CHAPTER 10
Option 1: Consumers
REVIEW 10.1
1 Identify some of the risks to consumers in a laissez-faire economy.
A laissez-faire economy is an economic system in which the state refrains from
interfering in markets by regulation or other means. Some issues students could
discuss in relation to a laissez-faire economy include:
 suppliers would have less incentive to ensure the quality of their product once a
sale is made
 the market may become less competitive, and some suppliers may dominate the
market to the disadvantage of consumers, or act together to keep prices higher
than they ought to be
 suppliers might be tempted to engage in dishonest or misleading conduct, and
consumers would have no protection from this
 suppliers could use aggressive or exploitative tactics against more vulnerable or
less well-informed consumers
 suppliers would not be forced to make amends if something went wrong.
2 Explain why acceptance of caveat emptor may not provide sufficient
protection to consumers.
Caveat emptor is a Latin term meaning ‘let the buyer beware’, and implies that
consumers should use their own care to protect themselves against exploitation,
without responsibility for the seller. Some issues students could discuss include:
 consumers would have to rely on their own product knowledge, despite, for
example, the modern complexities of the manufacturing and supply chain, the
material or chemical make-up of products, or complex levels of technology
 consumers may have no assurance that the product is safe, fit for purpose, of
proper origin, or that it functions as promised
 consumers would not have access to remedies if something went wrong.
3 Contrast the markets of medieval Europe with those of 21st-century
Australia.
Historically, there was little recognised need for consumer law. Pre-industrial
markets were typically smaller, and vendors and buyers often knew each other.
The typical marketplace offered a small range of products and the consumer did
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not need sophisticated knowledge of the products. The lack of product packaging
also meant goods could be inspected more closely.
During the Industrial Revolution, however, the need began to develop for a
system of consumer protection. Manufacturers and sellers were often wealthy,
well-educated industrialists in large organisations, and buyers were often poor,
uneducated workers with little bargaining power. The range of available
manufactured products grew exponentially, and today consumers are faced with a
wide and highly complex range of products, services and technologies. A highly
specialised level of product knowledge is required in the marketplace of the
twenty-first century, and this frequently requires consumers to rely upon the
expertise of suppliers (e.g. shop assistants, mortgage brokers or financial
advisors).
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REVIEW 10.2
1 Identify the ways in which the law protects consumers.
Students could mention any of the following means:
 educating the public to make them aware of their rights
 articulating and mandating standards for the quality of goods and services,
promoting transparency and accountability in manufacturing and services
 providing statutory and common law remedies for consumers
 implementing weights and measures laws, providing consumers with reliable
benchmarks of quality and quantity
 ensuring that various occupations are licensed
 protecting consumers in a time of global advertising, mass marketing and ecommerce.
2 Identify and distinguish the parties to a contractual agreement.
A contractual agreement requires an offeror, who is the person making an offer of
a contract, and an offeree, who is the person to whom the offer of a contract is
made.
3 Compare oral and written contracts.
A contract can be concluded in writing, orally or with a mixture of both. Written
contracts are usually preferred because they are more precise, more clearly
identify the core terms (e.g. parties, product, price), and have terms that are
clear for both parties to agree to. There is much less room for misinterpretation or
for a party to claim that they were unaware of or did not agree to the terms.
Oral contracts, on the other hand, will usually need to rely on the good faith of
the parties. They may be very difficult to prove if they come under dispute, as
terms may have been unclear or cannot be properly remembered, and the parties’
conduct and statements made during negotiations will need to be taken into
account in order to determine their true understanding.
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REVIEW 10.3
1 Distinguish between conditions and warranties.
The terms of a contract can be separated into two broad categories: conditions
and warranties. A condition refers to a term of fundamental and essential
importance; if a condition is breached by one party, the other party will be
entitled to end the contract. A warranty, on the other hand, is a term of a
contract whose breach entitles the aggrieved party to sue for damages, but not to
end the contract.
One example might be a contract for sale of a car, where the supplier delivers
the car of the right make, model or price, but includes, for example the wrong
sound system or some different features. The buyer will likely be able to sue for
damages or require the defect to be remedied, but will not be able to terminate
the contract.
