Module 8

Question 1

Assume Farah has breached the contract. A court is likely to find the $4 500 cost of hiring ranger Nick is:

Answer 1

A direct loss

Question 2

Assume that Farah has breached the contract. A court is likely to find the cost of Tom’s stay at TM Kennel (that is the cost Rhianna refuses to pay is)

Answer 2

A direct loss

Question 3

What is the likely result of Rhianna’s claim for $2000 in damages for distress due to Tom’s newly developed aggressive behaviour?

Answer 3

Unlikely to be successful in this claim as it is not a direct or consequential loss flowing from Farah’s breach

Question 4

What is consumer law

Answer 4

Law that regulates consumer transactions and the std conduct of the business that produces goods and services

Consumers have limited info and bargaining power when dealing with corporate manufacturers and service providers

Question 5

Consumer law

Answer 5

Is a mixture of legislation and common law

Question 6

Legislation consumer law

Answer 6

Sale of Goods Act
Competition and Consumer Act 2010
Australian Consumer Law

Question 7

Competition and Consumer Act

Answer 7

Federal piece of legislation that operates AUS wide
Largely follows the TPA with two significant exception
- introduction of a consumer guarantee regime
- more nationally oriented product safety legislation

Question 8

Misleading or deceptive conduct s18

Answer 8

• Formerly section 52 of the Trade Practices Act 1974
• A person must not in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive
• Has a very broad application

Question 9

Components of s 18

Answer 9

A person
In trade or commerce
Engaging in
Misleading or deceptive conduct

Question 10

A person includes

Answer 10

both natural persons and corporations

Question 11

Misleading or deceptive conduct refers to

Answer 11

conduct that leads members of the public in their capacity as consumers of goods or services into error, or is likely to do so.

Question 12

The test of whether something is misleading in a s 18 sense is the

Answer 12

meaning that would be given to the representation by an ordinary and reasonable member of the class of consumers to which the representation was addressed

Question 13

McWilliam’s Wines Pty Ltd v McDonalds System of Australia Pty Ltd (1980)

Answer 13

Facts:
McWilliams Wines named one of its wines the ‘Big Mac’
McDonald’s who have a hamburger called the Big Mac claimed that McWilliam’s use of the name amounted to misleading and deceptive conduct

Issue: Was McWilliam’s use of the name misleading?

Decision: No the distinction between wine and hamburgers is clear so as not to confuse the relevant class of consumers

Question 14

Taco Co of Australia v Taco Bell Pty Ltd (1982)

Answer 14

Facts: a mexican restaurant named “Taco Bell” opened in Sydney
Another corp in Sydney used that name for its Mexican restaurant over the previous five years. They brought action for misleading and deceptive conduct

Issue: was the newly opened restaurants use of the name misleading?

Decision: Yes because both restaurants sold the same type of food

Question 15

Campomar Sociedad Limitada v Nike International Ltd

Answer 15

Facts: a Spanish company made perfume under the name “Nike Sports Fragrance’
Nike international was a large sports apparel company. The nike perfume was displayed in pharmacies underneath other sports fragrances including one by Adidas

Issue: could Nike sue for misleading and deceptive conduct

Decision: Yes it was, it would lead the class of consumers who purchase Nike to think the perfume was another product

Question 16

Remedies for misleading or deceptive conduct

Answer 16

• Injunction
• Damages
• Adverse publicity orders

Question 17

The meaning of ‘consumer’ under the ACL

Answer 17

S 3 of ACL provides definition of consumer
Person is taken to have acquired particular goods or services as a consumer if and only if
- the amount payable for the goods or services did not exceed 40 000
- the goods or services were of a kind ordinarily acquired - domestic consumption
- the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public road

Question 18

A consumer transaction is not covered by legislation where they

Answer 18

were acquired for resale or for consumption by way of trade or commerce or in the course of repairing or treating other goods or fixtures on land

Question 19

Guarantee as to title s 51

Answer 19

there is a guarantee that the supplier will have a right to dispose of the property in the goods when that property is to pass to the consumer

