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By Martha Awiszus, Esquire
Business owners and consumers are reeling over the negative impact of the economy on their livelihoods. Businesses strive to remain competitive by undertaking business practices designed to lower costs and increase profits. Consumers hold back from making large ticket purchases due to insecurities about what the future may hold.
While our government officials work hard to improve market conditions, local business owners and consumers should use this time to reassess the way they conduct their business affairs.
Written Contracts Are Essential
Frequently, disputes arise between a business owner and a customer over the specific items or services purchased. A written contract between the parties is an essential element of any transaction. All contracts involving real estate must be in writing to be enforceable. The absence of a written contract guarantees a lengthy and costly dispute resolution process.
Contracts Must Be Clear
Written contracts must clearly identify the parties to the contract; the date; the items purchased or services provided; the delivery or completion date; and the cost and payment terms. A well written contract should leave no doubts as to the terms and conditions of performance.
Review Contracts Before Signing
Too often, people sign a contract without first taking the time to read it—this is a mistake. Read the contract to make sure it contains all the terms of the purchase. If any terms are not included, then you should hand write them on the contract and have each party initial the changes.
Use This Time Wisely
As a business owner, you should review your contracts to make sure they comply with all Massachusetts laws that apply to your business. The Massachusetts Attorney General's Office has Regulations prohibiting unfair or deceptive acts or practices applicable to businesses. These Regulations may, for example, require that your particular business have a written contract for each consumer transaction or that your contracts contain specific language contained in the Regulations. You should consult with counsel to make sure your business practices and contracts conform with the current legal requirements.
Consumer Confidence
Consumers can approach large purchase decisions with greater confidence by making sure they have a written contract that fully and clearly describes the transaction. Consumers should likewise consult with counsel before making a significant purchase decision to ensure that a written contract is made that will allow you will get the benefit of your bargain.
Unfair and Deceptive
Unfortunately, there are some unethical businesses that will promise you a particular product or service but will fail to deliver what was promised. This is known as a "bait and switch" scheme. Consumers have a powerful remedy under the State's Consumer Protection Act, called Chapter 93A. This statute provides consumer protection against unfair or deceptive acts or trade practices by allowing a Court to award a party, after trial, up to triple damages, attorneys fees and costs to compensate for this injury and to act as a deterrent against this type of conduct. A business' violation of an Attorney General's Regulation mentioned above is also a violation of Chapter 93A.
The consumer is required to provide a specific form of "demand letter" to the business, at least 30 days before filing suit, describing the unfair or deceptive business practices and injury and suggesting a resolution of the dispute. As a business owner, you must promptly investigate the claims and make a written response within the 30 day period; the failure to do so is itself a violation of Chapter 93A. Consumers and business owners should consult with their counsel to understand your rights and remedies under Chapter 93A. This statute is intended to level the playing field between businesses and consumers and is a powerful component in any dispute resolution process.
Moving Forward
Experienced legal counsel can assist you, the business owner, by reviewing your contracts and business practices to make sure they comply with applicable law. Counsel can also assist consumers so they do not fall victim to illegal business practices. Business owners and consumers will have renewed confidence in their business affairs by using clearly drafted written contracts to memorialize their transactions.
Martha Awiszus, Esquire
This article is provided for informational purposes only and does not constitute legal advice. You should consult with an attorney to address your situation.
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