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Health & Fitness

Truth-in-Consumer Contract Warranty and Notice Act (TCCWNA)

TCCWNA (tick-wuh-nuh) - Another New Jersey Consumer Protection Statute

In New Jersey, the discussion of consumer protection law - for good reason - largely focuses on the Consumer Fraud Act (CFA). The CFA is a powerful consumer protection law because it provides for, among other things, treble (3X) damages and fee shifting (i.e., a losing defendant must pay the plaintiff’s attorney fees).

The CFA, however, is not the only consumer protection law in New Jersey. New Jersey also has a statute called the Truth-in-Consumer Contract Warranty and Notice Act (TCCWNA). N.J.S.A. 56:12–14. TCCWNA provides that no seller may offer to any consumer, or enter into any written consumer contract, or give or display any written consumer warranty, notice or sign, which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller as established by law. N.J.S.A. 56:12–15. The purpose of TCCWNA is to prevent deceptive practices in consumer contracts by prohibiting the use of illegal terms or warranties in consumer contracts. At the time it was passed in 1980, the legislature stated that the inclusion of illegal or unenforceable contract terms by sellers of goods or services would lead to consumers not enforcing their rights - that the illegal or unenforceable terms would mislead consumers into believing that they had no remedy. See Sponsors’ Statement, Statement to Assembly Bill No. 1660 (May 1, 1980). The Sponsors’ Statement provides:

Far too many consumer contracts, warranties, notices and signs contain provisions [that] clearly violate the rights of consumers. Even though these provisions are legally invalid or unenforceable, their very inclusion in a contract, warranty, notice or sign deceives a consumer into thinking that they are enforceable and for this reason the consumer often fails to enforce his rights.
Ibid.

The legislative history also indicated that the legislature intended that the inclusion of such illegal or unenforceable contract clause would render the entire contract void and unenforceable, provide for actual damages and provide a penalty of not less than $100 per violation. Ibid. Further, the Governor’s signing message identified TCCWNA as a measure to strengthen the CFA, see Governor’s Statement on Signing Assembly Bill No. 1660 (Jan. 11, 1982). That is the Governor indicated that TCCWNA simply supplemented the CFA and did not provide an entirely new statutory scheme for consumer relief.

Because the CFA provides for triple (3X) the amount of actual damages (“treble damages”) as opposed to TCCWNA’s provision for actual (1X) damages, litigators have largely ignored TCCNWA when representing individual plaintiffs. And, although TCCWNA expressly provides that a contract which violates the act may be declared void and unenforceable, New Jersey courts have also ruled that a contract that violates the CFA is void and unenforceable. Huffmaster v Robsinson, 221 N.J.Super. 315 (Law Div. 1986) (a party who violates the CFA may not re-cover any damages for services performed, regardless of its good faith in the transaction) cited with approval by the New Jersey Supreme Court in Cox v. Sears Roebuck & Co., 138 N.J. 2, 19 (1994). The reported cases applying TCCWNA are, by and large, class action lawsuits in which the $100 minimum penalty when multiplied thousands or tens of thousands transactions can quickly add up to large penalties. See e.g. Dugan v. TGI Friday’s, Inc., 2011 WL 5041391 (N.J.Super.A.D.) (class action alleging restaurant failed to list prices of beverages on menu).

Finally, application of TCCWNA to consumer contracts appears to be unsettled and inconsistent. Some courts have ruled that the failure to include a required contract term does not violate TCCWNA. See Jefferson Loan Co. v. Session, 397 N.J.Super. 520 (App.Div. 2008) (TCCWNA only prohibited affirmative actions, not omissions). Other courts have ruled just the opposite - that the failure to include a required contract provision violates TCCNWA. See Dugan v. TGI Friday’s, Inc., supra, (the failure to include required pricing information violates TCCWNA).

For more information on New Jersey consumer protection laws, contact Michael Millar, Esq.

E: michael@michaelmillar.com

T: 732-914-9114

F: 973-457-0269

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