The Commission has concluded that a modular house which satisfies anyone of the following home construction…

The Commission has concluded that a modular house which satisfies anyone of the following home construction standards is real property and should, therefore, be excluded from the Maguson-Moss Warranty Act definition of "consumer product" (1) The codes published by Building Offcials and Code Administrators (BOCA) and the National Fire Protection Association (NFPA):

(a) BOCA Basic Building Code-1975 (b) BOCA Basic Industrialized Dwelling Code-l 975

(c) BOCA Basic Mechanical Code-1975
(d) BOCA BaBic Plumbing Code-1975
(e) National Electrical Code-NFPA 70-1975.

(2) The codes published by the Southern Building Code Congress (SBCC) and the

NFPA
(a) Standard Building Code- 1976
(b) Standard Gas Code-1976
(c) Standard Mechanical Code-1976

(d) Standard Plumbing Code-1975, with 1976 revisions (e) National Electrical Code-NFPA 70-1975. (3) The codes published by the Int€rnational Conference of Building Officials (ICBO), the Int€rnational Association of Plumbing and Mechanical Offcials

(IAMPO), and the NFP A
(a) Uniform Building Code-1973
(b) Uniform Mechanical Code-1975

(c) ational Electrical Code-NFPA 70-1975 (d) Uniform Plumbing Code-1973 (IAMPO).

ADVISORY OPINIONS 983

(4) The codes jointly published by BOCA, SBCC, ICBO, the American Insurance Association. and the NFP A:

(a) One and Two-Family Dwellng Code-1975 5. (b) National Electrical Code-70-197

90 F.

Proposed marketing agreement between state association of chiropractors and mattress manufacturer (File No. 7337014).

Advisory Opinion Letter

July 19, 1977 Dear Mr. Smith:

This is in response to your letter dated October 22, 1976, as supplemented by a letter dated March 8, 1977, requesting an advisory opinion concerning a proposed agreement between the North Carolina Chiropractic Association, Inc. (NCCA), and WRD Associates, Inc.

According to the information you have submitted, WRD Associates has patented the design of a mattress which it proposes to make available to consumers by the placement of orders directly with WRD, the manufacturer-supplier. NCCA members would make literature promoting the mattresses and order forms available in their offces, and an NCCA member s signature would be required on each order received by WRD. A commission on each sale would be paid to the NCCA chiropractor from whose offce the order originated, the NCCA itself, and a yet-to-be-formed philanthropic organization promoting educational and scientific work in the field of chiropractic medicine. All sales literature would be approved in advance by the NCCA, and a disclosure of the commission program would be included in all sales literature promoting the mattresses. In addition, the NCCA and its members would have exclusive rights to promote the sale ofWRD mattresses in North Carolina as long as the Association maintains sales at the rate of at least six mattresses per year per chiropractic physician.

Given the nature of the chiropractor-patient relationship, extreme care must be exercised in order that consumer deception does not result. Primarily, there would have to be a clear and conspicuous disclosure of the relationship between the NCCA and WRD on all sales literature and forms used in connection with the sale of the mattresses. Such a disclosure should, at a minimum, conspicuously and clearly reveal that the NCCA and its member chiropractors earn commissions on the sale of each mattress, that they have contracted to be exclusive sales agents for the mattresses in North Carolina, and ADVISORY OPINIONS 985

that this exclusive agency is contingent upon a rate of sale of at least six mattresses per year by each chiropractic physician. The contract between WRD and the NCCA should be amended to require that the promotional literature containing the disclosures actually be given to every prospective purchaser. The proposed disclosure in your letter of March 8 1977, falls far short of this standard. In addition, the Commission notes that you have stated that you make no claim that the mattress will ameliorate physical disorders. However.. patients may fairly be expected to view chiropractors as healers rather than salesmen. Accordingly, even where no explicit claim of effcacy is made, the patient may be induced to the belief that a chiropractor is suggesting a mattress purchase as a concomitant to treatment and that the mattresses do in fact have therapeutic or corrective qualities, unless such implications are expressly negated. Therefore, unless the Association has satisfactory and suffcient scientific evidence to substantiate the therapeutic or corrective qualities of these mattresses, if any, it and its chiropractor members should refrain from a program of promoting the sale of such mattresses or should affrmatively disclose in writing to each prospective purchaser that there is no basis to believe that the mattresses wil ameliorate any medical condition. Finally, statements concerning the NCCA's approval of and participation in the sale and promotion of these mattresses should not be made in such a manner as to mislead consumers to the belief that the NCCA has established design standards for mattresses for the correction of physical defects or disorders, or that the WRD mattress has met any such standards.

Please be advised that we have limited our advice to legal issues. The Commission takes no position on any questions of ethics which might be raised by commercial activity of this nature by individual chiropractors or by the Association itself.

By direction of the Commission.