In past posts I have written about what the Consumer Fraud Act (CFA) is and to who it applies. In this post I will look at what kind of items or transactions fall under the CFA. The first place to look to see what is covered is the statute itself. NJSA 56:8-2 provides that the act applies to the “sale or advertisement of any merchandise or real estate. . .” What is merchandise? The Act defines merchandise as “any object, wares, goods, commodities, services or anything offered directly or indirectly to the public for sale.” NJSA 58:8-1.
While this is not meant to be an exhaustive list the following transactions have been deemed to fall under the CFA:
- The sale of computers
- The sale of cars
- The sale of a life time membership in a consumer discount program
- Home improvement contracts for work on an existing structure
- The sale of pets
- The sale of real estate through a realtor
The CFA has not been applied to the following kinds of transactions:
- The sale of securities. Although securities were going to be included when the Act was originally proposed, they were purposely removed – and, therefore, not covered.
- Attorney services
- Medical services
- Construction of a new home. It does, however, apply to renovations of current homes and to contractors hired by the homeowner to perform work on new construction.
- Sale of businesses
The CFA also does not apply to the sale of an ongoing business, although there is some question as to whether it may apply to the purchase of a franchise. According to a NJ Appellate Court case, the sale of a franchise is covered by the consumer fraud act when the sale is not covered by the Franchise Practices Act. A U.S. Federal District Court for New Jersey and the Third Circuit Court of Appeals, however, have found that the CFA does not apply to the sale and purchase of a franchise. So, for the sale/purchase of a franchise there may be a question as to whether it is likely the NJ courts would enforce the consumer fraud act. In other words, the application of the CFA to the purchase of a franchise is likely but not guaranteed.
NJ Courts have consistently applied to the CFA in a liberal manner to provide the full protection of the law to consumers. While the above list is not an exhaustive list, it does demonstrate that the CFA can cast a wide ranging net on sales activities. As you plan your sale of your merchandise keep it is very likely that the CFA applies to you.
For more information on the Consumer Fraud Act, please read:
With Consumer Fraud a person really means a person