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Exercise 8

Regulation of Trade Practices

Lila bought a power drill for $100 at Tyson’s Tools. She was told by a store employee that it was a new Shinee drill and it came in a Shinee box. However, when she began to use the drill, she noticed that not only did the drill have marks indicating that it had been used before, but when she peeled off the Shinee label, there was a stamp marking the drill as being “Hardee,” a manufacturer considered to be of lesser quality than Shinee. Lila tried to exchange the drill for a new Shinee drill, but Tyson’s Tools told Lila the drill was working fine and had all the features she had asked for, so they would not exchange it. Lila filed a lawsuit against Tyson’s, alleging it had engaged in unfair trade practices. Lila is able to show in court that Tyson’s had placed a Shinee label on its Hardee floor model, which it then put in the Shinee box.

How should the judge rule?

A. For Tyson’s Tools, because Lila did receive a functioning drill with the features she needed.
ANSWER "A" IS NOT CORRECT. Please try again.
B. For Lila, because the drill was misrepresented to her.
ANSWER "B" IS CORRECT. The drill was not a Shinee drill and Tyson’s Tools clearly engaged in practices that misrepresented the condition and model of the drill it sold to Lila. Therefore, Tyson’s can be found to have violated the Unfair Practices Act. Lila’s actual damages are the $100 she paid for the drill. Since there is substantial evidence that Tyson’s Tools willfully engaged in unfair trade practices, Lila could therefore be awarded up to three times her actual damages, plus attorney’s fees and costs.