Jennifer S. Martin  
     
    Visiting Associate Professor of Law Blog  
       
  Jennifer Martin joins University of Louisville Law after spending a year as a Visiting Associate Professor of Law at University of Pittsburgh School of Law.  She has previously taught at Western New England College School of Law.  Professor Martin is a co-author for the American Bar Association's Annual Survey on Sales Law and has published many articles and given lectures on subjects such as wartime contracting, executive compensation, comparative sales law and piercing the corporate veil. 

Upon graduation from Vanderbilt Law School, Professor Martin became an Associate with the international practice group of Baker & Botts, L.L.P., practicing in both the Houston and Dallas offices. A member of the Texas and American Bar Associations, Professor Martin was a Principal Attorney for Houston Industries Incorporated (now Reliant Energy), working on power generation transactions domestically and internationally. 

Professor Martin is a co-founder and contributor to the Commercial Law weblog at http://ucclaw.blogspot.com/.  The blog takes up all issues related to commercial law, particularly the Uniform Commercial Code.  The blog is a member of the Jurisdynamics Network.

   
 

 

     
Courses Taught
Professor Martin regularly teaches courses in contracts, commercial law and corporate law.
         
Publications
  LEGAL WRITINGS:      
         
  ELECTRONIC PUBLICATIONS:      
  • Computer-Assisted Legal Instruction (CALI) lessons in contract and commercial law
  • Agreements Lacking Consideration: Gift Promises (2007)
  • Acceptance (2004)
  • Battle of the Forms (UCC 2-207) (2005)
  • Bilateral and Unilateral Contracts (2004)
  • Consideration: The Basics of Consideration and the Bargain Theory (2004)
  • Duration of Offers (2003)
  • Express and Implied Contracts (2003)
  • Formation of Contracts Under UCC Article 2 (2005)
  • Indefiniteness (2004)
  • Invitations to Negotiate and other Expressions that are not Offers (2003)
  • Letters of Intent and Other Formal Preliminary Agreements (2004)
  • Mailbox Rule (2004)
  • Mutual Assent (2003)
  • Offer (2003)
  • Option Contracts and Firm Offers (2004)
  • Written Agreement Contemplated v. Written Memorialization (2004)
  • Warranties (2002)
  • Implied Terms (2002)
  • Interpretation (2002)
  • Good Faith (2002)
   
         
Presentations
  • Speaker, Cleveland-Marshall College of Law Faculty Luncheon Series, “Impracticability Under UCC 2-615 for Wartime Contracts” (September 2008)
  • Speaker, University of Pittsburgh Spring Faculty Colloquium, “Impracticability Under UCC 2-615 for Wartime Contracts” (May 2008)
  • Speaker, AALS International Contracts Conference, “Rethinking Impracticability Under UCC 2-615 for Wartime Contracts” (February 2008)
  • Speaker, Oxford Round Table, Global Migration: “The Role of the Board in a Migratory World” (July 2007)
  • Speaker, AALS Spring Contracts Conference, “Using Technology in the Teaching of Contracts” (February 2007)
  • Speaker, New England School of Law Symposium, Modern Warfare: The Role of the Non State Actor: “Contracting for Wartime Actors” (February 2007)
  • Speaker, Junior Faculty Exchange: “The Decline of State Law Primacy Over Corporate Governance” (October 2006)
  • Speaker, AALS Spring Contracts Conference: The Diversity of Contract Law: “An Emerging Worldwide Standard for Protections of Consumers in the Sale of Goods: Did We Miss an Opportunity with Revised UCC Article 2?” (February 2006)
  • Speaker, WNEC Faculty Forum:  “An Emerging Worldwide Standard for Protections of Consumers in the Sale of Goods: Did We Miss an Opportunity with Revised UCC Article 2?” (September 2005)
  • Speaker, WNEC Faculty Forum:  VEBAs, Welfare Plans, and Sec. 419A(f)(6):  Is the IRS Trying to Regulate or Spread Propaganda? (October 2002)
  • Speaker, Chase Faculty Forum: Consistency in Judicial Interpretation? A Look at CERCLA Parent Company and Shareholder Liability After United States v. Bestfoods (Fall 2000)
  • Speaker, Southeastern Conference of the AALS Annual Meeting: Young Scholars Workshops, Consistency in Judicial Interpretation? A Look at CERCLA Parent Company and Shareholder Liability After United States v. Bestfoods (August 2000)
  • Speaker, Southeastern Conference of the AALS Annual Meeting: Young Scholars Workshops, The Need for Legislative Reform in International Adoptions (July 20, 1999)
  • Speaker, University of Texas School of Law, Advanced International Law Institute Conference: Advising Clients in Trouble, Initiating and Responding to Discovery in Transnational Litigation: Procedures and Challenges (April 16,1999)
         