2 Explain how a court would determine whether the parties to a contract were
in agreement about the obligations contained in its terms. Give examples.
A court would need to ensure all the elements to a contract exist. If all the
elements to a contract are present, the contract will be legally binding. Students
could discuss the elements to a contract, including:
 the parties’ intention to create a binding contract
 an offer by one party
 acceptance of that offer by the other party
 consideration from the promisee
 capacity to contract
 the contract cannot be an illegal contract
 the contract is, if required, in the prescribed form
 the contract is not void due to considerations like duress or undue influence.
Regarding the precise terms, if the contract is written, the terms and obligations
are likely to be considered enforceable because they have been expressly agreed
to, representing the parties’ consensus ad idem. However, in some instances,
particularly in the case of oral contracts, or contracts that are in both oral and
written form, the court will have regard to the words and behaviour of the parties
to determine what they agreed to.
3 Distinguish between express and implied terms.
Contracts contain both express and implied terms to protect consumers. Express
terms are contractual terms that are either spoken or written into a contract and
are agreed to by both parties. They clearly set out the legal rights of both parties.
Implied terms, on the other hand, are contractual terms that have not been
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expressly stated, but which the courts are willing to or required by statute to
enforce.
4 Explain why contractual terms may be implied in certain types of contracts.
Discuss, in the context of consumer law.
Statute law and the common law imply certain terms into some types of contracts.
This is because the Australian legislature and judiciary operate on the principle
that certain minimum standards must be upheld when persons enter contractual
agreements, even where these standards are not stated expressly.
In consumer law, for example, there is an implied term that goods are of a
merchantable quality — when a consumer makes a purchase, there is the
expectation that the goods will be fit for the purpose for which they are
advertised. Implied terms allow the parties to perform their tasks both efficiently
and fairly. They also ensure that consumers are protected from imbalances of
power in the bargaining process with suppliers. They add another layer of
consumer protection because they ensure that individuals who enter contracts
hurriedly, without due consideration, are spared the expense of costly litigation in
order to attain an equitable remedy.
5 Discuss the consequences of a person breaching a contract. Contrast the
breach of a condition and the breach of a warranty, and explain how the
remedies would differ.
Once a contract is made, legal obligations and rights flow from it. Consequently, if
one party to a contract fails to perform their side of the bargain (that is, if they
breach the contract), contract law recognises that a duty exists, and provides a
remedy. A contract condition is considered an essential term of a contract, and so
failure to meet the obligation gives the other party the option to terminate the
contract and to seek damages. A warranty, on the other hand, only gives the
aggrieved party the option to seek damages or rectification of the breach, but
does not allow termination of the contract.
6 Assess the use of exclusion clauses. Provide two examples of contracts that
might employ exclusion clauses, and justify their use.
Exclusion clauses limit a party’s liability for conduct that would otherwise breach
the contract or cause harm, limiting the other party’s right to claim damages. For
example, when a motorist parks in a car park, the terms of the contract usually
exclude the car park owner from liability for any damage to the car or its contents
while it is parked on their premises. Other examples include an airline ticket that
guarantees a flight, but not necessarily on the stipulated date, or housing
insurance that will not cover ‘acts of God’ or terrorism.
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REVIEW 10.4
1 Define unconscionable conduct and list some of the forms it can take during
negotiations for a contract.
Unconscionable conduct refers to the situation where one party exploits the
vulnerability of another party to a contract. The victim may have been impaired by
some external factor (e.g. age, disability, lack of education), or he or she may
have been deceived or threatened by the stronger party. For example, if someone
is induced to enter a contract by the other person’s misleading statements or
greater bargaining strength, he or she can seek to have the court set it aside.
2 Explain the remedies available for unconscionable conduct and when each
may be used.
If unconscionable conduct is proved by one party to a contract, the other party
will be entitled to obtain relief and can have the contract rescinded. The law may
also imply terms requiring parties to do what is necessary to enable the
performance of the contract. In some cases, courts may ask whether the parties
would have expressly agreed to the term if they had considered the issue when
entering their contract. In other cases, ‘standard’ terms may be implied without
the need for inquiry into the actual intent of the parties.
