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Consumers

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The rise of mercantile capitalism and the industrial revolution has made village consumerism irrelevant. Products were once less complicated due to the local nature of industry with the idea of caveat emptor “let the buyer beware” and laissez faire (no govt intervention) these are now outdated due to manufacturers engaging in deceptive conduct. This lead to the need for law reform. Consumer laws objective was to remedy the imbalance between manufacturer and consumer and reflect the moral and ethical standards of society. The following essay will evaluate the effectiveness of the legal responses which protect consumers with regards to occupational licensing, implied terms, marketing and advertising, exclusion causes, and unfair contracts.
A contract is a legally binding agreement. Every consumer transaction is a contract. A contract for goods and services is the main consumer contract; it involves one party (the supplier) supplying goods or a service to another party (consumer) in exchange for money. Contracts are governed under the Trade Practices Amendment (Australian Consumer Law) Act 2010 (Cwlth). The terms of a contract include express terms and implied terms. Implied terms are terms which apply automatically to any contract and don’t have to be stated within the contract. Implied terms include the requirement that the goods supplied: are of acceptable quality, are fit for the purpose of their use, and correspond to any sample shown by the supplier. Implied terms are effective as they can’t be removed and protect an individual and therefore protect society as a whole. However, in rare cases they can be ineffective as they can be hard to identify. The effectiveness of implied terms is shown in “Submission by CHOICE to the Inquiry into unfair terms in consumer contracts” (Choice, 2010)

Exclusion causes are used by a business to limit their liability. A business must draw an exclusion cause to the attention of a consumer, if this is not done or has been done after a contract has not been formed it will not be operative, (Thorton v Shoe Lane Parking Ltd 1971). Some businesses use exclusion causes to take away the implied terms of a contract, this will not be allowed in court as seen in (Curtis v Chemical Cleaning and dyeing Co. 1951). Exclusion causes are effective as they make the trader more liable for goods or services through remedies such as damages or rescission. This is in accordance with morals and ethics of society and thus highlights the effectiveness of consumer law. “Model consumer submission in response to productivity commission draft report on Australia’s consumer policy framework” (Choice 2008) shows the use of exclusion clauses.

Unjust contracts are contracts which involve misrepresentation, duress, undue influence, and unconsciable conduct. Misrepresentation is seen in Hedley Byrne and Co. Ltd v. Heller and Partners Ltd (1964). Duress can be seen in Barton v. Armstrong (1976). Unconsciable conduct can include taking advantage of non English speaking people and intoxicated people as seen in both CBA v. Amadio (1983) and Blomley v. Ryan (1956). These are protected by common law. They are extremely effective in protecting vulnerable consumers levelling the balance of power in all circumstances. Statutory protection regarding unjust contracts include the Minors (property and contracts) Act 1970 (NSW). This restricts the enforcement of certain contracts against minors; contracts entered into by minors will not be enforced unless the contract is for their benefit. Minors and contracts are shown in the report “Consumer Contracts” (SMH, 2010). The Contracts Review Act 1980 (NSW) is the law judges look at to see if a contract is unjust. This allows for remedies such as a contract being rescinded. The ACL allows for a 10 day cooling off period after buying something of a salesperson or telemarketer. The Australian Competition and Consumer commission (ACCC) protects customers from unfair contracts and business misconduct as seen in “Consumer watchdog probes carbon price hikes” (ABC, 2012). These laws are extremely effective in protecting consumers as they are in the best interests of society and the consumer, they allow for remedies such as repair, replacement, and refund and also rescission of contracts. As they effectively protect an individual in all cases (including minors and the disabled) they reflect society’s views and balance the power of consumers and businesses.

The tort of negligence is governed by the Competition and Consumer Act 2010 (Cwlth. A tort of negligence is concerned with protection of the individual, their property and economic interests from damage caused by another person’s failure to take a duty of care, shown in Donoghue v. Stevenson (1932). This is effective and helps protect the consumer from faulty products, as it is compulsory for a supplier to have a duty of care towards the customer meaning it is accessible by all consumers and upholds the values of society.

Occupational licensing allows a person to carry out a particular occupation with approval of relevant authorities; this allows a consumer to know the person they are dealing with and their qualifications. Occupational licensing protects consumers from non-licensed traders who may not provide the consumer guarantees as stated in the ACL. There are two types; self regulation and state regulation. Occupational licensing legislation has been ineffective at protecting the rights of the individual. It is the responsibility of the consumer to ensure that tradesmen possess a license and due to the lack of consumer awareness, unlicensed workers service a large proportion of consumers. This could be seen in a Sydney Morning Herald article entitled “Unlicensed tradesmen swamp industry” published on the 9/06/05 where a study indicated that 60% of people did not request to view a license when hiring tradesman and 30% of all trade-related work was done by unlicensed individuals. The failure of occupational licensing in ensuring equality can be seen in the case of Qidwai vs. State 1988.

Marketing and advertising should inform consumers bbut often it misinforms and confuses or is misleading and deceptive. Misleading advertising is shown in ACCC v. Nudie Foods Australia Pty Ltd (2008). The ACL (S 18) protects against misleading and deceptive conduct (includes unintentional). False or misleading representations is covered by ACL (S 29), it covers practices such as: Bait & Switch, pyramid schemes, gifts and prizes, and false testimonials. The ACL (S 48) promotes clarity in pricing. If goods have component prices the price representation must contain the single total price. If a product has multiple price representations is must be sold for the lowest price. These acts ensure that all manufacturers who engage in deceptive advertising practices are faced with penalties of over $50000. This has been an effective deterrent to false marketing and advertising and thus has been effective in the protection of consumer rights. This can be seen in ACCC Annual Report of 2005 which states that attempts at bait advertising and deceptive marketing practices has reduced by over 70% since the act was passed. The annual report also demonstrates that accessibility of the legal system has been effective, as 5552 complaints of false advertising have been lodged (ABS).

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