University and Community Service
  • Professor Martin administers the annual Selma Moidel Student Writing Competition for the National Association of Women Lawyers. 
  • Professor Martin has been nominated to the Board of Directors of CALI.
         
         
Jennifer Martin

 

09/02/2010 12:14 AM
Business Credit Cards Under the CARD Act
With the restriction from the CARD Act still coming on-line (see More New Credit Card Rules Take Effect), one can expect the card issuers to look for alternate ways to boost their bottom line. Over the weekend, the Wall Street Journal ran a piece "Beware That New Credit Card Offer" highlighting the differences between personal and business credit cards (see also, CARD Act Doesn't Help Small Businesses). The WSJ reported that mailings of applications for business, rather than personal, credit cards are reportedly on the rise. The reason? The Credit Card Accountability and Responsibility Disclosure Act only applies to consumer cards, not business ones.

About 64% of small businesses use credit cards, giving banks a good opportunity to market cards as business cards to avoid the CARD Act's strictures. With applications and pre-approvals up for business cards, it is easy to see how small business owners will need to be savvy about the differences of the cards in their wallet. The advances made with credit cards are simply not universal. Business cards are still subject to the same practices, like interest rate hikes and excessive fees that used to be the norm for consumer cards. It helps businesses to make sure that expenses are deductible for tax reasons (as well as the interest), so their might be incentive to use a business card after all. Aside from possible tax incentives, small business owners might not want to put business debt on personal credit cards as there is a potential for a negative impact on the personal FICO score by increasing the debt to credit ratio.

So, when is a small business issue also a consumer protection issue? One of the lingering problems all along with cards is consumer confusion over terms. The differences in card types are sure to pose problems over time. Moreover, the WSJ reported that some card issuers may be pushing business card applications toward consumers who otherwise would not be looking at these cards and are not likely to understand the differences under the CARD Act. Senator Charles Schumer has already asked the Federal Reserve to look into the practice of marketing business cards to consumers (see Bloomberg). While the CARD Act made headway in the realm of credit card protections, the failure to include business cards may turn out to pose a problem for consumers and small business alike. Pardon my skepticism about the card issuers and their practices, but my expectation is that we will see a rash of business card complaints over deceptive terms.

- JSM

08/30/2010 09:02 AM
Bernanke Speech in Jackson Hole, Wyoming
In case you missed it, Ben Bernanke spoke at the Kansas City Federal Reserve annual meeting in Jackson Hole, Wyoming (see transcript). The bottom line: Bernanke is not too concerned about the slowdown in growth and we should expect some relief in 2011 and beyond in the economy. Basically, just wait it out and hope for the best.

For a recap of the speech,

Visit msnbc.com for breaking news, world news, and news about the economy



-JSM

08/23/2010 09:00 AM
More New Credit Card Rules Take Effect
New credit card rules under the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act took effect this week (See Federal Reserve Press Release)! The Fed, in its effort to be more consumer friendly, has put out another "What You Need to Know" about the rules. One of the big improvements is in the area of late payment fees. Under the old system, card issues could charge basically whatever fee they wanted, whether the card holder was late on a $20 payment or a $100 payment. Now, the fee is set at $25, but the card issuer can charge $35 if one of the last six payments was also late or a larger amount if the company can justify the cost for the higher fee. In any event, the fee cannot be higher than the minimum payment due. For instance, if the minimum due was $20, then the fee cannot exceed $20.