3 Justify the use of implied terms in a contract. Provide three to five
hypothetical examples of circumstances in which a court might imply standard
terms, and support your examples with actual cases in which the court did
imply terms.
Statute law and the common law imply certain terms into some types of contracts.
This is because the Australian legislature and judiciary of Australia operate on the
principle that certain minimum standards must be upheld when persons enter
contractual agreements, even where these standards are not stated expressly.
Student examples will differ, but could draw from some of the following cases
discussed in the textbook:
 undue influence, e.g. Johnson v Buttress (1936) 56 CLR 113
 a contract for professional services must be performed with reasonable care,
e.g. Astley v Austrust (1999) 161 ALR 155
 duress or coercion, e.g. Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd
(1991) 22 NSWLR 298
 merchantable quality, e.g. Australian Knitting Mills Ltd v Grant (1933) 50 CLR
387
 fit for purpose, e.g. G H Myers & Co v Brent Cross Service Co (1934) 1 KB 46
 a product must match its advertised description, e.g. Beale v Taylor (1967) 1
WLR 1193
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 deceptive or misleading marketing behaviour, e.g. Qanstruct Pty Ltd v
Bongiorno Ltd (1993) 113 ALR 667.
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REVIEW 10.5
1 List the different avenues by which a consumer may seek relief for damage or
loss caused by defective goods.
Students should refer to the following:
 a consumer may be entitled to bring an action under the relevant federal or
state legislation
 a consumer may have a cause of action for breach of contract
 a consumer may be able to bring an action in negligence.
2 Explain how federal and state governments ensure product safety.
In Australia, governments seek to keep unsafe products from the market and
inform consumers about product safety, by trying to ensure that:
 unsafe products that reach the market are readily detected and reported
 there is effective and timely removal of unsafe products from the market
 compulsory product recall occurs if required
 compensation is available to consumers who purchase unsafe products
 breaches of consumer protection laws attract sanctions.
3 Distinguish between ‘deceptive or misleading conduct’ and ‘false or
misleading representations’. Provide examples.
Student examples will differ, but should include the following distinctions.
 Deceptive or misleading conduct — conduct includes doing or refusing to do any
act. Misleading or deceptive conduct includes:
o exaggerated statements about a product
o failure to disclose all relevant information
o possibly silence about a relevant issue
o promises that are not kept and incorrect predictions
o even making a statement that is literally true may nonetheless
constitute misleading or deceptive conduct.
 False or misleading representations — a representation is a statement or
assertion. False representations by suppliers to consumers include providing
false or misleading information about their products or services. This includes,
for example, representations about:
o the quality or value of a product
o whether the goods are new or second-hand
o the product’s place or origin
o demand by other buyers
o the effect of any condition, warranty or guarantee
o the availability of repair facilities or spare parts.
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4 Explain why it is important that advertising and marketing be regulated by
government.
Students could discuss many of the consumer protection issues studied so far in the
chapter, including:
 the need for the law to protect against supplier representations and conduct
that a consumer relies on if they are false, misleading or deceptive
 the need for the protection of consumers’ vulnerability against unscrupulous
suppliers, or against conduct that is unfair and abuses the balance of power
between a supplier and a consumer
 the need to ensure safety of consumer products for the protection of society in
general
 the need to ensure products are fit for the purpose for which they are
advertised, to ensure consumers are able to rely on the claims made by
suppliers without the risk of costly litigation.
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REVIEW 10.6
Read the article on the previous page and answer the following questions:
1 According to the article, what is the ACCC concerned about?
The ACCC is concerned about statements made by property sellers that are
misleading or likely to induce a consumer to purchase a property on false grounds.
It states that silence or failing to reveal important information can be just as
misleading as any other sort of behaviour.
2 Outline the types of penalties that real estate agents can face for misleading
potential buyers if they employ inaccurate or embellished descriptions.
