1. The Nature of Consumer Law

Question 1

what is meant by the term consumer protection?

Answer 1

Consumer protection refers ti the area of law concerned with assisting consumers ( buyers and those who buy for others) to resolve conflict and legal issues relating to the goods and services they buy/ and or use

Question 2

Identify three ft of subsistence societies

Answer 2

1. people live off their own land
2. work is based in the home
3. trade is based on a system of barter rather than a monetary system

Question 3

Outline the significance of the industrial revolution in the change from a rural (subsistence) society to an urban mass consumption society

Answer 3

The industrial revolution was characterised by mechanisation, the result of significant tech developments

2. Work was centralised in workplaces to make use of mechanised processes and
3. the concentration of factories led to mass urbanisation which is a feature of modern cities
4. Factories were used to manufacture goods of a consistent or uniform standard which could be sold to householders to ease their workload.
5. THIS INITIATED CONSUMERISM BROTHERRR

Question 4

Define the term Caveat Emptor with ref. to an e.g. of when it would be relevant

Answer 4

translates to “ let the buyer beware”

–> this means that a purchaser of goods/services must exercise caution with respect to their purchasing decisions.

Question 5

Detail the importance of Donoghue v Stevenson (1932) with ref. to duty of care and the neighbour principle

Answer 5

In D v S.

1. Ms d won a suit against a manufacturer of ginger beer after she swallowed part of a decomposing snail, that was contained in the drink
2. the defendant arguers that it did not owe a duty of care to ms donoghue because she had not purchased the drink herself: a friend had purchased it on behalf
3. h/w the court HELD THAT THE MANUFACTURER HAD A DUTY TO PROVIDE SAFE GOODS TO THE MARKET AND THAT THIS DUTY EXTENDED TO MS D VIA THE NEIGHBOUR PRINCIPLE B/C THE RESULTANT HARM WAS FORESEEABLE , IRRESPECTIVE OF THE END CONSUMERS IDENTITY

Question 6

Define consumer

Answer 6

A person who uses goods/ services .

Question 7

1.2.4 why is it important for the law to characterise consumers?

Answer 7

The law needs to characterise or define consumers to clarify the legal relationship that exists between buyers and sellers and between sellers, whilst recognising that some consumers use products for their personal or household use as opposed to a business or commercial use

Question 8

Distinguish 3 parties in consumer law

Answer 8

manufacturer: The maker / producer of the good / service (product

Supplier: The intermediary between the manufacturers and consumer, interacting directly with each party

consumer: the person who consumes the goods/ services of the person who purchases the product on anthers behalf

Question 9

Outline the role of awareness campaigns in supplementing consumer protection laws

Answer 9

Awareness campaigns supplement consumer laws by guiding consumer decisions and making consumers aware of dangers of issues that are associated with particular goods and services. This is necessary as sometimes ppl may not be aware of their rights under the law

Question 10

Discuss the role of Consumer laws in providing a framework for consumer protection

Answer 10

Consumer laws are vital to provide a frame work for consumer protection; these laws guide the conduct of manufacturers and suppliers, as well as financial services providers (lenders and advisers).
Businesses must comply with regulatirt framework, which enables the activities and behaviour of manufacturers and suppliers (including retailers0 to be controlled in order to protect the interests of consumers

Question 11

Outline importances in consumer law

Answer 11

1. Product safety: very important aspect of consumer law b/c all of the consumers SHOULD BE SAFE WHEN THEY USE THE GOODS AND SERVICES: product safety= free from defect
2. Articulating standards: reference to the legislative minimum standards prescribed on the goods and services that are sold to consumers

Question 12

Define contract

Answer 12

A contract is a binding legal agreement (verbal or written) between two or more parties

Question 13

Distinguish between written nd oral contracts

Answer 13

1. A written contract is a contract recorded in writing. Some contracts must be in writing in order to be valid, such as the contract for the sale of property
2. A verbal or oral contract is not record in writing
   3, In both cases the elements of a valid contract must be satisfied to est. a contract