Other new rules eliminate fees for inactivity and extra fees for violating more than one part of the cardholder agreement on a single transaction.

Another twist is requiring card companies to reevaluate rate increases every six months after an increase and to reduce the rate 45 days after an evaluation, if appropriate. Remember all those rate increases companies passed onto card holders prior to the CARD Act's implementation in 2009? Issurers are supposed to lower rates for consumers if the reason for the increase no longer exists. Basically, the Fed is supposed to monitor compliance. I've not heard of any credit card issuers widespread lowering interest rates, but here's to hoping.



- JSM

08/10/2010 12:35 AM
New Rules of Bank Fees Now In Effect
Now that August has come around, there are new rules coming online to benefit consumers. One of my favorites is the overdraft protection rules for debit cards coming into effect on August 15, 2010 for existing bank customers (See FRB: New Overdraft Rules). In the past banks often charged a $34+ fee to consumers who use their card for debit purchases or ATM withdrawals when they do not have enough money in their account to cover the cost of the purchase or withdrawal. The new rules require banks to get consumer's consent (which they should not give) for these "programs."

While the big accomplishment here is disclosure with an opt-in system to benefit consumers using debit cards, as always, consumers can still make financial mistakes that result in fees (see, WSJ, Getting Going: Ferreting Out Those Hidden Fees). For instance, just because you don't opt-in to overdraft protection, that doesn't mean you cannot overdraw your account or be charged a fee for doing so. The new rules apply to debt and ATM transaction, so consumers can still overdraw their accounts and be charged fees for check and automatic bill payments. While this system may be much superior to the previous one, consumers must still mind their balances. The new rules don't eliminate overdrafts completely, leaving some protection for transactions that consumers typically want overdraft protection.

Is this enough? One worry is that banks may push consumers into opting in or consumers may simply not understand (see, USA Today, Bank Overdraft Fees). When opening an account at Chase Bank recently, I was asked to opt-in to overdraft on my debit card. While the clerk was not pushy, I was asked if I was "sure" and did I really understand. Oh, yes, I told them. While I did not opt-in, if a consumer does opt-in the rules may not go far enough. A consumer who opts-in won't get the warning at the counter that their account is low. They will just get the fee, even for the $4 cup of coffee, rather than the ability to choose another form of payment.

All and all, this is all good news for consumers, but banks will take a hit in revenue. Wells Fargo is expecting a $500 million loss in revenue for 2010 as a result of the overdraft rules (see, Wells Fargo Sees $500 Mln). Of course, banks will find other ways to make up the lost revenue. Hopefully, the banks will clearly disclose any new fees to consumers and keep fees manageable While simple fee disclosure for me is important, those with low incomes can be faced with the choice of paying fees or not having a checking account. Some have chosen not to have accounts at all. (see, USA Today, Many Shun Bank Accounts). Consumers opting out of banking completely because the fees are either undisclosed or too high is a lingering problem beyond the reach of the new rules.

- JSM

08/09/2010 02:34 AM
Finally a Homeowner in Florida

Yes, I finally closed on a home in South Florida. Now that the boxes are unpacked (well, mostly), some thoughts on the process. Not to deter any wanting to purchase a home, the real estate market in South Florida is particularly daunting if you are wanting a mortgage (See, South Florida Mortgage Rates At Record Lows, but Who Can Get Them?). And, I was moving to a new area to start new employment adding complication to any mortgage application. The loan approval came less than a week before closing, and I breathed a great sigh of relief that the worst part was over (the tax returns, w-2s, document requests, interviews, etc.).