Property sellers who are found to have misled potential buyers through inaccurate
or embellished descriptions face penalties of up to $22 000 for individuals, or
$110 000 for companies.
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REVIEW 10.7
1 Briefly outline the statutory guidelines that regulate advertising.
Students could mention any of the following:
 false or misleading representations
 unconscionable conduct
 offering gifts or prizes
 bait advertising
 referral selling
 pyramid selling
 unsolicited or unordered goods
 coercion.
2 Define cooling-off period. Explain why cooling-off periods are incorporated
into contracts.
A cooling-off period is a period of time that gives a buyer an opportunity to rethink
their decision to enter into a contract of sale. They are incorporated into certain
types of contracts, where the law acknowledges the existence of higher risk and
high-pressure sales tactics that can influence consumers to make purchases they
otherwise would not, which could put the buyer at a disadvantage.
3 Differentiate between the roles of the Advertising Standards Board and the
Advertising Claims Board.
The Advertising Standards Board (ASB) provides a free complaint resolution service
to the public about most forms of advertising and marketing. It can determine
disputes, and also includes an appeal mechanism by which the community and
advertisers can challenge decisions made by the ASB. The issues it can hear include
the use of language, discriminatory portrayal of people, concerns about children,
health and safety, or portrayals of violence, sexuality and nudity.
The Advertising Claims Board also provides a complaint resolution service,
regarding issues of truth, accuracy and legality of advertising. Its primary purpose
is to resolve disputes between competitors through alternative dispute resolution,
rather than through costly litigation.
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REVIEW 10.8
1 Identify some of the problems with industry self-regulation.
Some of the issues that students could mention include:
 the industry may not set high enough standards to adequately protect
consumers
 while in some professions, self-regulation works closely in tandem with legal
requirements, in others the absence of compulsory standards can lead to a lack
of uniformity in matters such as complaints and disciplinary processes
 sometimes there is difficulty for employers in assessing a breach of professional
ethics
 there is often a burden on consumers to inform themselves about the quality of
a professional’s practice.
2 Identify three occupations that are licensed. Explain why it is important for
these occupations to be licensed.
If all individuals in the workforce could be trusted to maintain high standards of
ethical practice, there would be no real need for licensing. The imposition of
licensing and registration is an attempt to guarantee that people employed in
various occupations have attained the requisite skills and perform their roles
honestly. Students could mention any of the following licensed professions as
examples:
 doctors, lawyers, engineers, dentists, architects, veterinarians
 plumbers, electricians, builders, motor mechanics, carpenters, fitters and
turners
 travel agents, car dealers, credit providers, hotels, motels and restaurants.
3 Outline and explain the main reasons why a licence might be revoked.
Some of the main reasons why a professional licence might be revoked include:
 malpractice by the licence holder
 fraudulent, misleading or deceptive behaviour by the licence holder.
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REVIEW 10.9
1 Briefly explain what state and federal government agencies do, with
particular reference to consumer issues.
There are both state and federal agencies that deal with consumer complaints.
Although the specific roles of each of the agencies differ, they generally include:
 educating the public about their rights in the area of consumer law
 providing advice to consumers about negotiating with providers of goods and
services, and assisting them in their negotiations
 advising the government about consumer issues
 investigating serious complaints
 in the event of a breach, applying to the relevant tribunal or court to bring an
action.
2 Explain the purpose of a statutory body and how it is constituted. Give
examples of statutory bodies relating to consumer issues.
Statutory bodies are bodies that are established by state or federal legislation.
They are independent bodies charged with a particular role, structure, powers and
purpose, which is defined by the legislation that created them. Some examples of
statutory bodies in the area of consumer law include the Australian Securities and
Investments Commission and the Australian Consumer and Competition
Commission.
3 Discuss the relationship between competition and regulation of corporations.
Market competition is believed to benefit consumers, businesses and the
community in general, by encouraging rivalry among producers and suppliers of the
goods and services as an incentive to produce and supply goods and services more
efficiently. This can help benefit consumers in, for example, price or quality of
goods or services.
