Business Law Essay Example

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Business Law

24th August, 2016

Question One

When a court of law has to check on how a statute applies to a particular situation and decipher the consequences, then we say that it has done a statutory interpretation of the law. There are various ways through which the statutory interpretation of the law may be done. Just as the word goes, the literal approach captures the interpretation using the text and the exact words which are used. More often than not, there is no use of context to decipher any further meaning of the words since the words are understood as they are. However, Sanson (2012) states that there are cases when the text of the law may not be interpreted directly, hence calling for a different approach. This means that even with the literal approach, the interpretation yields what is seen as out of place or odd. In this instance, the interpretation that can be done is through a purposive approach.

The purposive approach of the law is a little diverse than the literal rule since it is done in lieu of the specific reason, or purpose for that matter, that the said clause was enacted. For instance, when looking at how statutes are enacted by parliament in Australia, one has to investigate the causes of the legislators to come up with the law. The context is just as important as the purpose here so that after coming up with the interpretation of the statute, then the court has to place it within the context, or say, the intention behind the legislation. Even with this manner of interpretation, Barak (2007) places great importance in being able to have a uniform interpretation of the law so that ambiguity does not fester. In doing so, he posits that objective that a statute intends to achieve must be looked into so at to make a fair judgment and appear more resolute.

The two approaches to interpreting statutes are taken more seriously in Australia since after the parliament is involved in coming up with statutes by itself or through appointed commissions, then the judiciary has to do a lot of legal analysis before confirming that actually, the rules may be allowed to work as written. Further, they may be amended or returned to the body that formed them for proper changes before they can be enacted. This means that either way, the two approaches go through a scrutiny and have to remain transparent and with very little room to wiggle due to ambiguity.

Question Two

The purposive rule or what is identified as the mischief rule is the most important rule when interpreting the term “misleading or deceptive conduct” under Section 18 of the Australian Law. The golden rule may apply too since it requires more than mere translation of text when interpreting the law. The purposive rule is more important here since according to Vines (2013), the law may contain areas that fester with ambiguity as to allow either parties in a case to hide some facts in explanations. These would always be taken as misleading to those interpreting the law, as they may give a leeway to break the law due to some form of ambiguity. For instance, when advertisers place misleading information in their advertisements that is meant to hoodwink the market, then the law is purposefully meant to smoke out this practice and reveal the advertiser’s actions.

A great example would suffice in the manner of a mobile phone contract that binds you to using the product from the company without expressly mentioning that your location may not be covered by good network. This means that the company has not revealed everything about the usage of their product in your location. As such, they may be liable to a great extent for offering insufficient information. The use of extrinsic materials is sometimes quite critical in order to provide a clear interpretation of statutes. For instance, when trying to prove that the mobile contract may not have expressly stated that the said location did not have proper coverage for the service provider, then the contract itself may be given as evidence that actually, the service provider did not state in their contract that a particular area does not have sufficient coverage, if any.

Question Three

Bunavit Pty Ltd – Harvey Norman franchisee

  1. The accused made misleading presentations concerning consumer rights to franchisees. This misleading presentations regarded guarantees that, according to Bunavit Pty, could only be met by the manufacturer of the products. This expressly means that Bunavit was not really obligated to provide any form of assistance to the franchisees and therefore, the matter should have been pursued with the manufacturer instead of Bunavit.

  2. Generally speaking, the court considered that Bunavit Pty is first and foremost responsible for enforcing guarantees from manufacturers by acting as the medium through which the defects on products can be communicated with the manufacturer. Secondly, the guarantees offered by manufacturers cover the period of guarantee, and are enforceable for some time even after this period elapses. Even more ascertaining of this fact is that guarantees should guarantee that the products are void of defects as confirmed by Arai (2013). Further, guarantees cannot be voided by any terms and conditions of sale stated by Bunavit Pty. Harvey Norman Franchisees were also ordered to pay fines because they misrepresented facts about their consumer guarantee rights. This to a great extent affected the manner in which Bunavit Pty Conducted its business since more than five consumers complained about the products and were treated to the same misinformation.

  3. Without a doubt, the court found the conduct to be very misleading since there is a lot of deception involved. And for this reason, Bunavit Pty was ordered to pay penalties for this misleading conduct. First off, the court found the company guilty of extorting the customers by asking that they fund the repair of products purchased from Bunavit Pty. This, despite the fact that the company is supposed to look into ways through which the customer’s grievances can be addressed by the manufacturer. Even more surprising was the fact that the company was intentionally excluding itself from the defects in these products, yet the guarantee is supposed to offer a solid confirmation that, indeed, the product is up to standard, and it is only when the customer finds anything defective that they should contact the company for further action meant to remedy the situation (Ammar, p. 179, 2011). In all accounts, Bunavit Pty was found guilty, therefore, behaved in a misleading manner or conduct.

It goes without saying that Bunavit Pty wanted to levy an extra charge for the product on consumers. This in itself goes against the Australian Consumer Law that guarantees consumers of the effect warranties have on products. As stated above, guarantees are supposed to cover repairs that will not be levied on the customer.

Question Four

I agree with the term that the court gave the conduct. This is backed by the actions of the company. In Australian Consumer Law, the consumer is protected from business malpractices, and this includes the exclusion of important information at the onset of a business transaction. Usually, consumers are supposed to be made aware of what they are committing themselves to before they get to purchase a product. The Section 18 of the Consumer Laws ensure that customers enjoy fully all that is explicitly stated as their rights. For instance, they have a right to certain actions after they agree to purchase a product that is under guarantee. This means that should they choose to purchase these said products, then they will as well be accorded the rights that come with having your product covered by guarantees. Some of these rights have been explicitly stated above, but concerning the Bunavit Pty case, they can be stated as below:

  • A customer must be guaranteed that a product meets the necessary qualities as stated by the manufacturer

  • If the product becomes defective during use and within the period of guarantee, then the customer can go back to the distributor and ask that the product be repaired, or that they be given a replacement. This comes at no extra charge since the product is covered by a guarantee.

  • Sometimes if the goods do not meet standards, consumers should be refunded. They are entitled to this at no extra cost and should be made without asking anything of them. Proof of purchase is needed though.

In all, Bunavit Pty erred in committing these acts of peddling falsehoods about their role in handling cases of goods sold on guarantee. Therefore, it is important to note that Paton and Bleuel (2000) are right when they state that some form of after sales service like repairs on guarantees are rights customers should be accorded, and any sensible business would not mess with it.


Ammar, J., 2011. Think Consumer: The Enforcement of the Trade Mark Quality Guarantee Revisited, A Legal and Economic Analysis. Cambridge Scholars Publishing.

Arai, K. (2013). Note on the need for rules on misleading representation based on experimental evidence. Applied Economics Letters, 20(1), 10-17.

Barak, A., 2007. Purposive interpretation in law. Princeton University Press.

Sanson, M., 2012. Statutory Interpretation. Oxford University Press.

Patton, J.D. and Bleuel, W.H., 2000. After the sale: how to manage product service for customer satisfaction and profit. Solomon Press.

Vines, P., 2013. Law and Justice in Australia: Foundations of the legal system. Oxford University Press.