By the time I closed, though, new lending requirements meant a change in lending product and another round of documents! The closing was also delayed a few days. Since our family's belongings were already en route from two far reaching parts of the country (Oregon and Massachusetts), we were faced with the prospect of furniture arriving before the home closed. While it all worked out well in the end, there was much stress and the specter that it might not close at all. The lender's agent seemed unprepared for the changes in requirements for home mortgages that are ever changing, so that the lender was working last minute on details that should have been addressed much earlier in the process (i.e., calling for employment verifications for all employers for the last 5 years the day before closing). I thought to myself, with all this headache, who would actually want to buy a home in South Florida!

So, what does this all say? It seems to me a sign that changing, strict credit standards will impede the real estate market. (See, Borrowers Hit New Home-Loan Hurdles). While credit standards for home loans may have been too easy, they might now be too hard. Of course, the Florida market still has signs of distress, so it may be one of the last markets to see easing of credit standards in real estate. An excess of care and caution of lenders, though, impedes their own business and the real estate market as a whole, making recovery further off. When I listen to NPR on the drive to the office in the morning and hear reports of the sluggish real estate market, I am not surprised. The core of the problem is confidence in borrowers and the real estate market as a whole. While those in the real estate industry attempt to be optimistic, more marked recovery would seem to require a level of confidence that does not permeate South Florida at this time.

As for me, I'll be finishing off the last of my boxes for another week or so . . . glad that I can now send in that first mortgage payment next month!


- JSM

07/07/2010 11:47 AM
Tales of a Homeowner Wanna-Be
Part of my adventure of moving to Miami, Florida to join the faculty at St. Thomas University School of Law involves the purchase of a new home. Yes, I've already written about the beginning of this journey (See Tales of a Prospective Homebuyer). That was back in April! So, what is it really like? Three months later? Well, I am just a week out of closing and don't have an "official," "final" loan approval yet for the mortgage. There was the "first application," the phone interview, the mass of financial documents for the last two years, the changing loan terms, the worry over the home appraising (this is South Florida after all).

Other parts of this adventure? I since discovered that the seller had been behind on taxes and the house was listed for auction, but was just brought current in the last two weeks. There is also a pending issue on a leaking roof that I was told was fixed, but when I had the roof re-inspected found out the broken parts were just glued together! My prospective insurance agent raised the hazard insurance premium by 50% on the spot, even though his quote was only two weeks ago (found new insurance agent!). The new challenge is the documentation on the purchase funds for the mortgage lender, which is very particular.

Seriously, the days of no-documentation loans seem to be past, as far as I can see (See, The Basics: No Doc Mortgages, MSN). So, things are naturally hard out there from a loan perspective. Perhaps they should be . . . The large number of foreclosures and short sales out there also make it difficult for home buyers, even though prices can sometimes be favorable. My limited experience in shopping around for lenders indicates that while mortgage rates might be good (See, Mortgage Rates on 30-Year US Loans Fall to Record), the lenders are being more careful than in the past making it harder to purchase even if you want to in this market. But, with the housing market plunging after the government incentives for home buyers ended in April (See, Pending Home Sales Fell off A Cliff, CNN), one might expect things to be easier on buyers.

In some ways it is easier than back in April. For instance, it was much easier to secure a contract on a home than a couple of months ago. But closing is still difficult. While I have every hope that the home will close on time, my skills as a detail, paper-collecting transactional lawyer have served me well! There is now talk of what "time of day" we might be closing, so the hope is that this homeowner wanna-be will actually be just plain homeowner soon.
-jsm

05/08/2010 06:54 AM
Inexpensive Mother's Day Gifts.
There are 83 million moms in the United States! I just came home from the florist with my children ($10.47 in flowers), am getting ready to order pizza ($25 for two extra large at Pappa John's), and settling in for a movie night with my children ($40 for new dvds) for our little Mother's Day celebration! Mother's Day is a billion dollar business just behind the winter holidays! The cost in jewelry for moms is $2.5 billion,$1.9 billion for flowers for moms and $2.9 billion for eating out! Wow! (See CNN, Cost of Mother's Day). Just saw this piece on inexpensive gifts for Mother's Day!