The Australian Consumer and Competition Commission (ACCC) has
responsibility for ensuring that corporations, as well as businesses and individuals,
comply with federal laws on competition and consumer protection. An unregulated
market has a greater likelihood of unscrupulous or unfair conduct, and risks harm
or disadvantage not only to the people providing the labour to businesses, but also
to consumers.
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REVIEW 10.10
1 Briefly explain the different ways that industry organisations attempt to
assist consumers.
There are groups in particular industries that assist consumers by providing
complaint handling and dispute resolution schemes. A form of self-regulation,
these groups can help provide consumer remedies, and can enhance the reputation
of the industry and businesses. One example is the association Master Builders
Australia, which represents businesses in the building and construction industry. It
has a national code of practice which sets out standards binding its members, and
has a complaints mechanism for consumers.
2 Outline the role of the Consumer Trader and Tenancy Tribunal in the
resolution of consumer disputes.
The NSW Consumer, Trader and Tenancy Tribunal is a tribunal that hears disputes
between tenants, landlords, traders and consumers. It hears matters in nine
different divisions, including tenancy, home building, retirement villages, motor
vehicles or general commercial. Parties applying to the tribunal are encouraged to
conciliate, and if this does not succeed, the tribunal can hear the dispute in a less
formal and less expensive manner than court.
3 Discuss the ways in which non-government groups act on behalf of
consumers. Give examples.
There are many non-government groups that represent the interests of consumers.
Some of the varied ways in which these groups attempt to assist consumers are
illustrated by the following organisations:
 Consumer Credit Legal Centre (NSW) Inc. — community legal centre specialising
in issues related to financial services, particularly for economically
disadvantaged people
 Choice — non-profit organisation that researches and campaigns on behalf of
consumers, and provides independent advice on product quality
 Consumers’ Health Forum of Australia — national body representing the
interests of Australian health care consumers
 Not Good Enough — website created to help consumers resolve disputes with
suppliers of goods and services.
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REVIEW 10.11
1 Explain the process of alternative dispute resolution and why it is utilised.
Alternative dispute resolution (ADR) refers to methods like mediation and
conciliation that provide an alternative to traditional court-based litigation. They
provide a less costly and less formal approach to dealing with disputes, and can
assist in a faster resolution beneficial to both parties. For example, in the
mediation process, the mediator acts as a neutral umpire between the aggrieved
consumer and the supplier. Conciliation, on the other hand, allows the neutral
third party to actively facilitate communication between the disputing parties,
with a view to resolution.
2 Explain what a class action is and why it might be initiated.
A class action involves a group of individuals, often a large group, with similar
complaints against a supplier to take action collectively against the supplier.
Where a supplier has allegedly committed a wrong affecting a class of consumers,
class action can offer benefits over individual action because it can significantly
reduce time and cost, help to pool resources, and often achieve a beneficial
outcome for the widest number of complainants.
3 Analyse and argue for or against two of the claims about societal benefits
resulting from consumers’ access to remedies, considering potential
objections.
Some of the claims that students could discuss include:
 the promotion of social equality — argues that consumers are treated similarly
regardless of their educational levels and bargaining power; but products may
still be marketed directly at those differing levels to continue to take advantage
 safety — that dangerous products are not allowed into our markets; but unsafe
products do still enter the market, with some undiscovered or sold on the black
market; too many product standards may also encourage consumers to rely too
heavily on the goods themselves without personal responsibility
 ethical conduct — argues that by requiring suppliers and manufacturers to fulfil
obligations to consumers, expectations of responsible behaviour are reinforced;
could argue that suppliers are still only complying with the minimum standards
of the law, but not greater than that
 international cooperation — theory that in a globalised marketplace, a national
commitment to consumer protection may have consequences for other
countries; could argue that the higher costs of business compliance cause
businesses to reduce costs elsewhere, e.g. by lower priced labour or working
conditions abroad
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 greater choice and quality — that market conditions become more consumerfriendly; could argue that the amount of choice is unnecessary or could make
decisions more difficult for consumers.
