Business Law
Hypothesis
Over the years, the demand for consumer protection has tremendously increased. This has been prompted by massive businesses malpractices that are abusive and unfair to the consumers. Customers form the most important component of a business entity as they determine its immediate profitability and direct sustainability. Arguably, they form the final component of a business entity making of great essence to ensure stronger interlink and a complete cycle necessary for holistic feedback and effective operations. This has been the case with the Australian businesses practices that have prompted issue of new consumer protection directives[1]. The new obligations have been established amid the current unstable global economies that require careful consideration and effective balance of all production and consumption business pillars. This essay gives a critical evaluation of new obligations in the businesses that are directed at ensuring higher levels of consumer protection in Australia. The analysis is based on a real life case involving Sarah vs Retailer. Comparing the new directives with the previous ones, the essay examines implications to the business community and the consumers with regard to the current global economic status. Arguably, the paper provides a holistic consideration of the fairness derived from the new coterminous directives in the business world.
Discussion
In business, two parties make an agreement, yet each side anticipates something. This something or commonly known as quidpro quo is the consideration for the promise or act. In several contacts, consideration is composed of actual promise to provide good and services for the other party to make payment for such good and services. Before a party considers the principles upon which to estimate losses, it is important to decide the type of losses for compensation. A right description of the damage that Retailer is responsible should precede any form of concern. In this regard, it is better to start at the beginning and reflect on the best action to take. [2]Generally, is not adequate to simply believe that Sarah owed the Retailer duty of care. But, it is important to assess the degree of damage from which Retailer must perform to protect the lives of patients from any chemical damages (Deakin S, Johnston. A and Markesinis. B, 2003).
The question surrounding this case is the type of damage with regard to duty owed. This is a private wrong; therefore the remedy is monetary benefit that should be compensated to patients. Basically, and an omission can be a crime as well as a tort. A crime with victim is also a tort like in this case. Even though, an action or omission is a tort, the proceedings are totally different. A party that causes damages carelessly is liable to prosecution in a court of law (Deakin S, Johnston. A and Markesinis. B, 2003). According to Australian law, there are six elements in the formation of a contract. These elements are intention to create legal relations; legality; genuine consent; consideration; capacity and offer and acceptance[3]. Nevertheless, there are three fundamental elements in the formation of legal contracts including; Offer and acceptance: Existence of legal contracts largely relies on offer and acceptance. In this case, one party makes an offer and the other party accepts in writing, by conduct or verbally. Additionally, the party that accepts the offer is obligated to communicate with the party making the offer to agree. Consideration: When two parties make an agreement, each side anticipates something. This something or commonly known as quidpro quo is the consideration for the promise or act. In several contacts, consideration is composed of actual promise to provide services for the other party to make payment for such services.
Intention to create legal relations; In contract formation, intention to create legal relations purposes at sorting out cases that fail to meet the requirements for courts to take action. [4]This is due to the fact that not all contracts are binding and that could be endorsed by courts. For instance, one party agrees to meet another party at the shopping mall. It is a moral duty for the parties to honor this agreement though it is not a legal obligation to act so (Deakin S, Johnston. A and Markesinis. B, 2003). Indeed there was misrepresentation that was fashioned by the seller. Before purchasing the television, the various special features of the television were explained to Sarah, which convinced her to purchase that particular brand of TV. This is to say, Sarah had the right to the right information, as is the case for consumer law. [5]So the Retailer in this scenario acted malicious and fraudulent at best. To begin with, contract misrepresentation Act safeguards buyers against deceptive claims that induce you into buying something or entering a contract while grants you the leeway to claim recompense in the event of fraudulent misrepresentation. However, Retailers legal means to redress this anomaly is pegged on that fact that the false statement was made deceitfully and or negligently. But since Sarah was innocent and went ahead to believe the Retailer by relying on that statement leading to the purchase of the television worth $1000, is therefore warranted for recompense. In other words, because Sarah entered a binding contract based on fraudulent misrepresentation, then he is under obligation to cancel the contract and claim damages (Deakin S, Johnston. A and Markesinis. B, 2003). In law, a fraudulent claim is based on a misrepresentation of tangible fact, yet pure expressions of judgment or future forecast are not actionable. And yet, assertions made by Retailer qualify to be actionable because it has the foreknowledge of what is likely to happen in future. In addition, Retailer is liable for prosecution because the judgement was best on past facts hence maintaining the fraud. [6]While protecting and guiding the consumer on the best contracts to use in order to avoid major hiccups in their operations, it also acts to promote their participation in the transaction between them and the traders. This is affected through their consideration and consultations in case of minor or major alterations in the products they had ordered. To add to that, the directive also gave a ‘grey list’ which contains contracts terms that are considered as harmful unless the trader can prove other wise. Besides, the traders are required to consider consumers input by fully informing and giving them time to respond. Unfair contract terms directives have strongly assisted the consumers to identify the traders who are out to exploit them and therefore avoid their products and services. This is a reasonable consideration as traders are given the methods to avoid with a view to winning customer loyalty (Deakin S, Johnston. A and Markesinis. B, 2003).
