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CASE STUDY: Read the following facts and answer the questions below.
Roberta is a student at USC studying a double degree in Business and Arts. She is studying Spanish with the School of Arts and Social Sciences and recently enrolled in a Tango dance class with her boyfriend, George. She needed dance shoes. Roberta loves shopping and headed for the Plaza and Myers (trading as Myers Stores Ltd). In ‘Miss Shop’ she found some black shoes that looked suitable. She spoke to the sales assistant saying: “I want these shoes for my Tango dancing lessons. They need to be strong. Do you think they will be suitable?” “Oh yes” said the assistant “They are made in Spain and must be OK for Tango dancing.” With that assurance Roberta bought the shoes, which were on sale reduced from $100.00 to $60.00. She went on to do some browsing around the store. It was coming up to Mother’s Day and she was looking for something special for her mother. Her Mum loves pasta, so when she saw a pasta maker in the home wares section on special for $80.00, she bought one. The sales assistant went out the back to the storeroom and got one still in its box. She placed the box unopened in a bag and gave to Roberta. Roberta’s boyfriend, George, was about to have a birthday and so she looked about for a present for him. She saw a old fashioned styled record turntable on special and knowing that George likes playing vinyl records, bought it for $250.00, the price being reduced from $350.00. The next Saturday while at dance class the heel of one shoe broke off as she attempted a heel step. Luckily she didn’t fall over and hurt herself. The next day was Mother’s day. Roberta’s Mother was excited when opening her present to see the label ‘pasta maker’ on the box. But she was disappointed when
she opened the box and found it was a popcorn maker. Sunday was also George’s birthday and he was very happy with the turntable. Unfortunately when he used it the needle on the arm of the turntable scratched one of his favourite records. He told Roberta that he can’t risk using it again. Roberta went back to Myers to return the shoes, the pasta maker and the turntable. The store manager drew her attention to a statement on each of her receipts, which said:
“No Refund or Exchange will be given for items on sale or on special.”
Roberta is very unhappy and comes to you for advice.
With reference to the Australian Consumer Law, answer the following questions in relation to each transaction between Roberta and Myers Stores Ltd:
1. Does the transaction fall within the operation of the Australian Consumer Law (‘ACL’)?
2. What implied guarantee/s could Roberta argue have been breached by Myers Stores Ltd?
3. What remedies, if any, could Roberta claim in relation to any breaches of the ACL?
4. Does the statement on each of Roberta’s receipts for the purchases have any legal effect, and if so, what is the effect?
Roberta is a student at USC studying a double degree in Business and Arts. She is studying Spanish with the School of Arts and Social Sciences and recently enrolled in a Tango dance class with her boyfriend, George. She needed dance shoes. Roberta loves shopping and headed for the Plaza and Myers (trading as Myers Stores Ltd). In ‘Miss Shop’ she found some black shoes that looked suitable. She spoke to the sales assistant saying: “I want these shoes for my Tango dancing lessons. They need to be strong. Do you think they will be suitable?” “Oh yes” said the assistant “They are made in Spain and must be OK for Tango dancing.” With that assurance Roberta bought the shoes, which were on sale reduced from $100.00 to $60.00. She went on to do some browsing around the store. It was coming up to Mother’s Day and she was looking for something special for her mother. Her Mum loves pasta, so when she saw a pasta maker in the home wares section on special for $80.00, she bought one. The sales assistant went out the back to the storeroom and got one still in its box. She placed the box unopened in a bag and gave to Roberta. Roberta’s boyfriend, George, was about to have a birthday and so she looked about for a present for him. She saw a old fashioned styled record turntable on special and knowing that George likes playing vinyl records, bought it for $250.00, the price being reduced from $350.00. The next Saturday while at dance class the heel of one shoe broke off as she attempted a heel step. Luckily she didn’t fall over and hurt herself. The next day was Mother’s day. Roberta’s Mother was excited when opening her present to see the label ‘pasta maker’ on the box. But she was disappointed when
she opened the box and found it was a popcorn maker. Sunday was also George’s birthday and he was very happy with the turntable. Unfortunately when he used it the needle on the arm of the turntable scratched one of his favourite records. He told Roberta that he can’t risk using it again. Roberta went back to Myers to return the shoes, the pasta maker and the turntable. The store manager drew her attention to a statement on each of her receipts, which said:
“No Refund or Exchange will be given for items on sale or on special.”