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REVIEW 10.12
1 What is credit and why is it a major consumer issue?
Credit is the purchase of goods and services in advance of future payment. It is a
major issue in consumer law because so many individuals in modern society obtain
goods and services by use of a credit card or loans. Lenders have become
increasingly willing to loan to individuals, often beyond their means, and
sometimes under very unfavourable terms for the consumer.
People may have trouble meeting their repayments, and cars, household goods
or even homes are repossessed. Terms may be unfair, there may be inadequate
complaints procedures, or it may be very difficult to seek proper legal redress.
2 Outline the major benefits to Australian consumers resulting from uniform
national credit laws.
The main benefit of the Code is standardisation of the laws across Australia, which
creates less complication and greater certainty for consumers and for suppliers.
Some of the other major benefits include:
 credit obligations and liabilities are transparent and help improve consumer
confidence
 failure to comply with the Code can lead to civil penalties up to $500 000
and/or criminal charges
 a checklist provides business owners with a ‘Plain English’ guide to setting out a
credit contract
 credit agreements between businesses and consumers must be in writing
 credit providers must provide the consumer with a pre-contractual statement
disclosing certain mandatory details about fees and charges, as well as an
information statement explaining the consumer’s rights and obligations.
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REVIEW 10.13
1 Summarise your understanding of the notion of product certification. Explain
how it is advantageous to consumers.
Product certification is the process of providing documented assurance to
consumers that goods or services have passed certain performance and quality
tests before they are marketed. Certification indicates that the product meets
established standards of suitability for specified purposes. Once a good is certified,
it may be endorsed with a certification mark or logo.
Some of the advantages of product certification include:
 a recognised symbol to consumers can assure them of quality and help make
product choice faster and easier
 certification imposes certain minimum standards on suppliers that increase the
quality or safety standards of the product
 certification allows those standards to be continuously revisited and revised,
and uniformly applied
 the process encourages suppliers to meet the higher standards to enjoy the
benefits and recognition of certification, which can be a powerful marketing
tool
 certification can be recognised across domestic and international jurisdictions.
2 Briefly outline the major legal responses to the issue of product safety. How
effective do you think they are?
There are many issues in this section that students could discuss, including:
 product safety standards for use, manufacture, design, product improvement,
quality assurance, or product recall and communication strategies
 mandatory product standards by statute or regulation, including for example
product safety, labelling and design requirements, or prescribed information
standards about risks that must be disclosed to consumers
 product certification requiring performance or quality assurance standards and
minimum safety standards
 provisions of the Competition and Consumer Act 2010 (Cth) (formerly Trade
Practices Act 1974), with Division 1A specifically addressing unsafe products by
mandatory safety and information standards, banning unsafe goods or requiring
public communication procedures
 ACCC has power to survey retailers or investigate allegations of non-complying
goods, obtain court-enforceable undertakings, and/or initiate prosecutions
 NSW Office of Fair Trading also helps educate the public and enforce standards
 despite all this, however, it is still very difficult to ensure that unsafe products
do not enter the market, and although standards are in place, and there are
means to investigate and enforce them, sometimes safety issues are still only
brought to light once a consumer has been injured.
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REVIEW 10.14
1 Evaluate the effectiveness of the legal responses to marketing innovation in
the 21st century. Predict how the law may adapt to the use of the new
technology.
Generally, the legal system responds very well to marketing innovation in the 21st
Century. However, a major area of difficulty is jurisdiction. Australian laws can be
very effective in protecting consumers making purchases from Australian
companies, but it is extremely difficult to regulate marketing of products to
Australian consumers that originate overseas. This is particularly evident in
internet commerce. Greater cooperation will be needed between jurisdictions to
ensure consumers are protected from misleading, fraudulent or criminal activity
across borders, that is increasingly accessible via easy-to-use technologies.
2 Define the term ‘phishing’ and explain why it is a problem.
Phishing is a form of internet fraud where valuable information, like credit card
numbers, user IDs or passwords, are sought by luring users to forged websites that
request their private information. It often relies on false links in emails or on
websites that appear to come from a trusted service used by the consumer, like a
bank or credit card company.
