Australia Consumer Law

Australia Consumer Law

Law Discussion Questions

Question 1

The case in discussion involves a juice extractor product purchased by Mr. Steve for use by his wife. The juice extractor product was manufactured by Moonbeam Pty Ltd but was distributed by X-Mart Pty Ltd, who sold the product to Mr. Steve. Mr. Steve’s wife known as Sally tried to use the product for the first time on some orange fruits. However, due to existing defects Sally’s fingers were badly injured in the mechanism of the juice extractor product. Moreover, an antique vase worth $1000 was damaged beyond repair during the process of rescuing her fingers from the defective juice extractor.

Product liability is part of consumer protection law where manufactures, suppliers, retailers or distributors are normally held responsible incase their products cause injuries to consumers. The scenario essentially means that a product such as the juice extractor, Moonbeam Pty Ltd was liable for the injuries that occurred to Sally under Australia Consumer Law. This is regardless of any existing contractual limitation of liability that was present. In my opinion, if the juice extractor was a gift to Sally from Steve, this legal application would not change. It is because the product was purchased to perform certain functions that it failed to. Therefore, it is important for manufacturers to offer the value of money paid to the consumers.

Moreover, Australia Consumer Law protects any private damage caused by product defects. In this case, a vase worth $1000 was shattered while Sally was trying to salvage her fingers from the defective fruit extractor. If the incident did not happen or the fruit extractor was in perfect condition, then the vase would be still intact. Therefore, according to Australia Consumer Law, Sally is liable for compensation for pure consequential or economic loss (Grantham, Fairweather & O’Shea, 2016).

Mr. Steve is liable for compensation from Moonbeam Pty Ltd who is the manufacturers under the part 3-2 in the Australian Consumer Law. This particular law binds manufactures to be directly liable to any products that have been discovered to be of unfit quality due to existing conditions such as defects (Grantham et al, 2016). In addition, the same law assures Sally and Steve for compensation in regards to injuries sustained by Sally as well as the damaged Vase due to the defective Fruit extractor. According to Australian Consumer Law, products are assumed to be defective if the level of safety does not match up to the entitled consumer expectations. It is important to note that the term “Manufacturer” is generally assumed broad and therefore, includes entities present in the chain supply (Grantham et al, 2016).

Question 2

In this case, Julie hired the services of Rick’s Renovations Pty Ltd to renovate her home by adding a balcony. Rick ordered essential products needed in completing the job such as the ten cubic meters of pre-mixed concrete. Consequently, he assisted his team of employees in building a balcony as described by Julie who is his client. After completing the task, he delivered his account to Julie and was consequently paid the outstanding bill of $3500 immediately. However, after a short period following the completion of that job the balcony collapsed causing damage to Julie’s car. An engineer’s report indicated that the balcony collapsed because of poor quality of concrete and poor workmanship. Julie is in a dilemma because Rick’s account exempted him from any liability arising from his services.

Australian Consumer Law recognizes Julie as a consumer because she bought services below $40,000. Therefore, she is protected by the ACL from any kind of unlawful acts by service providers such as Rick’s Renovation Pty Ltd. As a consumer, Julie is guaranteed by ACL to receive services that are provided with acceptable skills and care. Besides, a service provider such as Rick is expected to use his technical skills and take all precautions that are necessary to avoid unforeseeable damage or loss. Moreover, Julie has the right to receive the services that she had agreed to Rick. However, Rick being a skilled employee did not use his skills effectively to determine the quality of concrete that was supplied to him. It would be legally correct to legally state that Rick demonstrated negligence in his part as a service provider (Tsui, 2016).

Julie needed and desired to have a high quality and durable balcony added to her home by a skilled company that is perceived to be efficient to such a service. However, she received unacceptable skills, technical knowledge and negligence from Rick Pty Ltd, contrary to what she had agreed to. For this reason, Rick breached Australia Consumer Law that guarantees consumers from such kind of negligence (Miller, 2016). This means that Julie is liable for refund for all the $3500 that she paid to receive the services that she desired. Moreover, due to poor workmanship on the balcony that collapsed, she suffered loss and damage to her car. Thus, Julie has the right to claim remedy from the Rick Pty Ltd since the services provided did not meet Julie’s consumer guarantees.

Question 3

Mrs. Jones bought ‘Kleen-up’ product from Direct-By Ltd, which is a popular national distributor of household products including cleaning detergents. It is able to sell and deliver products using a catalogue. Mrs. Jones was attracted to Direct-By’s advertisement regarding excellent results that customers get should they buy and use a washing liquid that went by the name ‘Kleen-up’. This product is imported by Direct-By’s subsidiary company known as DB ltd from Bolivia where the manufactures are located. However, after Mrs. Jones’ house help used the cleaning product, she developed severe skin rash at her hands’ palms. Mrs. Jones and Mrs. Wotts were unable to notice the small printed warning sign on the product’s package.

