Week 2

Question 3 – page 606 -The federal government regulates labels, warranties, and consumer products. Without government regulation, what abuses are likely to occur?

Without governmental regulation there would be no recourse for misinformation, misrepresentation, or defrauding products that affect the consumers. Companies would not be held accountable for their product, whether it is a warranty or dangerous product type of issue. Without the regulation, a consumer would not have any protection from unsafe and wrongfulness in a product.

Question 1- page 773 -Compare the minimum contacts test, as it is applied to the bricks-and-mortar activity of businesses, to their cyberspace activity. If you were a small business, seeking to sell to customers located in other states, what are some things you could do to avoid having states where these customers live require you to collect sales tax?

A bricks-and-mortar business will have presence in the state along with employees and services within the state. They will likely be advertising and customer contact is generally enhanced due to the physical presence. Internet businesses may not exhibit the physical presence of the bricks-and-mortar business. An internet business can deal with customers without having any employees or services with the customer’s state.

Some of the things that could be done include using mail order catalog sales. With sending catalogs only to the residents of a state, that is insufficient to be subject the company to the jurisdiction of that state. With that they wouldn’t have to pay the sales tax. Another way to avoid the sales tax where a consumer lives is by not receiving benefits from that said state.

The business should not advertise, maintain any tangible physical office, hire or place employees in the customer’s state or directly provide services to the customer in the state. Another way would be limiting the business to on-line sales. That would free the business from sales...