Legal Question in Business Law in Virginia

Re: False Advertising

The courts will have the same problems you identify in drawing that line. If faced with a specific case, the court would have to look very carefully at the facts of the individual case, not so much to a generic legal theory. For example, the court would decide based on all the circumstances whether there was an unintentional mistake or a deliberate intent to defraud. That will depend on the actual situation. Of course, it is very easy for the business to say it was a simple mistake, and who can say what was in their mind to contradict that? On the other hand, clues the court could look at would be whether there is a pattern of such actions. And of course if an insider spilled the beans, and said it was an intentional plan, that would be important.

Generally, an advertisement is not considered a solid contratual proposal (offer). So an advertisement alone would be a particularly weak example of fraud or false advertising. To pursue a lawsuit, one might have to show more than just an inaccurate price in the advertisement alone. That is, the store would probably have to make misleading statements or take misleading actions beyond simply the advertisement alone.

However, again, a persistent pattern of such "mistakes" in advertisements might tip the scales toward showing that the store is engaged in fraud and/or false advertising. Consistently posting false prices to deceive consumers might be enough to show a violation.

However, there are some problems here, because normally one must show with regard to fraud that (1) you REASONABLY relied upon the false statement, and (2) you relied to your detriment (you lost money or lost legal rights or other valuable interests).

For example, if someone wants to sell you a used car and tells you that the prophet Moses once drove this car, making it more valuable, it would not be reasonable for you to believe that statement, because Moses has been gone for thousands of years and never had a driver's license. So the law allows a seller to tell a real whopper, why I don't know, if it is not believable. That seems like a perverse incentive in the law, but there it is.

On the other hand, if the seller tells you that the car gets 50 miles per gallon, and it only gets 10 miles per gallon, you can sue them for fraud.

Also, when it comes to false prices, you would have to show what you have lost, what are your damages. Most likely your losses would be the difference between the advertised price and what you can buy the same item for somewhere else... assuming you can overcome all the other hurdles in bringing a legal claim at all.