ACL law of negligence requires the manufactures to bear the responsibility on their products by taking all necessary steps that would ensure the ultimate users of products such as Mrs. Wotts, are offered adequate warning regarding unforeseeable risks that may be associated with using products such as ‘Kleen-up’ (Khatri, 2016).  It is important to note that if Mrs. Wotts received any such adequate warning by the manufactures of the product; she would have adjusted her usage of ‘kleen-up’ product and thus would have been able to avoid the dangers of developing skin rash or would have minimized it. Moreover, such information would have ensured that she made informed decision whether or not to use ‘Kleen-up’.

Mrs. Wotts is guaranteed by the Australian Consumer Law to sue Direct-By for compensations on her injuries because of their product use (Lewins, 2016). It is quite clear that the marketing strategy employed by the manufactures did not place Mrs. Wotts in a position to accurately understand all the possible risks associated with use of ‘Kleen-up’ product. The warning that is printed on the product package was only discovered later after scrutiny as it printed in small writings, hence not clearly visible to the end-users. Therefore, the manufacturer guarantees Mrs. Wotts compensation as the court will have to examine the relevant circumstance.

 

Question 4

This is legal case of false or misleading advertisement through magazines and newspapers by The Mile High Travel Agency Pty Ltd. The agency ran an advertisement through media platforms promising consumers an experience that would guarantee them value for their money. In this case, the advertisement guaranteed consumers a fourteen trip to the West Coast of America where the clients would be fully escorted. Moreover, the advertisement promised clients that they would be treated to extended stopovers in Honolulu for just $3000. Although the travel agency’s sales manager knew that the advertisement was deceptive, he did not bother to change. A client called Anne called the agency, and was informed to pay $3500, and warned that the trip would last for only thirteen days. After the trip, she was frustrated, as she did not get to enjoy the experience promised by the agency.

The travel agency contravened the Australian Consumer Laws since it breached two fundamental rules that govern advertisements as well as selling. Advertisement agencies are strictly prohibited to engage in activities that are more likely to deceive or mislead. In this particular case, The Mile High Travel Agency promised consumers an experience worth their money. Moreover, they advertised and claimed the whole package was going to cost $3000 per individual. This was however not the case as Anne was forced to pay $3500 on a trip that did not last as advertised. Moreover, she did not get value for that money that she paid and so the advertisements deceived and misled her decisions. Thus, the travel agency made misleading and false claims in the advisement breached the ACL and deceiving the public (Hayward, 2016).

 

 

Question 5

This is a case of labeling where a margarine manufacturing company sells its products using a brand name ‘Buttercup’. This particular brand name is clearly visible to the consumers as it is printed in large letters. On the other hand, the word ‘margarine’ is represented in small prints that are not clearly visible to the consumers although they are readable. On the other hand, there is a picture that depicts a meadow where a cow is grazing. This form of labeling could be assumed to mislead the consumers by offering unclear information regarding the type of product being sold.

Labels are important tools employed by business to provide critical information on products such as the margarine sold to the consumers. It is a common practice in goods or products packaged. Moreover, it is a requirement according to the ACL. There are important or mandatory information standards of products such as margarine that ACL demands from manufacturing companies (Hayward, 2016). In essence, the ACL has imposed product labeling information that is specific such as specified consumer product standards. The margarine carton failed to accurately label the specific contents of the products. It is important to note that consumers rely on such information, as they are unable to see the contents of packaging. It is therefore important to have the contents of the packages accurately and clearly represented in the labeling (Flitcroft & North, 2016). Therefore, this particular margarine company contravened ACL rules on labeling with an aim of making profit.

Question 6

  1. Oval Tree Sweets Ltd

This is a sweets manufacturing company that packages sweets with labels that guarantee the consumers that each package holds fifty sweets. However, after random package counts, it was established that on average each package had about forty-five sweets in total. According to ACL regulations, businesses are prohibited from making statements that are misleading to the consumers. A statement on packed sweets indicates that the quantity of sweets is totaled to 50 sweets while in the accurate quantity is 45 sweets. This statement is incorrect and therefore misleading to the consumers. Thus, Oval Tree Sweets Ltd violated the ACL rules and regulations in regards to product labeling and promotion (Miller, 2016).

  1. Made in Australia

A manufacturing company clearly labeled product packages with information that indicated that the products were made in Australia while the manufacturer was based in Korea. The accurate information is that the contents were assembled and packaged in Australia after being manufactured in Korea. Therefore, the business indicated inaccurate information that gave a misleading impression to the consumers. There are specific labeling requirements imposed by ACL such as in voluntary claims areas. ACL has mandated companies to provide important information such as the country of origin, which is a compulsory product standard for the benefits of the consumers (Cantatore, 2016). Thus, this type of company violated consumer standards established by the ACL.

