Marketing techniques for the production of sales materials can create commercial supports (virtual reality, hyper-realistic renderings…) of such vividness that it is difficult to distinguish it from reality.
These advertising materials are almost always accompanied by disclaimers, the length and detail of which depends on the series of American lawsuits that the lawyer writing them has seen, or on the Anglo-Saxon websites that the company’s Community Manager has copied.
Today we wonder to what extent that advertising is binding. What if the reality and the ad are “too” different?
A ruling from the Guadalajara Provincial Court has led us to reflect on this. The sentence is dated June 9, 2021. The defendant is an important development company, HERCESA. The plaintiffs were buyers of a flat in a resort on the Costa del Sol. The marketing materials said that there would be a lot of elements at the complex, such as a 5-star hotel, leisure and commercial areas, shops of all kinds…. All that was in the advertising brochure. The litigation is about marketing in its analogical form.
Since none of those elements eventually showed up at the complex, the buyers sued the developer.
The judgment places special emphasis on the fact that the basis of the obligation to compensate does not lay on the obligation to guarantee the construction of the complex facilities (which is not the property of the developer), but the loss of expectations of the purchasers that were described in the marketing materials to raise and trigger interest in the acquisition of the properties.
The basis of the ruling is not the breach of the obligation to deliver the home with the qualities and terms offered, but rather it lies in the fact that the sale was encouraged with expectations that, even depending on third parties, were included in the advertising and that influenced the decision to purchase the property.
In this sense, the ruling cites art. 61 of the General Law for the Defense of Consumers and Users, according to which “The content of the offer, promotion or advertising, the benefits of each good or service, the legal or economic conditions and guarantees offered will be required by consumers and users, even when they do not expressly appear in the contract”. It also cites jurisprudence of the Supreme Court on contractual advertising, etc.
And in the end, the court agrees with the plaintiffs. The issue of the amount of compensation is also very interesting. What it is about here is to know the “price” of those expectations of having a 5-star and luxury business in the complex. The expert of the disappointed clients values this damage at 20% of the purchase price (compensation of €44,000). We would love to see that expert report, as it must be really good one. So much so that the Court “buys” it entirely from the expert, and gives the claimants everything they ask for: 44,000 €
To our developer clients: truth will out.