Pennsylvania Supreme Court Expands Protections Against Confusing Contracts

One of the most difficult experiences for a senior is understanding a confusing contract. Although an attorney with decades of experience, even I sometimes have trouble understanding poorly drafted documents. My recent attempt to schedule a podiatrist appointment resulted in signing eight pages of paperwork in which I made one concession after another. The membership contract for my swimming club is complicated enough to serve as a law school contracts exam. Have you ever been in this situation?

Recognizing the unfairness of some contracts, occasionally the U.S. Congress tries to pass a federal law permitting one to cancel any such contract within 72 hours after signing. Despite many attempts, the law has never passed. Some states provide protection, and others do not.

Pennsylvania does have a consumer protection statute, known as the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Until recently, to receive any relief under the law, a consumer had to prove that a vendor was intentionally trying to deceive them. Another person's state of mind is a difficult burden to prove, so the law provided limited relief.

Last February, however, in a case involving a senior couple who signed a contract with an investment advisor, the Pennsylvania Supreme Court expanded the protections of that law. In the case of Gregg v. Ameriprise Financial. the court held that any contract which would create confusion in the eyes of a consumer is illegal in Pennsylvania. This applies regardless of the intent of the person presenting the contract to the consumer. Anybody who is misled by such a contract is entitled to damages, and most significantly, including attorney fees.

Although everything in the Ameriprise contract was truthful, the contract was so confusing to the average individual, that the customer was easily misled. The broker tried to rely on the contract to avoid liability for depleting the senior couple's funds, but the court did not buy it and held them liable.

As an elder law attorney, I can vouch that seniors are often subject to predatory vendor practices. Therefore, it should be no surprise that several consumer organizations filed an amicus brief in this case. Some of the parties filing an amicus brief were: "National Consumer Law Center," "National Association of Consumer Advocates," Philadelphia Community Legal Services," "The Americans for Financial Reform Education Fund," "Center for Responsible Lending," "Community Justice Project," "Consumer Federation of America," "Legal Aid of Southeastern Pennsylvania," "Neighborhood Legal Services," "Pennsylvania Legal Aid Network," and "Philadelphia Legal Assistance Center." Amicus brief filers argued that neighboring states have laws that provide greater protection than the Pennsylvania laws. They also established that the states with the highest economic growth or "GNP" also had statutes providing greater protections than Pennsylvania.

Consequently, the Pennsylvania Supreme Court interpreted the Pennsylvania statute to provide that any senior or other citizens who are misled by a confusing contract or confusing statements by a vendor are entitled to compensation for any damages, including attorney fees. It is not necessary to prove that the vendor intentionally or recklessly or negligently misleads the consumer. The test is whether or not the average consumer would be misled by any assertions and/or contract presented by the vendor. Obviously, this may require that expert testimony be presented to the court in some cases, but this is not an unusual burden for any experienced attorney. Furthermore, since the statute provides for reimbursement of attorney fees, there is no reason for any consumer to pursue a case without assistance.

This will not solve all the problems of confusing contracts in Pennsylvania. It will not prevent unscrupulous vendors from preying on seniors. But it will be significant protection for seniors in the years ahead.