Roberta is very unhappy and comes to you for advice.
With reference to the Australian Consumer Law, answer the following questions in relation to each transaction between Roberta and Myers Stores Ltd:
1. Does the transaction fall within the operation of the Australian Consumer Law (‘ACL’)?
2. What implied guarantee/s could Roberta argue have been breached by Myers Stores Ltd?
3. What remedies, if any, could Roberta claim in relation to any breaches of the ACL?
4. Does the statement on each of Roberta’s receipts for the purchases have any legal effect, and if so, what is the effect?
Facts of the case and Issues
R purchased a black shoe for herself, a pasta maker for her mother, and a vinyl record turntable for her boyfriend, G from a store M. The heel of the shoe she purchased, was broken on the very first use, the pasta maker turned out to be a popcorn maker, and G scratched a record using the turntable, R purchased for him. When R tried to return all the three items, the shop assistant showed her policy.
So, the issues are that, whether, the transactions so done R fall within the scope of Australian Consumer Law.
2ndly, whether any implied guarantee was breached by the Store M.
3rdly, whether any remedies are available to R
4thly, whether, receipts of purchases have any legal effect.
So, the issues are that, whether, the transactions so done R fall within the scope of Australian Consumer Law.
2ndly, whether any implied guarantee was breached by the Store M.
3rdly, whether any remedies are available to R
4thly, whether, receipts of purchases have any legal effect.
Analysis
To answer the accordingly, about the transactions so done by R fall within the scope of Australian Consumer Law, or not, we have to decide first what is a consumer and who are treated as consumers under the Australian Consumer Law (ACL) (COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law, 2010). Under the ACL, a consumer is one who had acquired her certain products or services which generally priced below, $40,000; again, if some purchases products or services which are for the sole purpose to use in personal or domestic or any other household use or may also be consumption, even if that price crosses the threshold of $40, 0000, then they are also called consumers under the ACL. On the other hand, if a person repurchases some products or services, then will get covered under the above categories of consumers. There are certain other categories, but to answer the questions based on the facts stated above, we will only this category of consumers. So, when it is ascertained that, the R is a consumer and do fall under the scope of the legislation, so based on the legislation R do have the consumer guarantee since she purchased the new products from the shop. In order to establish the consumer guarantee, the product must have the standard and must be of the acceptable quality and must also be fit for the purpose it was purchased, and in so doing the product must match the description as was represented in the labels or in the advertisement, as the case may be, again, the product or service so achieved must have the full title or ownership so, that the purchaser do have the undisturbed possession in using it and products must be clear from any hidden charges. But, in the present facts of the case, the shoes were not of the acceptable quality, since it broke on the very first day, and furthermore, the product was not at all fit for the purpose it was purchased, though the sales person, assured R, that the shoes are perfect for Tango dancing. 2ndly for the purchase of pasta maker, R do qualify for consumer guarantee, since the label do not have the matching description as the product, and the product so purchased was not at all pasta maker, but a popcorn maker. 3rdly for the purchase of the vinyl record turntable, it was also proved to be unfit for the purpose it was purchased for. So, not only her transactions or her purchases are covered by and are within the scope of the (COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law, 2010), but also she qualifies for consumer guarantee as mentioned under and identified by (Australian Competition & Consumer Commission- ACCC).
All the suppliers and the manufacturers along with the retailers or the wholesale traders are under a an obligation to provide guarantees to the customers or the consumers who are availing products from them, in form, it can be in the form of sale or hire purchase, or may also be lease, and this is not expressed guarantee but implied ones and this exists even if there is expressed guarantee or warranty as the case may be from the suppliers and the manufacturers along with the retailers or the wholesale traders. According to ACL, a supplier is one who can be a trader or a retailer and who does the business of selling, leasing, hiring to the consumers. So, according to ACL, the store M, is a supplier and hence is liable to provide R with the implied guarantees. Thus, the store is liable to provide the consumer R, with the product which must have the standard and must be of the acceptable quality and must also be fit for the purpose it was purchased, and in so doing the product must match the description as was represented in the labels or in the advertisement, as the case may be, again, the product or service so achieved must have the full title or ownership so, that the purchaser do have the undisturbed possession in using it and products must be clear from any hidden charges. Court in (Contact Energy Ltd v Jones, 2009), held that acceptable quality must be in terms of the defects which surfaces, along with the price of it and also the fitness purpose, which means that the product must be fit for the sole purpose it was meant. The Courts held the same view in (Kozlowski v AMG Windsor Pty Ltd t/as Windsor Toyota , 2017) and also in other cases like that of (Ingold v Coastal Caravans Pty Ltd , 2016), where the Court specifically held that the consumer guarantee to be of accepted quality was not complied with was further echoed in (Becke v Caravans & Motorhomes Pty Ltd & Jayco Corporation Pty Ltd , 2017).
