Seller Beware: ‘No Refund,’ ‘No Cancellation’ & ‘No Exchange’ Provisions in Certain Sales Contracts May Be Unenforceable

After taking delivery of the Mattress, the Spades experienced several technical problems with the remote control feature. Select Comfort and Leggett & Platt, Inc. unsuccessfully tried to repair the Mattress for almost a year. Shortly thereafter, the Spades revoked acceptance of the Mattress and requested that Sleep Number refund the full purchase price of the Mattress. Sleep Number did not do so.

On February 11, 2015, the Spades filed a proposed class action lawsuit in the Superior Court of New Jersey against Sleep Number and Leggett & Platt, Inc., who manufactured portions of the Mattress and serviced the mechanical portions of the Mattress in response to the Spades’ requests (together, the Defendants) alleging that the Sleep Number sales contract that the Spades signed (the Contract) violated New Jersey consumer protection laws. The Spades are seeking a civil penalty of the greater of $100 and the amount of actual damages, together with reasonable attorneys’ fees and court costs, per class member. The class size is estimated at 50,000.

Specifically, the Spades allege that the Contract is null and void and unenforceable because it violates the New Jersey Household Furniture and Furnishings Regulations and the New Jersey Consumer Fraud Act (collectively, the Consumer Laws). The Consumer Laws require any seller of household furniture (which includes mattresses) to include a notice in bold and 10-point font (the Required Notice) on the first page of all sales contracts for household furniture that states the following:

“If the merchandise ordered by you is not delivered by the promised delivery date, (insert name of seller) must offer you the choice of 1) cancelling your order with a prompt, full refund of any payments you have made; or 2) accepting delivery at a specific later date.”

Delivery of furniture that is damaged or not the exact size, style, color, or condition indicated on the sales contract shall not constitute “delivery” for the purposes of the Consumer Laws. Furthermore, under the Consumer Laws, it is unlawful for a seller of household furniture to require customers to enter into a sales contract that contains terms such as “all sales are final,” “no cancellations,” “no refunds,” or similar terms that violate or are contrary to the rights of consumers and responsibilities of such seller under the Consumer Laws.

The Spades argue in the complaint that the Contract:

1. Did not include the Required Notice;
2. Contained an estimated delivery timeframe not a promised delivery date as required by the Required Notice; and
3. Contained several provisions that stated sales were final and that no returns or exchanges were permitted, in each case in violation of the Consumer Laws.

In addition, the Spades also allege that Sleep Number did not comply with the Consumer Laws because Sleep Number did not give the Spades the option of canceling their order with a prompt, full refund or the option of accepting delivery at a specific later date.