chapter 10 option 1: consumers. in this chapter, you will study the nature and concepts of consumer...

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  • Chapter 10 Option 1: Consumers
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  • In this chapter, you will study the nature and concepts of consumer law, methods of consumer redress and available remedies. You will also study some contemporary issues for consumer law, including credit, product certification, marketing innovations and technology.
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  • Historically, there was little recognised need for consumer law. Pre-industrial markets were typically smaller and local, and vendors and buyers often knew each other. The law was based a notion of caveat emptor (buyer beware), where the buyer held the risk in the transaction. The market was based on a laissez faire economy, with minimal intervention of laws or the state. The developing need for consumer protection
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  • With the Industrial Revolution, manufacturers and sellers were often wealthy, well-educated industrialists in large organisations. Buyers were often poor, uneducated workers with little bargaining power. The need to address imbalance and revise the law became clear. The developing need for consumer protection
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  • Today, consumer markets have become more complex. Specialised product knowledge is often required when purchasing goods; consumers frequently rely on the sellers expertise and that goods will be reliable for their stated purpose. Safeguards have become essential in modern society to resolve conflict and protect consumers from exploitation. The developing need for consumer protection
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  • A consumer is a person who buys or uses goods or services generated within the economy. A consumer is generally someone who buys the goods or services purchased for private use or consumption. The definition of consumer
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  • Consumer law relates to the interaction between three categories of actor: manufacturers or suppliers the state (parliament and judiciary) consumers. The primary objective of consumer law is to protect the welfare of consumers. Objectives of consumer law
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  • A contract is an agreement made between two or more persons that is recognised by the courts as being legally binding on the parties. Contracts can be: written in a formal manner oral a mixture of the two. Contracts
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  • For a contract to exist, the following elements must be present: the parties intention to create a binding contract an offer by one party acceptance of that offer by the other party consideration (value or promise) from the promisee. Contract formation
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  • Other issues in forming a valid contract can include capacity to contract (eg a minor), illegal contracts, mistake, misrepresentation or duress, or special requirements (e.g. transactions for sale of land). Contract formation
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  • Other issues in forming a valid contract can include : capacity to contract (e.g. a minor) special requirements (e.g. transactions for sale of land) free will and consent, including issues like mistake, misrepresentation, duress or undue influence contracts for illegal acts or contrary to public policy. Contract formation
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  • conditions fundamental terms that allow a party to terminate the contract if the other party breaches it warranties peripheral terms that do not allow termination, but can require the party to rectify or pay damages if the warranty is breached. Contract terms Terms describe the content of the contract they can appear in the form of a written document or may consist of oral statements. Terms are either:
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  • Contracts contain both:. express terms written into the contract or expressly agreed implied terms terms that are implied into the contract by common law or statute, or by the presumed intentions of the parties. Contracts also frequently contain exclusion clauses, which limit one partys liability to the other in the event that something goes wrong. Contract terms
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  • The common law implies a number of terms and safeguards into a contract that can help shield consumers from exploitation. Some issues include: protection from undue influence in making a contract requirement for reasonable care in performing services protection from duress in forming the contract products must be of merchantable quality products must be fit for the purpose for which they were sold/bought products must match their advertised description suppliers cannot engage in misleading and deceptive behaviour. Implied terms common law
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  • Federal and state legislation also provides for a broad range of protections. The main legislation includes: Competition and Consumer Act 2010 (Cth) (formerly Trade Practices Act 1974 (Cth), renamed from January 2011) contains provisions on defective products, unfair contract terms, misleading and deceptive conduct and unconscionable conduct, among other protections Fair Trading Act 1987 (NSW) mirrors the federal legislation. Implied terms statutory
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  • Where goods are manufactured or services provided without proper care, they may cause injury, damage or even death. There are a number of legal avenues a consumer can take to seek some form of compensation or redress, including: action under the relevant federal or state legislation (e.g. Competition and Consumer Act 2010 (Cth) or Fair Trading Act 1987 (NSW)) action for breach of contract or breach of an implied term action in the tort of negligence for breach of a duty of care. Negligence and consumer protection
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  • The Australian Consumer Law (Competition and Consumer Act 2010 (Cth) (formerly Trade Practices Act 1974 (Cth)) and relevant state law), contains various prohibitions on marketing and advertising practices, including: misleading or deceptive conduct false or misleading representations unconscionable conduct falsely offering gifts or prizes bait advertising referral selling pyramid selling unsolicited and unordered goods coercion. Regulation of marketing and advertising
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  • Other forms of regulation include: mandatory cooling off periods required in certain situations regulation of advertising and marketing administered by the Advertising Standards Bureau (ASB), through the Advertising Standards Board and the Advertising Claims Board. Regulation of marketing and advertising
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  • The imposition of licensing and registration is an attempt to guarantee that people employed in various occupations have attained the requisite skills and perform their roles honestly. Regulation of professions and occupations can take different forms, including: registration certification licensing. Occupational licensing
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  • Industries and professions may be regulated by: self-regulation, through professional standards bodies, for example: the Australian Medical Association NSW Law Society regulation by the state, for example: state licensing of motor car dealers and repairers state licensing of travel agents. Occupational licensing
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  • Self-help avenues are usually open to consumers who feel they have been badly treated by suppliers or manufacturers. The consumer can often seek redress by complaining directly to the supplier or manufacturer. Consumer redress and remedies
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  • State government bodies can also be approached for assistance in consumer complaints, including: NSW Office of Fair Trading Community Services Commission NSW Legal Aid. Government organisations
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  • Federal bodies also deal with various aspects of consumer policy, regulation and advice, including: Commonwealth Department of the Treasury Consumer Affairs Advisory Council Australian Competition and Consumer Commission (ACCC) Ministerial Council on Consumer Affairs. Government organisations
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  • Options are also available within some industries to assist with consumer issues and dispute resolution, including: industry-based dispute resolution schemes customer-focused corporate compliance industry-based ombudsman. Industry organisations
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  • If other types of dispute resolution fail, the parties may seek resolution by a court or tribunal: Consumer, Trader and Tenancy Tribunal (CTTT) can conciliate or hear a dispute between tenants, landlords, traders and consumers in a timely and effective manner courts litigation in courts is usually a last resort; it can be more costly and time-consuming than other avenues. Courts and Tribunals
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  • Some possible remedies include: damages for harm or loss to the party rescission or modification of a contract special orders for example rectification or repair of the goods injunctions to require a party to do or not do something specific performance of a contractual obligation. Remedies
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  • Credit in consumer law refers to the purchase of goods and services in advance of future payment. In modern society, credit is very common and many consumers live well beyond their means. Contemporary Issue 1: Credit
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  • Consumers using credit can risk exploitation by unscrupulous lenders or other issues such as: unfair contract terms inadequate procedures for handling complaints time delays in handling complaints too many difficulties in seeking legal redress. Contemporary Issue 1: Credit


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