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Place Your Order The court in (PETER PHILLIP Bennett v Chief Executive Officer of the Australian Customs Service, 2003), held that there is a breached of the implied guarantee so provided by the opposite party. Again, the Court in (Paul Madsen v Agrison Pty Ltd , 2014), also held the respondent liable, when there is delivery of the product to the applicant consumer, in such a condition which was not an acceptable condition, so the respondent was in breach of the guarantee as laid under section 54 of the (COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law, 2010).
The (COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law, 2010), provides the benefits to the consumers with the statutory remedies if a breach of the consumer guarantees happens to take place. But, previously under (Trade Practices Act- Federal Register of Legislation, 1974), the consumers were to prove the breach of claims arising out of contract. But, under the (COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law, 2010), the remedies can be availed, but it will be ascertained on the breach causing the certain nature of failures (Alex Pordage t/as Pattisserie Fe Fi Fo v Chrystal & Co Pty Ltd t/as Caterlink , 2014). So, when the failures are major, then the determining factor will be that, the goods or the products so acquired, would not have been purchased at all, by such reasonable person, if the failures can be detected on face; or the product were substantially unfit, and an instant remedy within a reasonable time was far fetching; the major failure will also occur if the product is in no way having any resemblance with the sample or with the model which is kept for the demonstration purpose; when the supplier denotes that a particular product is for the particular purpose (Campbell Stuart Smith v Family Auto Group Pty Ltd t/as Western Auto Group , 2014), and then that description forwarded by the supplier do not fit the purpose of the buyer, then that is treated as a major failure; the products so supplied if are unsafe and creates the situation which causes unsafe situation, are also considered as major failure. But, a minor failure or the non- major failure are those, which can be easily remedied and which do not fall under the above categories of major failures (Atlantic Caravans Pty Ltd v Armstrong & Hinterland Outdoors Pty Ltd , 2018).
So, it is apparent that a major failure is critical and is far more serious when compared to a non-major failure, and hence the consequences will also be tougher. So, for the breach of a major failure, the defect remains non- remedied, then the consumer can chose to reject the goods so availed and in so doing, must give a notice to the supplier, and if the supplier accepts or the obliges the facts so stated by the consumer, then the supplier must be in the position to allow customer or consumer elect any other products meeting reasonable standards or providing the consumer with the refund. So, going by same logic, the consumer R, have the option to seek refund, replace the product and also elect any other item in lieu of the price already paid. But, for the minor failure, the supplier must be notified in same way as done in major failure, provided that on refusal from the supplier the consumer rejects the goods, furthermore, major or minor failures do not restrain the consumer in seeking the damages from the supplier, provided that the damage was foreseeable by the supplier. As the shop M, contends that, they do not give refunds and neither do they do the exchanges, since the items were on sale, this contention by the shop is utterly illegal, and is totally against law and thus is enforceable by the consumer R (Matthews v Inspirations Furniture Design & Ors , 2016).
Furthermore, the shop is in breach and has done major failures, so R can claim damages as well as can seek refund, or can seek to replace as well and can also reject the products as a whole.
The receipts are the proof of purchase given by the business to the purchaser, if someone purchases products above an amount of $75, which in this present fact of the case is pretty much more than that. As it is a known fact that, the receipts are nothing but itemised account of the transactions so made between the seller and the purchaser, in here between the shop M and the consumer R (Coles Supermarkets Pty Ltd v Bourchdan , 2009). The itemised account depicts the calculation so incorporated in reaching the total amount, furthermore the receipt being the proof of purchase also have the name of the supplier with their registration numbers with various bodies, along with the date on which the product is supplied, and the product itself is also described there along with the price, again the receipt can also be in the form of a tax invoice or a bank card statement and can also be a hand- written receipt. So, it is important to keep the proof of purchase or the receipt, since if the case so arises, and the consumer is to claim the damages or seek a refund, or seek a replacement or alternately seek an new product, then the customer or the consumer must have something to prove that he or she have purchased the products from a particular shop, so as to make them liable and thereby implicating them into the situation is in similar line with the (Baldacchino v Director General, Department of Finance and Services , 2013).
