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Judicial Review

As we’ve seen from the discussion of “common law” — the law is constantly evolving. Each year we see advances in technology that were not contemplated by the law. Courts must interpret laws written at one time for the circumstances of another. How is a constitutional protection written in the 18th century against unreasonable searches and seizures to be applied to 21st century e-mails and telephone calls?

Courts routinely adjust old legal concepts to fit new situations, often in the hopes of maintaining stability within the law. But over time, a changing judicial climate can sometimes lead to a different focus or emphasis.

Then — Caveat Emptor
Caveat Emptor: “Let the buyer beware” Under this legal principle, each consumer is responsible to weigh the risks and benefits of a possible purchase and look out for his or her own best interests. This doctrine works fine when the purchaser is relatively well-informed of the risks and benefits of the product — it is easy to smell spoiled milk or tainted meat.
Now — Caveat Vendor
Caveat Vendor: “Let the seller beware” This creates a legal system in which sellers are held accountable for their products — and an environment in which lawsuits are filed against the real or imagined shortcomings of today’s products.

As society advances and products become more sophisticated, how is a consumer to be informed of all the possibilities being presented? Are lithium ion batteries in a laptop computer more likely to catch fire than other types? Are trans fats healthier for the human body than butter? Is group credit life insurance sold through banks a better way to pay off a mortgage than other types of coverage?

The modern world presents us with myriad choices, yet fewer and fewer of us are competent to analyze all the risks and benefits those choices offer. As a result, the courts have edged away from caveat emptor toward caveat vendor.

In this litigious environment, full disclosure becomes an increasingly important feature of the sales process. Insurance agents must ensure that clients are fully informed of all the risks, benefits, limitations, and alternatives relevant to their insurance purchases.

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