Question 20

Guarantee as to undisturbed possession s52

Answer 20

Does not apply if the consumer was aware of any encumbrance

Question 21

Guarantee as to acceptable quality s54

Answer 21

Where goods are supplied to a consumer in trade or commerce other than by way of sale by auction there is a guarantee that the goods are acceptable quality

• fit for all purpose will goods of kind are commonly supplied
• acceptable in appearance and finish
• free from defects
• safe
• durable

Question 22

Fitness for any disclosed purpose s55

Answer 22

If the supplier supplies in trade or commerce goods to a consumer other than by way of sale by auction then they must be fit for any purpose disclosed
- fitness is express or implied

Question 23

Guarantee as to supply of goods by description s 56

Answer 23

Guarantee that the goods supplied correspond to the descirption

Question 24

Guarantee as to supply of goods by sample or demonstration model s57

Answer 24

If a person supplies in trade or commerce goods to a consumer by reference to a sample or demonstration model and not by way of sale by auction there is a guarantee that

• goods correspond with the sample or demonstration model in quality, state or condition
• if the goods are supplied by reference to a sample the consumer will have a reasonable opportunity to compare the goods with the sample
• goods are free from any defect that would not be apparent on reasonable examination, cause them not to be examinable quality

Question 25

Fitness for particular purpose s61

Answer 25

There is a guarantee that goods should be fit for a purpose disclosed by buyer

Question 26

Reasonable time s62

Answer 26

there is guarantee that when time frame of contract is not established goods or services be supplied within a reasonable time

Question 27

Services for which there are no guarantees

Answer 27

s63 provides that there is no guarantee in respect of transportation or storage or insurance

Question 28

Guarantees are non excludable

Answer 28

s64 provides that guarantees are not to be excluded, restricted or modified by a term in the contract.

Question 29

ACCC v MSY Technology Pty Ltd

Answer 29

Consumer product seller tried to have a no return policy but this is not able to be excluded

Question 30

Consumer remedies

Answer 30

Where there is a breach of a guarantee the consumer has a remedy against the supplier

The nature of the remedy depends on whether the failure to comply with the guarantee is a major failure

Question 31

A major failure arises if:

Answer 31

a) goods would not have been acquired by a reasonable consumer fully acquired with the nature and extent of the failure
b) the goods depart in one or more significant respects
i) if they were supplied by description
ii. . supplied by reference to a sample or demonstration model
c) the goods are substantially unfit for purpose for which goods of the same kind are commonly supplied and cannot easily and within reasonable time be remedied to make them fit for purpose
d) the goods are unfit for a disclosed purpose that made known to
i) supplier of the goods
ii) any person by whom any prior negotiations or arrangements in relation to the acquisition of goods without being remedied in reasonable time frame
e) the goods are not safe

Question 32

Consumer rights where failure can be remedied and is not a major failur

Answer 32

Consumer can require supplier to remedy within reasonable time
If supplier does not do so consumer can:
- reject goods and recover money paid
- have the failure remedied by another and recover reasonable costs from the supplier
- damages for loss or damage may also be recovered (only to extent that is reasonably foreseeable)

Question 33

Consumers rights where is failure is major that cannot be remedied

Answer 33

Customers choice to recover compensation for reduction in value (therefore keep goods)
Reject goods and have money returned
Damages for loss or damage may also be recovered

Question 34

Unfair contract terms

Answer 34

The ACL provides that a term within a consumer contract is void if the term is unfair and the contract is a standard for contract e.g. contracts for car rental, mobile phones… where there is no room for bargaining and the terms are imposed by the stronger party

Question 35

S 27

Answer 35

provides a series of tests that the court can apply to decide if a contract can be described as standard form

Question 36

Jetstar Pty Ltd v Free

Answer 36

lady changing airline booking
jetstar hit her with 900 dollar fee
took them to court
court didn’t find it unfair because it was made clear to her and similar to what other airlines charge