Consumer Law Flashcards
List the objectives of consumer law.
Includes:
-Objectives of Consumer Law:
• To establish guidelines of acceptable and unacceptable conduct by sellers and buyers. (Conduct)
• To imply terms into contacts to help safeguard consumer interests as the weaker party in most transactions. (Imply)
• To provide information that will benefit all parties in commercial transactions. (Information)
• To encourage alternative dispute resolution of consumer complaints, particularly through mediation and conciliation. (Alternate)
• To provide remedies in the event that one of the parties to a consumer agreement does not meet their legal obligations. (Remedies)
Define “Consumer”.
Includes:
- A person who acquires goods or services under $40 000.
- A person who acquires goods or services over $40 000, but they are, ‘of a kind ordinarily acquired for personal, domestic or household use or consumption’.
- A person who acquires a vehicle for use in the transport of goods on public roads, irrespective of price.
- Australian Consumer Law defines “Consumer”.
Define and explain what is a ‘Contract’.
Includes:
-A contract is a legally binding agreement made between two or more parties.
The basis of a contract is agreement, which in most cases consists of an offer made by one party to another party, and an acceptance of that offer by that party.
The person making the offer is referred to as the offeror and the person to whom the offer is made is the offeree.
Outline each of the remedies available when a contract is broken.
Includes:
- Damages, which is a compensation to the innocent party for any loss suffered.
- A court order which requires the party who has breached the terms to carry out their obligations.
- A court order forbidding the party from breaching the contract.
- A court order declaring that the contract is at an end and requiring the party who has breached the contract to put the “innocent” party in the position he/she was in before the contract was entered into.
Outline the elements of a legally binding contract.
Includes:
•Intention to create legal relations- It is essential that the parties to an agreement intended to enter into a legally binding agreement. The court will look at the behaviour and statements of the parties to determine whether they had such an intention. Agreements between family members are assumed NOT to create legal relations. (Balfour V Balfour 1919).
• Offer- An offer is a firm proposal, made with a willingness to be bound by the terms. A preliminary proposal, enquiry or price quotation is not an offer- but an invitation to treat (Pharmaceutical Society of GB V Boots Cash Chemist 1953), (Calrill V Carbolic Smoke Ball 1893).
• Acceptance- An acceptance of an offer is an unconditional agreement to all the terms of the offer. This acceptance must be communicated to the offeror, (Calrill V Carbolic Smoke Ball 1893).
• Consideration- Every contract contains at least one promise. The party being made the promise must give “something” in exchange for this promise- the “price of this promise” is called consideration (Chappel V Nestle 1960).
• Capacity- Parties must have the “capacity” or ability to enter into the contract- people below the age of 18, those mentally impaired or under the influence of drugs or alcohol are considered not to have the capacity to enter into a contract (Les Darcy 1918).
Define terms of a contract.
Includes:
-The terms of a contract relate to what each party has agreed to in the agreement. E.g. You agree to sell certain goods to Mary Jones for $500 at 11:00am tomorrow.
These promises or agreements are known as the terms of the contract and can be expressly or implicitly (shown by the actions a person takes) agreed to by both parties.
Terms can appear in the form of a written document (usually a contract), which may be signed, or may consist of oral statements.
Even if the written terms are unsigned, courts will recognise them as being part of a contract. E.g. the terms of the back of a rail or concert ticket.
Certain terms are also implied into all contracts by various statutes (Competition and Consumer Act 2010 (Cwth) and the Fair Trading Act 1987 (NSW)) for the protection of the consumer.
What are the two types of terms of a contract and outline each.
Includes:
-Terms in a contract are classified as either “conditions” or “warranties”.
-Terms that are classified as “conditions” are the most important and if these terms are not met the contract may be declared “VOID”, and the party that has been negatively impacted upon can seek compensation for loss and damages. E.g. From the previous example, if Mary Jane did not pay the $500 for the goods she has breached a “condition” of the contract.
-Terms that are considered less important are “warranties”.
If a warranty is breached the contract can be classified as “VOIDABLE” not “VOID” and the party that is negatively impacted upon may receive a smaller amount of damages.
E.g. From the previous example, if Mary Jane payed the $500 for the goods 1 hour late she has breached a “warranty in the contract.
Define exclusion clauses.
Includes:
- Exclusion causes are incorporated into contracts in order to limit the liability of one party in the contract. These terms limit or take away the other party’s right to claim damages.
- (Thornton V Shoe Lane Parking 1971).
- (Curtis v Chemical Cleaning and Dyeing Co).
What are the Standards Implied by Statutes and outline the guarantees implied from the Competition and Consumer Act 2010 (Cwth).
Includes:
-Standards implied by statutes are those terms which statute law includes into a contract notwithstanding the fact that they have not been discussed by the parties or refereed to in contract.
-Guarantees/ implied terms from the Competition and Consumer Act 2010 (Cwth) include:
• Sec 51- Guarantee as to title: The seller of the goods has “good title” to the goods, i.e. have the right to sell the goods as they own them or are acting as an agent for someone.
• Sec 54- Guarantee as to acceptable quality: Goods will be free from defects, acceptable in appearance and finish, safe and durable (when taking into account price, statements made on the packaging etc) (Nesbitt v Porter 2000 (NZL).