Unfair contract terms: Due to strong pressure to ensure businesses are running at a profit, traders have previously been tempted to alter different information on the contracts without the consumer’s knowledge. As a result, the directive seeks to check this malpractice by creating a new ‘black list’ which contains which contains various contract terms that are prohibited through out the European Market. This is of great importance as it prevents the traders from altering different. Pre-contractual information: According to Australian law, it is the responsibility of the trader or retailer in this case to present the consumer with all the information that is necessary for the consumer to make the correct choices. Though the previous rules on unfair contract terms increased the ability to ensure enough information for the consumers, it had major omissions that made it easy for the traders to misguide consumers on important information. The ability of traders to build the correct goodwill for their products from the customers is guaranteed by the quality of the products they offer to them. [7]Australian statutes governing the consumerism demands the revelation of full characteristics regarding different products and services offered to the consumers by the trader. Therefore, this is a major platform for ensuring effective ability to consider the best quality regarding different goods and services offered to the consumers. According to law of contract, deceitful information regarding products sold is a criminal offence and the Retailer in this scenario has tow options, to recompense the client of face prosecution, for providing wrong information that led to wrong choices by the consumers (Deakin S, Johnston. A and Markesinis. B, 2003). Australian Consumer law warrants for the disclosure of the right information to minimize the confusion and unfairness to the consumers during or after delivery of the goods, the traders are required to clearly state all the accruing costs related to freight and postal charges. Failure to give the right information resulting into uncalled for damages amounts to breach of contract. Much as the consumer has the right to know and compare things to do with prices, and be able to make an informed choice about a given product on the basis of their ability and will, the consumers are able to adequately plan and manage their finances with ease.
Delivery rules and passing of risks to the consumers: To gather more consumer confidence in the business world, the new directives require the traders to ensure better terms of services and products delivery to the consumers. Previously, the rules never gave specific guidelines for delivery thereby making the consumers to be prone to subsequent deterioration of the products quality during the same period. Besides, it was extremely oppressive as damages and other incumbent costs were forwarded to the consumers raising the initially stated costs of the commodities. Under the Australian consumer law, the trader is supposed to ensure delivery is affected within 30 days from the date of signing the contract with the consumer. Strongly considering the necessity of goods utility, the consumers have the right to refuse the goods and get the refunds within 7 days from the date of delivery (Deakin S, Johnston. A and Markesinis. B, 2003).
To add to that, the traders are currently expected to bear the risks and costs of quality deterioration for the goods during transit. Arguably, it is considered to be unethical to make the consumers bear the risk of goods they had not even received. [8]Over the last decade, global consumers have become more cautious on different systems of delivery which has been contributing to vast dynamism in the delivery systems especially in Australian and New Zealand. [9]About 30% of consumers prefer to do their shopping from different traders after initial mistrust for the initial trader. However, this trend has been difficult to realize due to the ever rising demand and replacement with new customers. This operation is however highly unsustainable for these businesses as they may lose all consumers with time (Deakin S, Johnston. A and Markesinis. B, 2003).