Question 14

Explain 4 elements of contracts

Answer 14

1. legal intention: determination that the parties intended to make a binding agreement between them
2. Offer: one part must make an offer to the other party to form the basis of a valid legal agreement
3. Acceptance; the other party must agree to offer, such that an agreement is concluded between them, which is then binding on both parties
4. Consideration: The value attached to the offer that was accepted, typically the monetary sum given in exchange for the good or service delivered

Question 15

Distinguish the role of a price tag in a contract

Answer 15

A price tag is not an offer: the law considers a price or price tag as an INVITATION TO TREAT, that is an invitation for a consumer to make an offer for its purchase. This means that the price can be negotiated
–> recent reforms to the ACL make it illegal for the advertised price of a product to be lower than the price charged in the store

Question 16

OPutline the importance of the Carlil v Carbolic Smoke Ball Co. (1893) case in understanding the concept of OFFER

Answer 16

The court in Carlil v. Carbolic Smoke Ball Co (1893) held that an offer can be made to a group of unspecified size (‘the public at large’) and still be valid if in terms of the offer are accepted.
In this case, Carbolic Smoke Ball Co. offered a reward as compensation to any consumers who became sick , despite using the product as instructed
–> Ms Carlil felt sick and was permitted to claim the reward that the business had offered

Question 17

Outline the importance of Entored Ltd Miles Far East Corporation (1955) case to understand the concept of acceptance

Answer 17

The court in Entores Ltd v Miles Far east Corporation 1955 held that when an offer is accepted via telecommunications device , the acceptance takes place at the time the other party receives it and in the jurisdiction in which they are locates
This is different to the postal rule, where acceptance of the offer takes place when and where the letter is posted

Question 18

Outline importance of privity, capacity and express adnd implies terms in a contract

Answer 18

1. Privity: only the original parties to the contract may be subject to its terms or sue ofr breach of contract
2. capacity; a persons ability to be a party to a contract can be subject to its terms or sue for breach of the contract
3. Express or implied terms; express terms are specifies in the contract whilst implied yer,s may be read into the contract
   These terms detail the rights and responsibilities of the parties of the contract. Some terms are always implied for certain types of contracts

Question 19

Explain how conditions or fundamental terms and warranties in contracts differ

Answer 19

1. Conditions ( or fundamental terms) are terms that are so essential or neccessat to the contract that if one party breaches them, the other party may consider the contract to be TEMRINATED and are this no longer BOUND to do anything else under that contract
2. Warranties by contrast are terms that are ANCILLARY OR SUBSIDIARY, to the contracts main purpose, so their breakh does not discharge the contract, it simply entitles the injured party to sue pin an action for damages

Question 20

Describe how implied terms protect consumers

Answer 20

Protect art they are read into the contract, despite to having being expressly included. The implied terms that goods are fit for the purpose, or merchantable quality and free of encumbrance are typically read into contracts

Question 21

Define exclusion clauses

Answer 21

Eclusion clauses are terms inserted into contracts to restrict the conduct of the parties or attempt to remove the jurisdiction of the courts or other entities that may try to assist the parties, in the event of a breach in the contract

Question 22

Identify 3 circumstances in which exclusion clauses will not be accepted

Answer 22

1. When they subvert the operation of existing statutes
2. When they try and exclude the courts right of intervention
3. and when they are inserted into contracts without the notice of the othe rparty

Question 23

Explain the importance of Lestrange v Graucob (1934) to an understanding of the concept of EXCLUSION CLAUSES

Answer 23

The court in Lestrange v Garoub (1934) held that if a person has signed a contract , it is assumed at the law that they know what they have signed. If an exclusion clause was contained within the contract, the law assumes their knowledge of its inclusion if they have signed the doc

Question 24

Explain ;

1. fit for the purpose
2. merchantable quality
3. free of emu cumbrance

Answer 24

1. fit for the purposE: The product does that which it is designed to do
   2; MQ: the product is in a condition that makes it of equality fit for sale
2. Free of encumbrance: a product is sold without ir being subject to a debt to another party: that is there eis no other valid claim over the product

Question 25

what is the role of standards australia with respect to PRODUCT SAFETY

Answer 25

standards Australia is an important body that assists with articulating, developing, maintaining and improving product safety standards in Australia
It helps industries to set product quality standards through the creation of safety standards. They can also endorse business processes to assist business to work in a way conductive to the creation of excellent products