Question 7

  1. Flora Pty Ltd

Flora Pty Ltd had placed an advertisement for black roses that were available for the first time to their consumers. The company indicated that the stocks were limited and this was a strategy aimed at gaining consumer interest to their products. The products were to be available the following week beginning on a Monday. However, the nursery caught fire on that weekend resulting to black roses that were destroyed. The most ethical undertaking that the company is expected to take is apologize to their clients, explaining the exact events that made the black roses to be unavailable (Sim, 2016). Moreover, the company is expected to issue promise notes to the clients who paid for the delivery period. Flora Pry Ltd undertook all the precautions and therefore did not violate any ACL regulations.

  1. ACDC Ltd

ACDC Ltd made an advertisement through a regional newspaper that it was holding promotional selling that would last over the weekend. The company had indicated in the advertisement that it was selling Toshima Note Book computers at a much lower price and indicated that the stock was limited. This known as a bait type of advertisement since it offered products such as the computers at low prices with the main aim of attracting consumers to the business (Sim, 2016). It is important to note that this type of advertisement is legitimate where consumers are given accurate information regarding the available products as well as the period. However, ACDC Ltd declined to inform the consumers that there were only 10 Toshima Note Book Computers available for sale. Moreover, the products were reasonably quantified for a realistic period of a weekend. In this respect, the bait advertisement was illegal and violated the ACL regulations regarding advisements.

Question 8

A fitness centre had made a promotional advertisement that sought to invite participants to their fitness centre for a free two-hour unsupervised workout. This was an attractive offer especially for the consumers who are conscious about their physical well-being. As a result, Mary visited the fitness centre to take advantage of that particular promotion. However, she was turned down by the centre which indicated that she must enroll for a six-months fitness program in order to enjoy that free two hour workout. Mary was denied that offer despite the advisement that guaranteed her to participate and fully enjoy it. Therefore, the fitness centre failed to offer complete information to the consumers when advertising for that particular offer.

Businesses such as the fitness centre ought to be particularly careful when incorporating the word ‘free’ in their promotion. This is because the specific word guarantees consumers such as Mary to be provided services without any charges being imposed on them. It is therefore one of the most effective methods employed to attract consumer interest on company’s services or goods. Naturally, Mary assumed ‘free’ to mean an absolute free as she expected to receive from the fitness centre. It is therefore imperative for the fitness centre to reveal complete truth during such promotions including the conditions of enrolling for six-month program (Hayward, 2016).

 

 

 

 

 

 

 

References

Cantatore F. & Marshall B. (2016). Navigating the Australian Consumer Law in the digital Marketplace: Hazards for Commercial entities. Journal on Consumer Law. Retrieved from> https://works.bepress.com/francina_cantatore/103/. Date Accessed January 23, 2016.

Eng. D. (2016). Volunteers and Social Justice. Retrieved from> informit.com.au. Date Accessed. January 23, 2016.

Grantham R., Fairweather K., O’Shea P. (2016). Credit, Consumer and the Law: After the Global Storm. New York. Routledge.

Flitcroft R. & North J. (2016). Business beware when does the Australian Consumer Law Apply? Retrieved from>https://search.informit.com.au/documentSummary;dn=211482668006167;res=IELBusDate Accessed. January 23, 2016.

Hayward B. (2016). What’s in a Name? Software, Digital Products and Sale of Goods. Journal on Consumer Law. Retrieved from>  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2885523. Accessed on: January 24, 2016.

Khatri B. (2016). Getting the Definition of Consumer right-Worrying about the smaller ones . Retrieved from> http://researcharchive.vuw.ac.nz/handle/10063/5360. Date Accessed. January 23, 2016.

Sims A. (2016). The guarantee of delivery of goods under the Consumer Guarantee Act 1993 and its implementation for Australia. Retrieved from >http://researcharchive.vuw.ac.nz/handle/10063/5360. Date Accessed. January 23, 2016.

Tsui M. (2016). A Critical Analysis of Manufacturers’ Product Liability; Claims under the Australian Consumer Law. Retrieved from> http://eprints.qut.edu.au/98526/. Date Accessed. January 23, 2016.

Miller A. (2016). Promoting Economically Efficient Use of , Investment in Infrastructure in Australia: The Role of the Essential Facilities Regime. Retrieved from > http://search.informit.com.au/documentSummary;dn=179489856355837;res=IELAPA. Date Accessed. January 23, 2016.

Lewins K. (2016). Australian Consumer Law and Civil Liability Acts: Part Two. Retrieved from > http://heinonline.org/HOL/LandingPage?handle=hein.journals/ausnewma30&div=6&id=&page=. Date Accessed. January 23, 2016.

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