experienced business attorney will be familiar with the various consumer contract protections in your jurisdiction, and can advise you on the contents of the contract.
Last Modified: 03-27-2018 01:08 AM PDTLaw Library Disclaimer
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