Generally speaking, we expect to encounter truth when we read the newspaper. But turn the page to the advertising pages, and this may not be the case. Especially, sad to say, in the real estate section. There, we know we are more likely to encounter slogans, claims, and implications that are not quite true. Some, we suspect, may even be outright false.

But, how can this be? Aren't there truth-in-advertising laws? How can people get away with some of the things they say?

Well, yes, there are such laws, on both the state and federal levels. In California, the relevant sections are to be found in the Business and Professions Code at §17200 and §17500. Federally, the rules are spelled out in the Lanham Act (15 U.S.C. 1125), which are generally enforced by the Federal Trade Commission (FTC). On the other hand, there is a defense against charges under truth-in-advertising statutes. It is known as the puffery defense.

"Puffery" is defined in various, overlapping ways. A common one is that it refers to "promotional statements and claims that express subjective rather than objective views, such that no reasonable person would take literally." The FTC says that "puffery" is "a term frequently used to denote the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined."

Consider some of the phrases and statements gleaned from this past weekend's real estate sections: "A Haven of Security"; "Lovely Townhome Feels Detached"; "Stunning Elegance"; "Unbeatable"; "Upgraded to the Max"; "Best Price in Anaheim"; and "Bargain of the Year."

One could pretty well argue that none of these were literally true. But they do not violate truth-in-advertising laws. They are puffery. They are, at best, subjective expressions and matters of opinion. Their truth or falsity cannot be "precisely determined." In the words of the Wisconsin Supreme Court, they are "not capable of being substantiated or refuted."

Of course, puffery does not just apply to advertisements about properties. It also comes into play in claims and slogans about agents and companies. "The Best in Full Service Real Estate"; "Higher Standards"; and "Superior Results."

The FTC has said, "The Commission generally will not pursue cases involving obviously exaggerated or puffing representations, i.e. those that ordinary consumers do not take seriously." This position points to an important element in considerations about puffery. The whole point of truth-in-advertising laws is to keep consumers from being mislead. But if consumers are not misled, it is, in the immortal words of Chick Hearn, "no harm, no foul."

The lines between false advertising and puffery are not at all clear. A company might be able to claim it manufactures the "best car in America" with no fear of legal consequences, but if they said "safest car in America," they should expect to be in court.

Generally, for advertisers, the less specific the better. Saying you are one of America's Best Realtors® is probably not a problem. It is vague, and no one is liable to believe it anyway. But if you say you are in the "top 1 percent of Realtors® nationwide," you might expect a challenge.

In a delightful case from the United State Court of Appeals for the Eighth District, American Italian Pasta Company was found not to be in violation of the Lanham Act for using the slogan, "America's Favorite Pasta." Among other things, the court found the statement was not actionable under truth-in-advertising law because, "it fell into the category of (1) exaggerated statements of bluster or boast upon which no reasonable consumer would rely; and (2) vague or highly subjective claims of product superiority … ."

However, the court also noted that, had the claim been more specific, it might have been testable and demonstrably false. You can probably get away with saying you are America's Favorite Realtor®, but not The Favorite Realtor® of the Inhabitants of the Happy Homes Tract (unless, of course, you actually are).

So there you have it, it's okay to stretch the truth and to exaggerate, as long as consumers understand that's what you are doing. For a puffery defense to work, it is necessary that the consumer "gets it." Of course, that then raises the question: if the consumer knows it's puffery, then why bother?