The Other Golden Rule
Do What You Say
by Charles Gentry

It’s a simple saying. Do what you say. It’s easy but not a rule everyone follows. Let me give you an example: many manufacturers and dealers have increased their profits substantially by selling the $1,500 tax credit to residential customers. In today’s economy, who doesn’t want some cash kicked back?

While tax credits still exist, the $1,500 credit expired on December 31, 2010. The new tax credits exist at a much lower level. Many fenestration companies continue to proclaim the $1,500 tax credit is alive and well. One of the “best practices” I advise fenestration clients about is to make certain they actually provide what they promise. Companies’ failure to harmonize their selling literature, website and other forms of advertising with what they actually provide is a recipe for disaster.

A few days ago, I received a call from a national manufacturer, “Tax Credit Windows.” As is often the case, the company was under attack from Duey, Cheatem and Howe, a law firm with a reputation of putting manufacturers out of business. The CEO of the window company exclaimed, “I need your help!” After listening to several minutes of stressful venting from him, I figured out that the lawyers claimed the company sold a “pig in a poke.” Tax credits were used to close a substantial sale. The problem was that the tax credits used during the sales pitch no longer existed. A quick research from the Google cache brought up a website proclaiming $1,500 credits remained an option. Oops. Letters and phone calls had already been exchanged.

“Ch’Ching” I thought. Hint: My client was not going to be happy about the exposure it unknowingly created. I was worried about green. Not the energy codes. Not the color of the logo. I was worried about my client’s cash. The owner’s lawyers claimed that the windows were misrepresented, violating advertising laws and rising to the level of fraud.

"Tax credits were used to close a substantial sale. The problem was that the tax credits used during the sales pitch no longer existed."

“You have a problem,” I said. My thoughts wandered for a moment recalling all of the window manufacturer websites, sales literature and warranties I have reviewed, analyzed and modified over the years. I asked, “Do your products perform as you say? Do your promises actually conform to your products as manufactured? Do your promises comply with the law?”

“They should!”

Not the answer I was hoping for. Not the answer a jury will appreciate during the lawsuit hiding like a snake in the grass ready to strike its prey.

“Our sales reps do the best they can to sell as much product as possible. Puffery is part of the business. We can’t possibly keep up with all of the tax credit laws.”

After figuring out a strategy to respond to the claims against my client (a subject to detail in another article), I calmed the owner by explaining how to help avoid the problem in the future. “Build what you say you build. Know that any description that is part of the sales pitch, including NFRC labels, U Factor, solar heat gain coefficient, visible light transmittance, tax credits, etc., can create a warranty or a promise, whether intended or not. Have everything you say, both written and spoken, analyzed and modified by those in the know to avoid making promises you can’t keep. You must make sure your brochures, websites, billboards, ads, the name of your products, and the statements made by your sales staff all match up with what your windows actually deliver to the customer.”

I further explained, “Ignoring one piece of the puzzle risks everything. Duey, Cheatem and Howe will use every legal theory available to help make the best case they can for their client. The theories at their disposal include breach of warranty, negligence, product liability, fraud and consumer protection claims. Many consumer protection laws allow for doubling and tripling of damages coupled with attorney’s fees. The money claimed will not just be money to fix the problem. The money claimed will include punitive damages, not likely covered by insurance or bankruptcy. In other words, do not ignore a single piece of the puzzle.

The owner of the company, elated, said, “Thank you!”

“Anytime,” I said. “Now you can make sure your sales staff, your brochures, your labels and your products all match up to meet the needs of your customers.

Charles Gentry is an attorney with Carson and Coil PC in Jefferson City, Mo., and works with many door and window manufacturers.

DWM
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