Question 26

Specific legal rights that consumer has with respect to suppliers/ manufacturers/ financiers

Answer 26

SUPPLIERS:
1. The right to receive goods that are fit for purpose
2. MQ
3. Right to have products that match samples used to represent the product
4. right to have access to spare parts
MANUFACTURERS
1. right to have goods thats are under warrant repaired without change
2, right to have goods consistent with industry safety standards
3. Right to be given instructions for use, care and maintenance
FINANCIERS
1. The right to disclosure regarding the source of the finance, the fees and the total costs
2. right to a five day cooling off period
3. right to be free form coersion

Question 27

Explain the legal situation with regard to spare parts and repairs

Answer 27

Spare parts and repairs must be provided or carried out of free charge if the product sold was not MQ or if it files within the warranty period

Question 28

Why is it necessary for products to match the descriptions provided/

Answer 28

A consumer may base there decisions to purchase a product based on the description provided on packagingg/ promo material thus it mud t be honest
2. Promotional material is likely to emphasise a particular product qualities over others, but in doing this it cannot be deceptive or misleading as this is illegal

Question 29

Explain how the cost of faulty goods is determined

Answer 29

By reference to the cost incurred buy the business when rectifying goods on warranty claims due to faults occuring

Question 30

1.6.2Identify 4 areas where common law plays a role in remedying injustice under consumer law

Answer 30

The common law plays a role in remedying injustice in the following 4 areas:

1. Misrepresentaion
2. Undue influence
3. Duress
4. Unconscionable conduct

Question 31

explain with respect to contracts and injustice:
1. misrepresentation
2, Undue influence
3. duress
4. Unconscionable conduct

Answer 31

1. Misrep: An incorrect rep arising from fraudelance, mistake or negligence
2. Undue influenceL The existence of unequal power between the parties and where the more powerful of the parties abuses the trust
3. Duress: when pressure applied to party making contract thus creating them to engage in contractual relations against their free will
   Unconscionable C: Arises form the nature of unfair bargaining power: That is , amore powerful party takes advantage of their power putting the other party at disadvantage

Question 32

Outline 4 provisions under the contracts review act 1980 (NSW)

Answer 32

1. the degree of equality between the parties, 2. whether there is any duress during bargaining
2. Whether either party was placed at disadvantage due to age or intellect
   4, or any disadvantage arising form intellectual or economic difference
3. level of language used in the contract

Question 33

Explain cooling off period and its importance

Answer 33

refers to period of time during which a consumer may re consider they purchase and withdraw without penalty

Question 34

What is the Australian consumer law?

Answer 34

is a single, national consumer law. The ACL will replace provisions in 20 national, State and Territory consumer laws.

Question 35

What does the Australian Consumer Law cover? (6)

Answer 35

1 a national unfair contract terms law covering standard form consumer contracts;

2. a national law guaranteeing consumer rights when buying goods and services;
3. a national product safety law and enforcement system;
4. a national law for unsolicited consumer agreements covering door-to-door sales and telephone sales;
5. simple national rules for lay-by agreements; and
6. new penalties, enforcement powers and consumer redress.

Question 36

Who enforces the Australian Consumer Law?

Answer 36

enforced and administered by the Australian Competition and Consumer Commission (ACCC), each State and Territory’s consumer agency, and, in respect of financial services, the Australian Securities and Investments Commission (ASIC).

Question 37

What are the benefits for consumers? (ACL)

Answer 37

1. ONE LAw:The ACL now makes it easier for consumers to understand and enforce their rights because they will be the same across Australia.
2. Easy to understand: simpler and clearer than the equivalent provisions of the former Trade Practices Act and the earlier State and Territory Fair Trading Acts.
3. Better enforcement:Courts and tribunals across Australia will apply the same law to consumer disputes, allowing for clearer avenues of redress and greater consistency in outcomes irrespective of where the dispute occurs or where the court or tribunal is located.

Question 38

ACL REPLACES WHAT AND WHAT SIS??

Answer 38

former Trade Practices Act and the earlier State and Territory Fair Trading Acts.

Question 39

Benefits for businesses?

Answer 39

Clear obligations
Business benefit from clear obligations under the ACL.

