• December 5, 2013
Image from Miss B's Science Blog

Image from Miss B’s Science Blog

Recently, I met someone socially whose distant relative was single-handedly responsible, the family lore goes, for federal truth in advertising laws some fifty years or so ago.  The distant relative made his money selling “50 large new towels” for $1.00 (+ $ 0.25 postage), with a print promotion that included a photo of the “towels.”  The image suggested something other than the small pile of fabric “wipes” that buyers received by mail if they pounced on this “unbelievable bargain.”

I imagine a crotchety consumer taking the “towel” seller to task and the seller answering, “Well, it might not be what you expected, but they’re towels.  They work to dry things off and so on…”  The Federal Trade Commission had to step in to protect consumers. Otherwise, who would bother to try to vindicate their rights for a loss of $1.25 (that is, about $14.50 adjusted for inflation)?

Actually, it is a significant challenge for an unhappy buyer to recover from a purchase that hovers somewhere between imperfect and useless even when the loss is in the 100,000’s of dollars.

Tony Downs Foods, in Mankato, Minnesota, bought a belt grill to cook poultry from Omar Associates in Ohio.  To hear Tony Downs tell it, the belt grill that Tony Downs bought, with a purchase price of $432,640.50, was so beset by problems that could not be fixed over two years that Tony Downs feels it is entitled to its money back, plus $228,000 in “additional direct and incidental damages.”

Many years ago, I had a similar challenge for an unhappy purchaser of a badly installed bridge crane.  The opposition was immovable and entrenched.  After two years of litigation, the defendant company, ultimately, did not have the money to pay the judgment (which was for about $200,000 and had cost $200,000 or so to obtain through and including a trial).

To mitigate risk in commercial interactions, where the cost of vindication (legal fees and so on) can seriously threaten any benefits of embarking on the fight for vindication, experience and reputation up-front, and perhaps paying a premium for it, might be the proverbial “ounce of prevention.”  (Insurance might be good too.)

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