Hopefully some of this consumer spending helps the economy. Happy Mother's Day to all the moms out there!
- JSM

04/23/2010 06:44 AM
So as Starbucks goes goes the economy?
Is Starbuck's success an indicator for the economy? Bloomberg had an interesting article today suggesting just that (See Starbuck's Results Prove Recession's Over). From the piece by Dan Mitchell:
Traffic in Starbucks (SBUX) stores increased by 3 percent. And the average bill grew by 4 percent. More people are going to Starbucks, and, once there, they're spending more. This marks the first time that traffic has grown in more than three years—since before the recession began. The company's operating margins were the highest in its history, growing to 13.4 percent. Of course, that's thanks largely to massive store closings and layoffs during the recession. But it can't happen without top-line growth.

While I'm not convinced that coffee sales at Starbuck's necessarily indicate market recovery, there might be an aspect to higher sales of comfort items that does indicate healthier markets. After all, when the economy is bad, the $3-5 cup of coffee might be the first thing to go for tight-budgeting consumers. More of a luxury or discretionary item that returns when finances are better. The return of consumer spending on discretionary items seems like a good thing. No hard science here, but the idea makes sense.

- JSM

04/22/2010 04:32 AM
Tales of a Prospective Homebuyer
Today's news reported that the tax credit is helping boost the market for existing home sales (See Bloomberg, U.S. Economy: Tax Credit Helping). The market for existing homes was up 6.8% in March. The homebuyer incentive runs through the end of April and provides an $8000 credit for new home buyers and $6500 for some other homebuyers who meet income requirements. (See, IRS: First-Time Homebuyer Credit).

The housing market is struggling for many reasons that affect current home owners and buyers alike. We are in the market for a new home as I will be joining the faculty at St. Thomas University in Miami next school year. So, we are looking for a home in South Florida. Weston, Florida to be precise. While I don't own a home in my name, I am not eligible for the tax credit as my spouse owns a home in Boston that we now rent out. And the income requirements on the lower credit put that out of reach. But, I am not complaining about that here today. So, what is it like to purchase a home in this market?

After spending a week over spring break viewing homes and making offers on several, we haven't yet secured a home. Well, we don't really need one until August anyways, but shouldn't this be easy with a housing market in crisis? The good news is that existing home sales in Florida are also up 24% over March 2009. (See, Florida's Existing Home). But, homeowners are in crisis in South Florida, with projections that recovery will not hit there meaningfully until 2011. See, Bloomberg: Florida's Housing Market). Despite the increase in sales, prices are down 3% over last year. The number of foreclosures and short sales are high. Due to depressed prices, people who don't have to sell their homes are not entering the market.

So, what did we find? A low inventory of existing homes and not too much to look at. Many homeowners in South Florida seem to have either bought high and are under water or bought low but have taken out additional mortgages on their homes making them underwater. That all ends with even homeowners who are not in trouble with their banks having difficulty selling because they either need to find a buyer who will way overpay over market (not overly likely) or come to a home sale closing with lots of cash. We saw plenty of homes where the seller must ask an over-market price because their mortgages are high, they don't have cash to close and don't qualify for a short sale. Other home owners have cash to close but are bitter at having to spend it this way on a home that is worth much less than two years prior.

Add to all of this short sales and foreclosures. We went to see one shortsale home that was unapproved by the bank where as we walked through the home the agent told us of all the things the current owner was going to remove from the home (appliances, light fixtures . . .). Shortsales can also take months to close if they ever do. We also saw a foreclosed home where the prior owner trashed the home before leaving, taking fixtures, ac units and just doing general damage to the home probably costing $100k to fix. (See, Some Ex-Owners Trashing; Owners of Foreclosed Homes Steal Appliances). Challenges indeed as this is more than I am interested in tackling at this point in time.

