The Law Surrounding Advertising

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  2. July 16, 2013 7:57 pm

The Law Surrounding Advertising

When companies advertise, they are regulated in many ways. Though the American free market system does allow companies to have a tremendous amount of leeway in their marketing, there are some laws and rules that they must follow. One of the interesting things about advertising law is that it is a matter of both federal and state concern. Because advertising is generally implicated in interstate commerce, congress has the ability to regulate it to some extent. Likewise, there are first amendment issues in play that allow companies to advertise in some ways that are protected. Any company operating in the market should understand and adhere to these regulations.

The law on false statements
As companies advertise, they are allowed to stretch the truth a bit in terms of opinion. This is known as mere puffery, as it is expected that companies would exaggerate some in trying to sell their products. This is a perfectly allowable advertising method. There is a line, though, that companies are not allowed to cross. Advertisements are generally not allowed to cross certain lines where they are stating blatant falsehoods. For instance, if a company says that it has the best quality shirts, then that is considered a matter of opinion. If one says that it offers 500-thread Egyptian cotton when it really offers 480-threat cotton, then that is a fraudulent statement.

Is an advertisement a binding contract?
Another of the important parts of advertising law revolves around contract formation. When an advertisement is put out into the market, it is not considered a contract offer by the company. Unless the company states a specific price, a specific quantity of goods offered, and provides the consumer with distinct instructions on how to claim the offer, then the advertisement is only considered to be an invitation to negotiate. Companies are not bound when a customer comes to pick up the item at that price in the absence of an enforceable contract.


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