Professor

  • Category:
    Law
  • Document type:
    Essay
  • Level:
    Undergraduate
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Business Law

BUSINESS LAW

Introduction

Consumer law entails the law body that addresses issues that arise from retail of business transactions involving one or more individual. It entails laws established to protect consumers against credit practices and unfair trade entailing dangerous and faulty commodities or dishonest tactics or claims. Both federal and state laws play a crucial role in controlling consumer law. The consumer laws forbid phony advertising, impose safety measures for commodities, and protect consumers. Consumer laws in Australia set put the rights of consumers otherwise referred to as consumer guarantees. These guarantees include rights to refund or replacement, rights to repair and rights to receive compensation for loss and damage of products. Drawing from relevant cases and statutes, this essay explains what are consumer protections, reasons why consumers are protected, the development of the consumer law in Australia and how consumer law operates in Australia. The essay also highlights how consumers can get relief through the court systems and outside courts for violation of consumer rights.

Consumer Protections

Consumer protections entail a variety of measures established to assist and safeguard buyers from dishonest schemes of sellers. These protections entail the steps or measures that require to be taken to protect consumers from the malpractices of business people. Consumer protection can be viewed as consumerism movement. It is principally necessary because business people focus on profit maximisation at the expense of consumers. Consumer protections safeguard the basic rights of consumers that include the rights to satisfaction of fundamental needs, rights to be informed right to choose and rights to safety. In Australia, consumer protections protect consumers from unsafe products, unfair treatment and frauds from businesses. The Australian Competition and Consumer Commission (ACCC) is the national consumer law and competition regulator champion. According to Crawford and Humphery (2010), consumer protections include state and federal laws that direct credit and sales practices that involve consumer commodities. Such statutes and laws forbid and control unconscionable and deceptive sales and advertising practices, credit financing, product quality, leases, debt collection besides other features of consumer dealings. The main objective of consumer protections is to safeguard the rights and interests of consumers. According to Jianu (2015), consumer protection and consumer law are justified based on the need to react to market failure, the degree of information irregularity and the nature of the negotiating procedure. Protecting consumers via the statute is justified because consumers do not conduct themselves sensibly despite being equipped with information. Consumers are protected to a range of business transactions and against inequalities in the market.

Reasons for Protecting Consumers

The main objective of business is to make profits and attain sustainability. However, some businesses attain maximum profitability at the expense of consumers. Jianu (2015) asserts that consumers hold a decisive contribution to a business affirmation and prosperity thereby making them actors that gravitates the whole system of business. Consumers are a natural resource for business development thereby requiring business people to promote techniques aimed at attracting and retaining an extensive consumer base. To maximise profits and attain growth, business can exploit consumers. As a result, consumers need to protected by law. Just because trade is liberalised does not imply that traders can exploit consumers. Instead, consumers must be protected against misleading product or service information, unsafe products and deceptive tactics. For instance, the ACCC v Hewlett-Packard Australia Pty Ltd [2013] FCA 653 is a good case that demonstrates the need for protecting from misleading information (Creek & Sapountsis 2013). Consumer need to be protected in order to attain value for the money they spend. They require protection from adulterated and duplicated commodities and deceptive advertising.

Given that some consumers are ignorant and illiterate, they need protection from crooked business people who might contravene the rights of these consumers. More so, consumers are wide spread unlike the traders and producers who are well organised. The fact that consumers are widespread makes it easier for traders to exploit them, hence the need for consumer protection. Consumers also need protection from malpractices of business people who may present inferior, defective and substandard services and products. Besides harmful and unsafe products, unfair business practices and false advertising, consumers require protection from environmental pollution and monopoly power abuse. Consumer protection also aims at preventing unethical business practices. This is because the contemporary competitive business environment requires business people to adopt strategies that promote sustainability besides helping them attain a competitive advantage. As such, business people may employ unethical business practices aimed at ensuring their survival in business environment. Through consumer protection, consumers are guaranteed safe products and services, and worth of their money. Consumer protection is advantageous to both business people and consumers. Given that consumers are the basis of businesses, it is important to provide them with right quantity, price and quality of products as well as protecting their rights. In Australia, consumers are protected under the Australian Consumer Law.