I've purchased homes before and always found it a pretty easy process. Most people tend to act rationally and agreeing to a deal for a home after some negotiation. While I am sure we will secure a home before August, tackling South Florida's real estate challenges is not the same as prior home purchases. If the federal government does not extend the tax credit, we may see this little increase dissipate. There are also plenty of foreclosures still in the pipeline that will continue to depress prices and hamper the market for some time. Homebuyers can purchase, but the market is just not the same.

- JSM

04/20/2010 08:52 AM
Obama Weekly Address on Financial Regulation
In case you missed Obama's address this past weekend on financial regulation, here it is:

No more taxpayer bailouts because a financial company is too big to fail was one of the key messages. Can this really happen? I am skeptical, but I guess we'll have to wait and see what the politicians agree to. Obama is correct in his assertion that something has to change in order to prevent the same crisis from reoccurring. Apparently, there will be much more coming on this issue in the near term.
- JSM

04/02/2010 01:53 PM
Federal Reserve Consumer Information on Overdrafts
With its new focus on being consumer-friendly, the Federal Reserve has published a circular on what consumers need to know about the new debit card overdraft rules. Remember, as of August 15th, banks cannot include customers in their overdraft services for ATM/Debit card transactions without their opting-in. The rules apply to new accounts opened beginning July 1. The Fed has even provided a copy of the standard form disclosure that it approved for banks to use, so that consumers can (hopefully) recognize the form when they get it in the mail (see Form). With an emphasis on consumer "choice" and education, it is good to see the Fed getting the word out.

Will consumers understand what this is all about? I suspect so. Just this last week, our 20 year old baby-sitter commented that she wished her bank, Chase, would follow Bank of America and give up on overdraft fees (See Hooray for Bank America). Apparently the word has gotten out positively for BOA. She'd been hit $35 on a debit card overdraft of less than $5. Expensive lesson, yes, but just one example where the new rules will help. Better to be denied at the counter, rather than get the hefty fee. I told her not to worry, the new rules are coming soon.

- JSM

03/10/2010 09:11 AM
Hooray for Bank of America's New Overdraft Rules?
Is the end of the $39 cup of coffee in sight (See How Your $4 Cup of Coffee Can Cost You)? Today, Bank of America announced that it is doing away with debit card overdraft fees and will just decline consumer transactions that result in an overdraft on their debit card (See Bank of America to End Bank Overdraft Fees). Seems that is just what consumer groups have said for some time that banks should do, but that some banks claimed they couldn't technologically do. Bank of America is crediting itself with listening to consumer preferences on debit cards and their desire to help customers avoid unexpected fees. Bank of America has turned into the kinder, consumer friendly bank? Apparently, they are even notifying customers now when an ATM withdrawl will result in an overdraft (and a $35 fee), rather than just pushing the transaction through. But not to worry, Bank of America will continue to have overdraft coverage that most consumers want on their checks and routine account payments. Rather than trying to convince customers that they really want the $39 cup of coffee, Bank of America has apparently caved on this one. Good for them. Doing the right thing by customers (even if under pressure from the Federal Reserve) is a big step. Hopefully, this will set the tone for other large banks to follow suit. Apparently Citibank has stopped charging overdrafts on debit and ATM transactions.

For those banks not doing away with these fees, the Federal Reserve's new opt-in rules on debit cards are due to come into effect on July 1, 2010. The Federal Reserve’s Final Rules came down on the side of the consumer on many issues. Because the Truth-in-Lending Act applies to credit cards, but does not apply to debit cards, the Federal Reserve’s Final Rules are under the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) (EFTA). The thrust of the Final Rules is primarily disclosure and consent based, rather than tackling some of the troublesome banking practices involved in the processing of overdrafts for enrolled customers and the amount banks charge for overdraft services. Specifically, the Final Rules ensure that:
(1) banks cannot enroll customers in overdraft services for ATM and one time debit card transactions without their consent (an opt-in);
(2) banks do not condition the payment of overdrafts on other items, such as checks and ACH transactions, on the customer opting-in for ATM and debit card services and cannot decline overdrafts on checks and ACH transactions for this reason;
(3) banks provide the same account terms, conditions and features to customers whether or not they opt-in; and
(4) the opt-in approach applies to existing and new accounts beginning July 1, 2010.
The Final Rules specifically declined proposals regarding the practice of debit card holds, suggesting instead that banks, networks, and merchants should address this problem.

