Law Blog

Legal Gray Area: Getting Arrested For Haggling?

We all have that friend.  You know, the friend who’s a screw-up, yet for some reason we can never seem to leave them in their own screwed up mess.  Instead, we have to help them until we also get dragged down.  The kind of friend epitomized by Edward Norton’s character in Rounders.  The kind of friend who gets us beat up and robbed, but by some unknown miracle can seem to make it up to us by shrugging their shoulders and buying us a hot dog.

No?  Don’t know him or her?  Well, once again I guess I’m the odd man out. . .

Anyway, unlike all you lucky people, I have an old friend in my life who can easily be categorized as the type of loveable screw-up described above.  He’s a fun guy and all, but every few weeks or so, like clockwork, he’ll ask a question that’s so random and out of the blue, that I feel almost compelled by some moral code to report him to the cops.  Don’t get me wrong, he’s hasn’t done anything illegal in his life for fear of being sent to Oz, but he’s just the kind of guy who’s always looking for a quick buck.

Last week he asked me if it was against the law to buy an expensive comic book from someone for a really cheap price if you know the comic is worth a lot, but convince the owner of the comic that it’s worth very little.  After arching my eyebrows and staring at him perplexed for a moment for fear that he was planning to do something stupid, I told him that it was illegal.  He was shocked, saying it was just really smart haggling and that I was lying to him.  But indeed, though I didn’t want him doing anything stupid, the scenario he described is actually illegal.

In legalese, this is what’s called “obtaining property (or theft) by false pretenses.”  It probably all comes as a bit of a shock to you guys out there on the interwebs, too, since these sorts of interactions were almost commonplace in our collective childhood playgrounds.  When I was a kid, I once bought a whole backpack full of Matchbox cars for a dollar from another kid who had found the bag on the street.  The kid had no idea how much more the cars were worth.  And yet, if I had done that as an adult, the cops could’ve probably thrown me in the slammer.  Thank goodness for this country’s forgiveness toward juvenile indiscretions.

Crime by false pretense is one of the first hypos that are thrown at first-year law students to try and rock their foundation on what they think is legal and not.  To most people, it’s just considered good haggling, but in reality, it’s actually a crime.  Essentially, false pretense can be broken down into three elements: (1) You know the actual value of the property owned by the other party, (2) you intentionally defraud the other party by way of false statements into believing their property is worth significantly less, (3) you take ownership of the property.

Now it would seem under the test described above, any haggling could be considered theft by false pretense.  However, that’s not actually the case.  People haggle all the time and negotiating for a better deal is fine and perfectly legal.  The reason is because generally in most haggling situations, both parties are usually considered to be somewhat sophisticated in that they are aware both aware of the actual value of the disputed property, but are willing to either buy it for more or settle for less based on their own needs.

The key to recognizing when a situation may be considered sale by false pretense is identifying the circumstances surrounding the false statement, and if the sale was for significantly less.  If you try to get the seller to lower his price a few bucks by attacking the quality of the product, then it’s probably fine.  However, if the seller has no idea what he has is worth hundreds of dollar and you get him to sell it to you for pennies, then you’ve probably committed a false pretense offense.

A person can still be liable even in more extreme examples. For instance, getting the seller to transfer title to his house to you in exchange for a fair payment, but never paying him once you get title.

This all might sound confusing to the average non-legal professional, and with good reason.  In law, everything comes down to the fine distinctions.  And like always, sometimes the best thing to do is consult with an attorney if you somehow find yourself in one of these iffy situations.