Historical Development of Consumer Law in Australia

The Australian Consumer Law is the federal law that guides consumer protection and fair-trading. According to Latimer (2015), the Australian Consumer Law (ACL) is the novel national law endorsed by the Council of Australian government and represents all state, territory and federal governments. The ACL replaced approximately nine-hundred provisions in about twenty commonwealth, territory and state laws with a single national consumer law that accords similar rights to all consumers in Australia. The current ACL developed from the Consumer Protection Act of 1969 and Trade Practices Act of 1974. The Trade Practices Act was set to address ideas of unfair trade practices. According to Latimer (2015), the current ACL has overcome the limitations of the 1974 Trade Practices Act linked to 1890s Commonwealth Constitution. As a result, the Consumer Law of Australia developed from the English Law. Following the World War II, massive development in retail chains increased prompting the use of credit and advertisements. This instigated consumer revolution with a wide assortment of services and goods available to consumers. In the course of 1950’s and 1960s, individuals recognised their rights as consumers, and in 1959, Australian Consumer Association was established with the aim of providing increased bargaining power for consumers (Latimer 2012). However, consumers recognised their rights following the enactment of the 1974 Trade Practices Act that offered wide range solutions for consumers that included injunctions and fines. The 1974 Act had considerable impact on practices of business other that any preceding legislation. In 2008, the Council of Australian Government passed a national consumer law as well as the national consumer credit. This followed the commencement of the ACL in 2011, which is enforced and administered, jointly by State and Territory agencies of consumer protection and ACCC.

Operations of consumer’s protection laws operate in Australia

Australian consumers hold akin expectations and protection concerning business conducts. Likewise, businesses operating in Australia hold the same responsibilities and obligations. Consumer protection laws operate through consumer and competition tribunals and agencies. According to Latimer and Pagone (2001), nine different protection systems operate throughout the nation. However, given that each consumer transaction takes place in one place, only two systems that include the one state’s consumer laws and federal competition laws and agencies are involved. The Trade Practices Act of 1974 is the most essential, even though augmented uniformity of applicable lawful standards subsist given than all territories and states have endorsed Fair Trading Acts to promote the pre-existing legislation for consumer protection. The TPA ensures that consumer protections in trade practices legislation hold broadest possible application. Besides the legislative prohibitions on unfair business practices, state, territory and federal agencies provide advice on the formulation of consumer protection legislation and policy. These agencies also advise and receive consumer complaints and assist in settling disagreement linked to the complaints. The consumer protection establishments are referred to as the offices of consumer affairs or bureaus of fair-trading at the territory or state level, and ACCC at the federal level. There is great collaboration amid the state and federal agencies at the institutional level.

Scores of complaints are referred from the ACCC to the state agencies with federal investigations having extensively ceased except where they raise concerns, which could affect consumers in more than one territory or state and entail firms operating countrywide, or advertising, which is undertaken in numerous states or nationally. The ACCC is the country’s peak competition and consumer protection agency. ACCC is a self-governing statutory government power that serves the interests of the public with most of its enforcements carried out under Competition and Consumer ACT 2010 provisions. The ACCC as the federal national consumer agency functions alongside territory and state consumer agencies to enforce and administer ACL. The ASIC (Australian Securities and Investments Commission) enforces the provisions of consumer protections and the court hold the power to punish any disobedience or breach for court contempt. Goldring, Maher, McKeough and Pearson (2009) assert that consumer protections laws are not different from other laws conferring rights and imposing obligations. The rules present abstract principles and compliance generally accepted by members who recognise them. It does not necessary mean that transgression of consumer protection principles would always lead to complete indemnification or vindication of people. The effectiveness of consumer protection laws depend on the extent of recognition by consumers and their lawful representatives of rights that the laws confer and their willingness to put resources in search of claims and attainment of satisfactory results by negotiation or litigation. Since the establishment of the 1974 PTA, Australian traders recognise the principles needed by law and may decide to risk prosecution or litigation by failing to comply with lawfully imposed principles. Consumers are allowed to bring action in the courts for relief under the consumer protection law. Given proper legal presentation, consumer protection laws operate in the interests of consumers to redress the consumer powerlessness.

