Question: Between 1966 and 1975 the Orkin Exterminating Company the world s
Between 1966 and 1975, the Orkin Exterminating Company, the world's largest termite and pest control firm, offered its customers a "lifetime" guarantee that could be renewed each year by paying a definite amount specified in its contracts with the customers. The contracts gave no indication that the fees could be raised for any reasons other than certain narrowly specified ones. Beginning in 1980, Orkin unilaterally breached these contracts by imposing higher-thanagreed upon annual renewal fees. Roughly 200,000 contracts were breached in this way. Orkin realized $7 million in additional revenues from customers who renewed at the higher fees. The additional fees did not purchase a higher level of service than that originally provided for in the contracts. Although some of Orkin's competitors may have been willing to assume Orkin's pre-1975 contracts at the fees stated therein, they would not have offered a fixed, locked-in "lifetime" renewal fee such as the one Orkin originally provided. Under the three-part test stated in the text, did Orkin's behavior violate FTC Act § 5's prohibition against unfair acts or practices?
Answer to relevant QuestionsPatron Aviation, Inc., an aviation company, bought an airplane engine from L&M Aircraft. The engine was assembled and shipped to L&M by Teledyne Industries, Inc. L&M installed the engine in one of Patron's airplanes. The ...The Fair Debt Collection Practices Act (FDCPA) prohibits a creditor from giving a debtor the false impression that a third party is involved in efforts to collect the debt owed to the creditor. North Shore Agency, Inc., is a ...Eastman Kodak Co. (Kodak) manufactures and sells photocopiers and micrographic equipment. In addition, Kodak provides customers with service and replacement parts for its equipment. Kodak produces some of the parts itself. ...In 1975, Tenneco, Inc., was the 15th-largest industrial corporation in America. Tenneco's Walker Manufacturing Division produced and distributed a wide variety of automotive parts, the most important of which were exhaust ...Azteca, which operates a chain of restaurants, employed Sanchez from October 1991 to July 1995. Throughout his tenure at Azteca, Sanchez was subjected to a relentless campaign of insults, name-calling, and vulgarities. Male ...
Post your question