References
Alex Pordage t/as Pattisserie Fe Fi Fo v Chrystal & Co Pty Ltd t/as Caterlink , [2014] NSWCATCD 72 (NSW Civil and Administrative Tribunal 2014).
Atlantic Caravans Pty Ltd v Armstrong & Hinterland Outdoors Pty Ltd , [2018] NSWCATAP 52 (NSW Civil and Administrative Tribunal 2018).
Australian Competition & Consumer Commission- ACCC. (n.d.). Consumer guarantees. Retrieved from https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees
Baldacchino v Director General, Department of Finance and Services , [2013] NSWADT 24 (NSWAdministrative Decisions Tribunal 2013).
Becke v Caravans & Motorhomes Pty Ltd & Jayco Corporation Pty Ltd , [2017] NSWCATCD 62 (Civil and Administrative Tribunal 2017).
Campbell Stuart Smith v Family Auto Group Pty Ltd t/as Western Auto Group , [2014] NSWCATCD 244 (NSW Civil and Administrative Tribunal 2014).
Coles Supermarkets Pty Ltd v Bourchdan , [2009] NSWWCCPD 116 (WORKERS COMPENSATION COMMISSION 2009).
COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law. (2010). COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law. Retrieved from http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/caca2010265/sch2.html
Contact Energy Ltd v Jones, [2009] 2 NZLR 830 (2009).
Ingold v Coastal Caravans Pty Ltd , [2016] NSWCATCD 12 (Civil and Administrative Tribunal 2016).
Kozlowski v AMG Windsor Pty Ltd t/as Windsor Toyota , [2017] NSWCATCD 35 (Civil and Administrative Tribunal 2017).
Matthews v Inspirations Furniture Design & Ors , [2016] QCAT 525 (QCAT 2016).
Paul Madsen v Agrison Pty Ltd , [2014] NSWCATCD 79 (NSW Civil and Administrative Tribunal 2014).
PETER PHILLIP Bennett v Chief Executive Officer of the Australian Customs Service, [2003] FCA 53 (Federal Court of Australia 2003).
Trade Practices Act- Federal Register of Legislation. (1974). Retrieved from https://www.legislation.gov.au/Details/C2004A00109
Atlantic Caravans Pty Ltd v Armstrong & Hinterland Outdoors Pty Ltd , [2018] NSWCATAP 52 (NSW Civil and Administrative Tribunal 2018).
Australian Competition & Consumer Commission- ACCC. (n.d.). Consumer guarantees. Retrieved from https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees
Baldacchino v Director General, Department of Finance and Services , [2013] NSWADT 24 (NSWAdministrative Decisions Tribunal 2013).
Becke v Caravans & Motorhomes Pty Ltd & Jayco Corporation Pty Ltd , [2017] NSWCATCD 62 (Civil and Administrative Tribunal 2017).
Campbell Stuart Smith v Family Auto Group Pty Ltd t/as Western Auto Group , [2014] NSWCATCD 244 (NSW Civil and Administrative Tribunal 2014).
Coles Supermarkets Pty Ltd v Bourchdan , [2009] NSWWCCPD 116 (WORKERS COMPENSATION COMMISSION 2009).
COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law. (2010). COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian Consumer Law. Retrieved from http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/caca2010265/sch2.html
Contact Energy Ltd v Jones, [2009] 2 NZLR 830 (2009).
Ingold v Coastal Caravans Pty Ltd , [2016] NSWCATCD 12 (Civil and Administrative Tribunal 2016).
Kozlowski v AMG Windsor Pty Ltd t/as Windsor Toyota , [2017] NSWCATCD 35 (Civil and Administrative Tribunal 2017).
Matthews v Inspirations Furniture Design & Ors , [2016] QCAT 525 (QCAT 2016).
Paul Madsen v Agrison Pty Ltd , [2014] NSWCATCD 79 (NSW Civil and Administrative Tribunal 2014).
PETER PHILLIP Bennett v Chief Executive Officer of the Australian Customs Service, [2003] FCA 53 (Federal Court of Australia 2003).
Trade Practices Act- Federal Register of Legislation. (1974). Retrieved from https://www.legislation.gov.au/Details/C2004A00109
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