• Sec 55- Guarantee as to the fitness for any disclosed purpose: The good is guaranteed to perform the task that the customer has told the seller it is intended for.
• Sec 60- Guarantee as to due care and skill: Services will be performed using the care and skill required to complete the task.
Outline when common law courts intervene on unjust contracts.
Includes:
- Common law:
- Courts tend to intervene where:
- Misrepresentation, a misrepresentation occurs when one party is induced into entering a contract based on a false statement made by the other party. (Hedly Bryne and Co Ltd v Heller and Partners Ltd 1964).
- Duress, a contract entered into because of duress or a threat can be put aside (Barton v Armstrong 1976).
- Undue influence, when two persons share a relationship of trust, as might occur between family members, a doctor and patient or an aged person and their carer, it is possible that one party might influence or pressure the other party into signing an agreement. (Llyods Bank v Bundy 1975).
- Unconscionable conduct, A party to a contract who takes advantage of someone who, for example, is intoxicated, poorly educated or unable to speak English has acted unconscionably and the contract can be set aside (Commercial Bank of Australia Ltd v Amadio 1983).
Outline what are unjust terms in a standard form contract and describe what are unjust terms with examples.
Includes:
-A term will be declared unfair if it can be established that a term in such a contract:
-Will result in a significant imbalance in the parties rights and obligations AND
-Is not reasonably necessary to protect the legitimate interests of the party who would be disadvantaged by the term AND
-Would cause detriment to a party if it was relied on.
All 3 conditions must be met before a court will decide a term is unfair.
-Examples of unfair terms include (Sec 25):
-A term that permits one party to terminate the contract by not the other.
-A term that permits one party to limit the performance of the contract by not the other (Director of Consumer Affairs (Vic) v AAPT Ltd 2006).
Unfair terms of standard form contracts will be considered “void” without any action being required by a court. However, it is only the unfair term that is considered void and the contract itself will remain binding if it is capable of operating without the unfair term.
But, it is only a court that can determine whether a contract is unfair.
Outline the role of negligence in consumer protection.
Includes:
-The tort of negligence is concerned with protection of the individual, their property and economic interests from foreseeable damage caused by another person’s failure to take care. Where goods manufactured without proper care cause injury loss, damage or death the law provides legal remedies to a consumer, often in the form of monetary damages for injuries caused negligence by a manufacturer, supplier or seller of goods.
- Suppliers have a duty to warn consumers of products whose dangerous characteristics are discovered after they are already on the market.
- The Competition and Consumer Act 2010 (Cwth) and sec 34-35 of the Fair Trading Act 1987 (NSW) can require dangerous products to be recalled e.g. Hewlett-Packard Compaq Notebook (exploding lithium battery).
-At Common Law, consumers are owed a duty of care by sellers and manufacturers. Therefore, when a consumer is injured they may seek a civil law remedy. This duty of care can be traced back to Donoghue v Stevenson 1932 and more recently in Samaan v KFC.
Outline the statutory protection in relation to regulation of marketing and advertising.
Includes:
-Provisions protecting consumers from deceptive advertising and marketing practices are contained in both federal and state consumer legislation.
-These protections include:
• Deceptive or Misleading conduct (sec 19 of CCA)- Misleading conduct is where a seller does something or fails to do something which leads to consumers being misled. Advertising practices are not allowed to deliberately mislead or deceive the consumer- see Taco Bell Pty Ltd v Taco Company of Australia (Taco Bill). Name Taco Bill could be seen to mislead or deceive consumers.
• False or Misleading Representation (sec 29 CCA)- A representation is a statement or assertion. Suppliers breach the law by making false representations to consumers about their products or services. (see Ribena case).
- False representation include:
- False claim about the quality or value of a product,
- A false claim about the availability of repair facilities.
- Bait Advertising (sec 35 CCA)- Bait advertising is the practice of advertising something at a specific price with the knowledge that it will not be possible to offer it at that price for a reasonable time and in a reasonable quantity. Objective of this tactic was to get the consumer into the shop, tell them that they had run out of a particular product and then convince them to purchase a more expensive product.
- Unsolicited and Unordered Goods (sec 39 CCA + sec 40 CCA)- It is illegal for suppliers to send unsolicited credit cards or unordered goods and then demand payment.
Outline the statutory protection against unjust contracts.
Includes:
- A number of state and federal statutes provide protection against unjust contracts.
- The most significant of these include the Competition and Consumer Act 2010 (Cwth), and the Fair Trading Act 1987 (NSW) and the Contracts Review Act 1980 (NSW).
- Under section 23 of the Competition and Consumer Act 2010 (Cwth), consumers are protected from “unfair” (unjust) terms in standard form contracts for financial products or financial services (a standard form contract is one which is prepared by one party without negotiation and the party who has not prepared the contract has no real bargaining power) e.g. for telecommunications, gyms etc).
To what extent has law reform responded effectively to contemporary consumer law issues?
Includes:
-Demonstrates extensive knowledge of contemporary consumer law issues
• Makes an informed judgement (explicitly or implicitly) as to the effectiveness of law reform in relation to contemporary consumer law issues
• Integrates relevant examples such as legislation, cases, media, international instruments and documents
• Presents a sustained, logical and cohesive answer to the question using relevant legal terminology and concepts
