The Legal Framework of a Business (Chapter 2)

Question 1

What is the Australian Consumer Law (ACL)?

Answer 1

Legislation to put in place national consumer protection laws.

Question 2

What is the Australian Competition and Consumer Commission (ACCC)?

Answer 2

A national law enforcement agency that enforces the ACL in different states and territories.

Question 3

What is the definition of Misleading and Deceptive Conduct?

Answer 3

A business can nor make a false or misleading claim about the quality, value, price or benefits of products or services.

Question 4

What section of the ACL does Misleading and Deceptive Conduct fall under?

Answer 4

Section 18.

Question 5

What are the 6 examples of Misleading and Deceptive Conduct?

Answer 5

• Bait advertising
• Country of origin
• Scientific claims
• Fine print
• Wrongly accepted payment
• Offering prizes and gifts.

Question 6

What is the definition of Bait Advertising?

Answer 6

Advertising a discounted product that is not in stock.

Question 7

What is the definition of Country of Origin?

Answer 7

When a business makes false claims about the country of origin of products and their ingredients.

Question 8

What is the definition of Scientific Claims?

Answer 8

Making scientific claims about products with no proof.

Question 9

What is the definition of Fine Print?

Answer 9

Using small print and disclaimers to hide information and mislead customers.

Question 10

What is the definition of Wrongly Accepting Payment?

Answer 10

A business must not accept payment for goods or services if it does not intend to supply the goods or services or knows it cannot supply the good or service.

Question 11

What is the definition of Offering Prizes and Gifts?

Answer 11

A person who offers rebates, gifts, prizes or other free items in connection with the sale of goods or services must honour that offer.

Question 12

What is the definition of Puffery?

Answer 12

Refers to the exaggerated claims about a product or service.

Question 13

What is the definition of a Guarantee?

Answer 13

A promise offered to a consumer after the purchasing of a product or service which is enforced by the ACL.

Question 14

What is the definition of a Warranty?

Answer 14

A written guarantee from the manufacturer of a product promising to repair or replace it within a specific period of time.

Question 15

What are the 3 types of Warranties?

Answer 15

Voluntary, Extended and Statutory.

Question 16

What is the definition of a Voluntary Warranty?

Answer 16

A warranty provided above the required statutory warranty, offered as a way to highlight the quality of products.

Question 17

What is the definition of an Extended Warranty?

Answer 17

A warranty that extends the original warranty beyond the statutory and voluntary period.

Question 18

What is the definition of a Statutory Warranty?

Answer 18

A warranty supplied to the consumer by the ACL, giving them a right to refund under certain conditions regardless of the warranty provided by the business.

Question 19

What is the definition of Product Safety?

Answer 19

The right for consumers to expect products they buy to work properly, without any risk of causing illness of injury.

Question 20

Who enforces the Product Safety Standards?

Answer 20

The Australian Competition and Consumer Commission (ACCC).

Question 21

What is the definition of Repair and Replace?

Answer 21

The consumer’s right to take a faulty or unsafe product back to the seller and ask the business to fix or replace it.

Question 22

What is the definition of an Ombudsman?

Answer 22

An official appointed to investigate complaints and oversee the admin of laws.