Seeking Relief through the Court System and Outside the Court System

The consumer protection law implies that consumers hold the power to protect themselves from business malpractices and exploitation. Consumers may pursue lawful remedies if they are dissatisfied with services or products. The laws that protect consumers differ in the remedies they offer to consumers for contravention of consumer rights. In Australia, the ACCC allows consumers to claim for remedy from traders if they are dissatisfied with the purchased products. The remedies available from the traders include refund, replacement, repair or compensation for loss and damages. The dissatisfied consumers can also claim remedy from the importer or manufacturer of the goods directly. The consumer is required to recover costs from the importer or manufacturer and in exceptional cases, seek compensation for loss or damages. Remedies for services include compensation for loss and damages from the service providers and cancellation of services.

Before seeking legal intervention, the consumer should contact the service provider or the seller first and explain his/her concern and the desired outcome. The second step should involve contacting the ACCC or any consumer protection agency and if the problem is not solved, the consumer should take the step of taking legal action. However, the consumer should get legal advice first from a lawyer or legal aid office and based on the amount of alleged damages and the legal counsel, the consumer can bring the case to a court. For instance, in Grant v Australian Knitting Mills Ltd (1936) AC 85 KB, Dr Grant got payment for damages linked to dermatitis that he contracted from wearing the woollen undergarments he had purchases from the Australian Knitting Mills. This is a clear indication that besides alternative conflict resolution, consumers can seek legal remedy to claim damages or loss (Roach 2016). With regard to DR. Grant case, both the manufacturer and the retailer were at fault. The court held that the retailer ought to have brought the right goods of the right make to consumers. Although the retailer was not the manufacturer of the woollen product, the buyers purchased the product in the confidence that the retailer had selected his stock based on the right judgement and skill.

Conclusion

Consumer law entails all the statutes and regulations that seek to establish an equitable balance for purchasers in the market and thwart sellers from engaging in dishonest methods with a consumer being any person who buys services or goods available in the marketplace. A crucial component of consumer law entails consumer protection. Consumer protections include measures and steps that are developed to assist and safeguard buyers from dishonest tactics of sellers. Consumers need to be protected order to attain value for their money as well as from harms linked to defective products. Consumers in Australia are protected through the Australian Consumer Law that developed from the English Law. At the national level, consumers are protected via the ACCC and while other consumer protection establishments protect consumers at territory or state level. With respect to the ACL, consumers hold the power of protecting themselves from business malpractices as well as the power to seek for remedy via the courts or alternative dispute resolutions. Before seeking relief through courts, consumers should first contact the suppliers or the trader sand explain his/her concern. If the problem is not solved, the consumer should contact the ACCC or any other third party and seek legal advice before seeking relief from courts.

Reference List

Crawford, R & Humphery 2010, Consumer Australia: Historical perspectives,UK, Cambridge Scholars Publishing.

Creek, T & Sapountsis, J 2013.’Hewlett-Packard ordered to pay $3 million Civil Penalty for breaching the Australian Consumer Law’, Davies Collision Cave. Accessed from http://www.davies.com.au/ip-news/hewlett-packard-ordered-to-pay-3-million-civil-penalty-for-breaching-the-au [24 May 2016].

Goldring, J, Maher, L, McKeough, J & Pearson, G 1998, Consumer protection law, USA, Federation Press.

Jianu, I 2015, ‘ Sustainability reporting and consumer protection’, Journal of Applied Quantitative Methods, vol.10, no.3, pp.96-111.

Latimer, H & Pagone, N 2001, Introducing the law, AU, CCH Australia Limited.

Latimer, P 2012,Australian business law 2012, AU, CCH Australia Limited.

Roach, L 2016, Card and James’ business law, UK, Oxford University Press.