Chapter 13 - Consumer protection legislation. At the end of this chapter you should understand: the main principles of consumer protection legislation, how the Australian Consumer Law (ACL) was enacted, the significant role the ACL plays in providing protection to consumers,...
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Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning Copyright © 2000 McGraw-Hill Australia Consumer protection legislation Chapter 13 Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning Consumables • Goods or services valued at $40 000 or less • Goods of any value of a kind ordinarily acquired for personal, domestic or household use or consumption • Commercial road vehicles • Not acquired for resupply or for manufacture Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-3Australia Copyright © 2000 McGraw-Hill Scope of the Trade Practices Act 1974 (Cwlth) • Corporations • Individuals, sole traders, partnerships and other unincorporated bodies, if engaged in - interstate trade - overseas trade - activities in S6 (Trade Practices Act) • Government utilities • Professional bodies (State Fair Trading Acts cover other entities and activities.) Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-4Australia Copyright â 2000 McGraw-Hill Constitutional basis ã Engage in foreign trade or commerce • Engage in business using the post, telephone, radio, television or telegraph, or like services • Engage in interstate trade, or trade within a Territory • Supply goods or services to Commonwealth organisations • Engage in conduct subject to international conventions Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-5Australia Copyright © 2000 McGraw-Hill Trade Practices Act (TPA) Part IV S45: Exclusionary provisions S46: Monopolies S47: Exclusionary dealings S48: Resale price maintenance Part IVA S51AA: Unconscionable conduct Part V (Prohibits corporations from engaging in unfair trade practices) S52(1): Misleading and deceptive conduct S53-59: False or misleading representations Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-6Australia Copyright © 2000 McGraw-Hill TPA (continued) Part V (continued) • S60: Harassment and coercion in relation to the supply of goods and services • S61: Pyramid selling • S63A: Sending unsolicited cards • S64: Payment for unsolicited goods or services • S65-65D: Safety of products sold to consumers; product information requirements Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-7Australia Copyright © 2000 McGraw-Hill Unfair practices (part V: TPA) S52 (1): Prohibition on misleading and deceptive conduct • Advertising of goods and services or in other activities that take place before contract entered into if: - conduct prohibited is directed at conduct engaged in by corporations - conduct must occur in the course of trade and commerce - conduct engaged in must be misleading or likely to mislead or deceive • Remedies:- Civil action for damages Injunction to stop misleading or deceptive conduct Probation orders Community services orders Corrective advertising orders Adverse publicity orders Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-8Australia Copyright © 2000 McGraw-Hill Unfair practices (part IVA: TPA) Prohibition on unconscionable conduct, i.e where a stronger party takes advantage of another party’s weakness or ignorance • S51AA: General duty on corporations to trade fairly in relation to consumers • S51AB: Deals with unconscionable conduct in connection with the supply of goods and services to consumers • Remedies: Contract void Contract varied Refusing to enforce contract Directing refund of money/return of property Ordering repair or provision of parts for goods Part IVB • S51AC: Protects small businesses from unconscionable commercial conduct (for transactions up to $3million) • S51AD: Codes of conduct Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-9Australia Copyright © 2000 McGraw-Hill Unfair practices (part IVA:TPA) • Unconscionable conduct is where one party to a transaction is at a disadvantage, because of: - age - sickness - sex - illiteracy - poverty - lack of explanation when required - language (i.e non-English speaking), and the other party takes advantage of this for their own gain Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-10 Copyright © 2000 McGraw-Hill Australia Remedies for breach of implied condition Buyer can: • rescind the contract • claim damages Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-19 Copyright © 2000 McGraw-Hill Australia Implied warranties • As to goods: - right to sell - quiet possession - free from encumbrances • As to services: - rendered with due care and skill - materials supplied as part of service must be reasonably fit for their purpose Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-20 Copyright © 2000 McGraw-Hill Australia Remedy for breach of implied warranty • Buyer can sue for damages Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-21 Copyright © 2000 McGraw-Hill Australia Manufacturer’s liability (part V: TPA) Division 2A Consumer may take action if: - the goods are defective - the goods have been supplied through sale/ lease/exchange/hire • 1A: Product safety and product information • 2: Conditions and warranties in consumer transactions • 2A: Actions against manufacturers and importers of goods • 3: Miscellaneous Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-22 Copyright © 2000 McGraw-Hill Australia Remedies for breaches of part V - TPA Civil remedies • S80: Injunctions • S80A: Disclosure • S82: Damages Orders • S87: Ancillary Orders • S163A: Declaration • S163A: Prohibition • S163A: Certiorari • S163A: Mandamus Criminal Penalties (except S52): • $1 100 000 in case of a corporation • $220 000 in case of a natural person Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-23 Copyright © 2000 McGraw-Hill Australia S85: Defences to breaches • That the contravention was due to a reasonable mistake • That the contravention was in reliance on information supplied by another person • That the default was caused by the fault of another person • That the default was due to an accident or cause beyond the control of the defendant Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-24 Copyright © 2000 McGraw-Hill Australia ACCC Australian Competition and Consumer Commission • Administers the Trade Practices Act • Ensures requirements in the Act are complied with by traders Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-25 Copyright © 2000 McGraw-Hill Australia Powers of ACCC • Administering the Trade Practices Act • Investigating and prosecuting breaches of the Act • Hearing disputes under the Act • Conducting research, and providing consumers and traders with information on their respective rights • Obtaining evidence, including documentary evidence • Establishing and administering standards relevant to product safety Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-26 Copyright © 2000 McGraw-Hill Australia Consumer complaint CONSUMER COMPLAINT ACCC DISPUTE SETTLE BEFORE COURT ACTION Copyright COURT ACTION 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-27 Copyright © 2000 McGraw-Hill Australia Settle before court • Pay restitution to consumers who have been affected by illegal conduct • Provide an undertaking to ACCC that steps will be taken to ensure Act complied with and future breaches avoided Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-28 Copyright © 2000 McGraw-Hill Australia Court action Court action dependant on following considerations: • Educative or deterrent effect • Blatant disregard of law • Significant public detriment • Need to test the limits of the act Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-29 Copyright © 2000 McGraw-Hill Australia Australian Competition Tribunal • Australian Competition Tribunal is the appeal body from the ACCC Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-30 Copyright â 2000 McGraw-Hill Australia Door-to-door sales ã Consumer provided with ten-day cooling-off period • Supplier prohibited from receiving money until cooling-off period has expired Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-31 Copyright © 2000 McGraw-Hill Australia Small Claims Tribunal - consumer vs trader Authority to hear consumer claims • Operation • Limit imposed on operation • Right of appeal and costs (no right of appeal) • How to make a claim Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-32 Copyright © 2000 McGraw-Hill Australia Role of consumer protection agencies • To educate the community about their rights as consumers • To handle complaints made by consumers against providers of goods and services • To provide information to consumers Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 13-33 Copyright © 2000 McGraw-Hill Australia ... t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 1 3- 30 Copyright © 2000 McGraw-Hill Australia Door-to-door sales • Consumer provided with ten-day cooling-off... about the profits of home-run businesses Copyright 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Fundamentals of Business Law 4e by Barron & Fletcher Slides prepared by Kay Fanning 1 3- 14 Copyright... disadvantage, because of: - age - sickness - sex - illiteracy - poverty - lack of explanation when required - language (i.e non-English speaking), and the other party takes advantage of this for their