With any luck, we'll see other large banks doing away with the debit and ATM overdrafts over the coming months. Seems easy enough just to deny the transaction at the counter. Not sure I'd say this, but good job Bank of America.

- JSM

03/04/2010 01:15 AM
FunnyorDie.com Presidential Reunion
In case you've not seen it, former Presidents Bush, Clinton, Bush, Ford, Carter and Reagan wake up President Obama in the middle of the night to urge him to pass the Consumer Financial Protection Agency (CFPA). One of the funniest parts is President Bush commenting that he had no idea that when he put the Iraq war on his credit card, he'd be paying 28%! Here it is:


- JSM

03/03/2010 09:08 AM
New Sales Survey Available!
I've just put the new Sales Survey up on SSRN. It will be out in the Business Lawyer sometime next summer. An excerpt regarding a a fun warranty case, Nigro v. Lee, 63 A.D.3d 1490 (N.Y.A.D. 3 Dept. 2009) about a car sold on Ebay:
Whether a seller’s statements made during negotiations or through advertising constitute an express warranty is a common point of contention between disgruntled buyers and their sellers. The Supreme Court, Appellate Division, of New York upheld summary judgment in favor of the defendant seller from Nevada who advertised a 1995 Mercedes Benz automobile on Ebay as “gorgeous” and with just minor blemishes, but sold the car “as is.” Upon arrival of the car to the buyer in New York, the buyer discovered the car had been damaged in an accident and had been painted, the upholstery was stained, the undercoating was worn out and parts were rusted, and that body work would cost $1,741.66. While the court recognized that any description of the goods could create an express warranty, the seller’s generalized expression was merely the seller's opinion of the car and constitutes “no more than ‘puffery,’ which should not have been relied upon as an inducement to purchase the vehicle,” particularly in light of the fact that this was a used car transaction. Moreover, the plaintiff could have discovered any deficiencies in the car by performing a routine inspection, which he did not do.
See U.C.C. 2-313.

- JSM

03/02/2010 06:46 AM
New Credit Card Rules Go Into Action
Happily, the CARD act provisions are in full effect now. So, what to look for on your statements? I think the disclosure about how long it will take you to pay off your credit card if you only pay the minimum is helpful, especially when coupled with how much you need to pay in order to pay off the debt in just three years. But, consumers must actually read the statements to get the disclosure . . .

CNN has a good piece on credit card reform (click here, as I could not embed it). With card companies increasing rates, there has been a greater proliferation of high rate cards. First Premier has a card for high risk customers that carries a 59.9% interest rate! Yikes! Interestingly, the National Credit Union Administration caps credit unions at 18% interest on credit union cards by law, but private card companies have no such similar limit (See LA Times, Seattle Times). Of course, its all about access to credit, according to the American Banker's Association. While I can understand access to credit and the need for people to build credit, 59.9% is over-the-top and at that rate perhaps some people should not be getting credit, as the cost is too high. Perhaps there is a role for the traditional usury statutes again.

Whose to blame for all this mess? Well, the Supreme Court had a part to play with its 1978 decision in Marquette vs. First Omaha Services making it legal under the National Bank Act for banks to locate in states without interest rate restrictions. Although the Court recognized that this would impair the effectiveness of state usury laws, the problem is "better addressed to the wisdom of Congress than to the judgment of this Court." Despite the passage of the CARD Act, Congress has not addressed the interest rate differential. Perhaps the increases in rates after the CARD Act might provide some impetus for changes to the extent banks overreach in their charging of customers.



- JSM