Previous laws imposed different obligations on businesses depending on where in Australia a business or a particular part of a business is located or where a transaction took place.
The ACL imposes the same obligations on businesses across Australia, making compliance easier for businesses who trade in more than one jurisdiction.

Question 40

1.6.9 List 5 remedies that may be applied for breach of contract

Answer 40

possible remedies for breach of contract includes:

1. injunctions
2. specific performance
3. rectification
4. restitution
5. recision
6. damages

Question 41

Outline how an injunction works

Answer 41

court order to stop party from doing something

Question 42

Describe how contractual remedy of rectification is applied

Answer 42

Rectification is the process by which the court amends a contract to reflect the original intention of the parties to the contract

Question 43

Describe how the contractual remedy of restitution is applied?

Answer 43

Restitution is a remedy applied when one party benefits unjustly under the contract , in order to restore the situation prior to the affected party being treated unjustly. In this way the unjust enrichment of the wrongdoer in undone

Question 44

Describe what happens when a court order rescission of a contract

Answer 44

Recission is the cancellation of a contract to reflect the original intention of the parties to the contract

Question 45

Explain the role of damages as a remedy for contractual injustices

Answer 45

Damages is a monetary sum allocated to the party injured of a breach of contract

Question 46

Define negligence

Answer 46

Involves the existence of a duty of care, which has been breached , causing material damage to others

Question 47

Following elements o negligence;

Answer 47

1. The existence of a duty of care
2. Breach of duty of care
3. Inquiry resulting as a result go the breach of duty

Question 48

Explain Donoghue and Stevenson

(1932) extended notion of DUTY OF CARE

Answer 48

The court in Donaghue v Stevenson (1932) held that the plaintiff had a valid claim against the manufacturer of the drink she ingested, even though she had not purchased the erik herself
2. The Man claimed that this absence of contractual relationship negated any duty of care, but the court stated that a duty of care could be extended to anyone that could be ‘ reasonably foreseen’ to be affected
This vastly extended the scope of negligence law and became known as the neighbour principle

Question 49

Identify piece of commonwealth legislation that regulates advertising

Answer 49

Advertisig is largely regulated under the Competitions and Consumer Act 2010 (Clth ) Which provides a range of general and specific protections from deceptive and misleading conduct and advertising

Question 50

Outline the role of the Advertising Standards Board as a non statutory body providing protection

Answer 50

1. the Advertising Standards Board regulars advertising, determining whether advertising complies with the applicable codes such as Code of Ethics
2. The board may also consider complaints under other industry codes and initiatives, including motor vehicle advertising and the marketing of food and beverages to children
3. when the Board receives a complaint, it is assessed and, if accepted the advertiser and complaint of their determination
4. A case report is then published

Question 51

Define occupational licensing

Answer 51

Refers to the government requirement that particular types of work can be only undertaken if a permit (license) has been obtained. thus ensuring basic minimum standards are maintained

Question 52

identify 8 occupations that are subject to licensing restrictions

Answer 52

plumbers, carpenters, electricians, gasfitters, bus drivers, builder,s travel agents, and real estate agents

Question 53

Distinguish self regulation from legislation

Answer 53

A business may self regulate by its own minimum benchmark standards for use as a voluntary code, then making this code available to the public so that they are held accountable to the code

2. generally self regulation is co ordinated through an industry representative body
3. Legislation, on the other hand, is imposed by government to regulare businesses in certain ways where upon businesses are penalised id they fdo not comply

Question 54

Identify the state based legislation requiring motor traders to trade sunder license

Answer 54

The Motor Dealers Act 1974 (NSW) requires the motor dealers to trade under license

Question 55

Outline 2 constraints placed on travel agents under the act that licenses them

Answer 55

The acts constrains motor dealers by requiring that all new cars have a minimum warranty of 12 months or 20,. 000 km 9which ever less) and that all second hand cars have a 3 month or 5000 km warranty (which ever less) .
there are some applicable exclusions to these constraints.

Question 56

Outline the grounds for review of licensing decisions

Answer 56

1. The person does not have the qualifications or edu. required
2. The person is financially insolvent, or bankrupt
3. Od the person is of bad character ( e.g. has crime history)