Whereas traders have strongly indicated their dissatisfaction with this directive, it is clear that their claims have a paucity of good motives towards the consumers. [10]Referring to their demands as part of the major misdemeanors towards the business fraternity, human rights and individual governments in the region insists that traders must reduce their hypocritical shenanigans which are negatively tainting the region. This is a relatively fair demand for the traders in that they are free to adjust the prices to cove all the possible expenses provided they adequately inform the consumers before the contract are signed. [11]Similarly, the consumer is strongly protected from unnecessary exploitation while enlarging his realm of choices for the services and products from the traders.
In conclusion, the demand for consumer protection over the years has increased with the overall understanding that traders cannot operate effectively in the presence of highly abused consumers. Considering that the previous guidelines and rules had partially failed to secure a harmonic operation of on-line business, the directives will assist in restoring sanctity in the fast dynamic field.
Cognizant of customer importance in any business operation, it is clear that their satisfaction is of great essence. Total disclosure of information regarding the trader and the products being transacted is important for better decision making by the consumer as the final determinant of the performance of the business. Understanding the fact that it is the consumers who are mostly abused in business operations as they have limited choices of altering the concealed contracts, the new contract terms will surface the unscrupulous dealers whose main aim is to harm the consumers.
It is clear that the main aim of these directives is to empower the consumer by recognizing his rights while trying to enhance the value of their payment. It is therefore rightful to allow and legalize their denial of faulty products or provision of the wrong products contrary to what they had ordered.
References
ARMSTRONG Mark, VICKERS John. (2012). ”Consumer protection and contingent charges” in Journal of economic literature, v. 50, n. 2, June 2012, p. 477-493.
BALDWIN Robert et al. (2012).Understanding regulation: theory, strategy, and practice. Oxford: Oxford University Press.
Bar-Gill, Oren and Ben-Shahar, Omri (2010) Regulatory Techniques in Consumer Protection: A Critique of Australian Consumer Contract Law Common Market Law Review, Vol. 50, p. 109
Best, Arthur, and David W. Barnes. 2003. Basic Tort Law: Cases, Statutes, and Problems. New York: Aspen.
Deakin S, Johnston. A and Markesinis. B (2003) Tort Law; 5th Ed. Oxford University Press
Geraint G. Howells, Stephen Weatherill (2005) consumer protection law. Ashgate Publishing, Ltd.
HODGES Christopher et al. (2012). . ”Consumer-to-business dispute resolution: the power of CADR” in ERA-Forum: scripta iuris europaei, v. 13, n. 2, August 2012, p. 199-225.
INDERST Roman, OTTAVIANI Marco. (2012)”Financial advice” in Journal of economic literature, v. 50, n. 2, p. 494-512
Peter A. Alces (2011). A Theory of Contract Law: Empirical Insights and Moral Psychology Published to Oxford Scholarship Online.
Shapo, Marshall S. 2003. Principles of Tort Law. 2d ed. St. Paul, Minn.: West.
[1] J Deakin and B, Markesinis. Tort Law: 5th Ed. Oxford University Press. 2003
[2] J Deakin and B, Markesinis. Tort Law: 5th Ed. Oxford University Press. 2003
[3] A, Best and B, David. Basic Tort Law: Cases, Statutes and Problems. New York. Aspen 2003
[4] M, Shapo. Principles of Tort Law. 2d ed. St. Paul, Minn: West 2003
[5] O, Bar-Gill and O Ben-Shahar. Regulatory Techniques in Consumer Protection: A Critique of Australian Consumer Contract Law Common Market Law Review, Vol. 50, p. 109. 2010
[6] A, Peter. A. Theory of Contract Law: Empirical Insights and Moral Psychology Published to Oxford Scholarship Online. 2011
[7] H, Geraint, W Stephen. Consumer Protection Law. Ashgate Publishing, Ltd. 2005
[8] M, Armstrong and J Vickers. ”Consumer protection and contingent charges” in Journal of economic literature, v. 50, n. 2, June 2012
[9] B. Robert et al. Understanding regulation: theory, strategy, and practice.Oxford: Oxford University Press. 2012
[10] H, Christopher et al.”Consumer-to-business dispute resolution: the power of CADR” in ERA-Forum: scripta iuris europaei, v. 13, n. 2, August 2012
[11] R, Inderst and M, Ottaviani. ”Financial advice” in Journal of economic literature, v. 50, n. 2, p. 494-512. 2012
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