Classic Puffery or Illegal Misrepresentation?

Puffery: advertising copy that indulges in subjective exaggeration in its descriptions of a product or service, such as “an outstanding piece of luggage.” Puffery is always a matter of opinion on the part of the advertiser and often will use words such as “the best” or “the greatest” in describing the good qualities of a product or services. Sometimes puffery is extended into an exaggeration that is obviously untrue and becomes and outright parody, such as, “This perfume will bring out the beast in every man!”

– Jane Imbler & Betsy-Ann Toffler, Dictionary of Marketing Terms 458 (2000).

As Judge Learned Hand aptly explained, puffery is the “kind[] of talk which no sensible [person] takes seriously.” Puffery is not a foreign concept to the average automotive dealer. However, there is occasionally a fine line between puffery and fraud or misrepresentation. Of course, a customer likely cannot effectively bring a successful action against a dealership for puffery, but they can bring an action against a dealership for fraud, deception, or misrepresentation.

Iowa, like many other states, has enacted legislation to deter businesses from misleading consumers in contract terms, financing agreements, or advertisements. Under the Iowa Consumer Fraud Act, the Attorney General can bring a case on behalf of a citizen who feels they have been subjected to deceptive or misleading business practices. Further, in 2009, Iowa enacted the Consumer Fraud – Private Right of Action, which grants consumers the ability to bring a suit on their own behalf should they feel that a company has misrepresented information or deceived them in any way. Of course, this legislation only covers misrepresentation or fraud and does not extend to actions for puffery. As such, dealerships should beware of the line between puffery and misrepresentation.

Like Iowa, Indiana has similar legislation designed to protect consumers from deception in relationships with businesses—the Indiana Deceptive Consumer Sales Act. A recent case involving this act may help you find the line between puffery and deception. The Indiana Supreme Court addressed an issue where a dealership advertised a vehicle as a “Sporty Car at a Great Value Price.”

In evaluating the advertisement, the court determined that it was a statement of opinion, rather than a statement of fact. The court gave a counter-example: using the phrase that a truck is “road ready” is an affirmation of fact that the truck will actually drive on the road. Further, the court noted the significant difference between flatly stating that the car has cruise control when in fact, the cruise control does not work. While the cruise control statement is not technically false, it still misleads the customer into implying that the cruise control is functioning.

It is possible that a statement be part puffery and part statement of fact. As such, the court in this case took pains to evaluate each word in the advertisement before determining that the phrase was simply puffery. The court determined that in order for a term to be deceptive, and fall under Indiana’s Deceptive Consumer Sales Act, it must first be a representation of a fact, and not a mere opinion.

The court also noted the devastating effects that may plague the automobile industry if the court did not determine that this statement was puffery. If dealerships were so concerned that they may be sued for puffery, then they may be more inclined to list only the actual features of the car. That is, there may be no advertisement involved at all, just a list of the vehicle’s features. This would greatly reduce the dealerships ability to advertise generally.

Since the court took an in-depth look at each word in the advertisement, it is important that dealerships take a lesson and do the same. Does the describing word give a customer a promise or an opinion? If you are unsure, experienced dealer counsel should step in to help evaluate your advertising.