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Schumacher v. Supermarkets General Corp.

A-3437-96T2 (N.J. Super. App. Div. 1998) (Unpublished)

CONSUMER FRAUD; AGENCY; LIABILITY—The mere posting of an advertising sign in a retail store by a contractor does not make the store liable for deficiencies in the contractor’s work, but, under certain circumstances, the contractor may have apparent agency authority, making the store liable.

A consumer purchased bathroom fixtures for use in connection with a contemplated renovation of a bathroom. The store contained signs that read “DELIVERY & SET-UP SERVICE NOW AVAILABLE. See Customer Service Representative for details.” The name of a contractor appeared at the bottom right hand corner of the signs. According to the customer, within a short time after leaving the store, she called to speak to a customer service representative about the service and was told that the store “had someone who assembled and installed bathroom fixtures for them and that this individual would be calling [the customer] to do the” work. She was then contacted by the contractor’s owner who, according to the customer, said that he was calling from the store. A meeting took place, and the customer entered into a home improvement contract. The contract was prepared on the contractor’s letterhead.

The customer asserted that based upon representations by the store and the contractor’s owner, she believed that the contractor was working for, and under the authority of, the store and that the store “stood behind all of the work.”

Under the contractor’s agreement with the store, it was a licensee. That agreement further provided that the contractor would “provide installation for all goods and merchandise sold by [the store] as agreed-upon between the parties… .” It expressly stated that the contractor and the store were not partners, joint venturers, or agents of each other. In addition, the contractor testified that the agreement did not contemplate the performance of renovation work, and before doing the work for this customer, it “never performed any kitchen or bathroom renovations for [the store or through the store] for anyone.” On the other hand, the contractor admitted that it occasionally performed miscellaneous work, such as “remodeling” for the store’s customers, and collected the fees through the store.

The Court was unsympathetic to the customer’s consumer fraud claims. It held that the store merely placed signs in its stores advising shoppers that it provided a “delivery and set-up service.” In its view, the signs could not be reasonably or objectively be understood to apply beyond “delivery and set-up” of products. As such, the signs did not include household renovations or improvements or a guarantee of the quality of such services. Furthermore, the Court held that the store was unaware of the contractor’s agreement with its customer. The store’s agreement with the contractor did not contemplate renovation or plumbing work and there was no suggestion that the store had an understanding that such work would be done.

On the other hand, the Court believed that the customer should have an opportunity to prove whether an agency relationship existed between the contractor and the store. In order for an agency relationship to exist, the principal must consent “to have another act on its behalf, with the principal controlling and directing the acts of the agent.” While the Court found no evidence of an actual agency relationship, it pointed out that apparent authority exists where the actions of a principal have misled a third party into believing that a relationship of authority existed, and where the third party has relied upon this belief to his or her detriment. Lastly, the Court held that although a principal can be liable for the conduct of an agent under the Consumer Fraud Act, only an express agency, not an apparent agency, would invoke that rule.


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