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REVIEW 10.15
1 Outline the ways in which technology has affected consumer protection.
Changes in technology have both positive and negative effects on consumer
protection. Technology is constantly changing the manner of interaction between
consumer and supplier, as well as the types and range of products available. Some
of the major developments that have changed the relationship between consumer
and supplier include the ATM, credit and debit cards, EFTPOS, home telephones
and mobiles, and, perhaps most significantly, the internet.
While technologies have offered enormous benefits to consumers, they have
also introduced new possibilities for abuse or exploitation. In some of these areas,
the law has required reconsideration and amendment to improve standards of
consumer protection. Some examples of these areas include telemarketing, spam,
phishing, electronic contracts or privacy and data protection laws.
2 Evaluate the effectiveness of non-legal responses to the use of technology in
the advertising of goods and services.
Generally, the Australian legal system affords consumers adequate protection
against the misuse of technology where suppliers are located within Australian
borders. For example, the ACCC has powers to enforce compliance domestically,
and the police force has powers to investigate violations where criminal conduct is
involved. The legislature has worked to keep Australian law relatively up to date
with changing technologies to ensure an appropriate balance between flexibility in
the changing market and adequate protection of consumers from exploitation.
However, the law is constantly evolving, and particular issues remain with
respect to prevention and enforcement across different jurisdictions, particularly
concerning internet commerce. Effective future laws and consumer remedies are
likely to become increasingly dependent on the existence of multilateral treaties
and standardisation of measures in place across international boundaries.
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Chapter summary tasks
1 Outline the essential elements of a contract.
Students should outline most of the following elements:
 the parties’ intention to create a binding contract
 an offer by one party
 acceptance of that offer by the other party
 consideration from the promisee
 capacity to contract
 the contract cannot be an illegal contract (e.g. for a criminal act)
 the contract is, if required, in the prescribed form (e.g. in writing)
 the contract is not void due to considerations like duress or undue influence.
2 List three ways a consumer can seek a remedy for injury or loss suffered as a
result of defective goods.
Students could refer to any of the following:
 a consumer may be entitled to bring an action under the relevant federal or
state legislation
 a consumer may have a cause of action for breach of contract
 a consumer may be able bring an action in negligence.
3 List the major statutory provisions that govern marketing and advertising.
The main legislation governing consumer marketing and advertising is the
Competition and Consumer Act 2010 (Cth) (formerly Trade Practices Act 1974).
Students could mention any of the following statutory protections in marketing and
advertising:
 false or misleading representations
 unconscionable conduct
 offering gifts or prizes
 bait advertising
 referral selling
 pyramid selling
 unsolicited or unordered goods
 coercion
 cooling-off periods.
4 Briefly outline the main avenues available to consumers seeking redress.
Although the correct avenue will depend on the issue in question, any of the
following avenues could be discussed:
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






self-help
dealing with the supplier directly
internal complaint mechanisms with the supplier
industry bodies that offer complaint resolution services
industry ombudsman
alternative dispute resolution, like mediation or conciliation
reporting the issue or seeking help from a government consumer complaints
body
 seeking help or advice from a consumer non-government organisation
 relevant tribunal, like the NSW Consumer, Trader and Tenancy Tribunal
 seeking a remedy in court.
5 Explain why both marketing innovations and technology pose challenges for
consumer protection law.
Changes in technology have both positive and negative effects on consumer
protection. Technology is constantly changing the manner of interaction between
consumer and supplier, as well as the types and range of products available. While
technologies have offered enormous benefits to consumers, they have also
introduced new possibilities for abuse or exploitation. In some of these areas, the
law has required reconsideration and amendment to improve standards of
consumer protection. Some examples of these areas include telemarketing, spam,
phishing, electronic contracts, or privacy and data protection laws.
Generally, the Australian legal system affords consumers adequate protection
against the misuse of technology where suppliers are located within Australian
borders. For example, the ACCC has powers to enforce compliance domestically,
and the police force has powers to investigate violations where criminal conduct is
involved. The legislature has worked to keep Australian law relatively up to date
with changing technologies to ensure an appropriate balance between flexibility in
the changing market and adequate protection of consumers from exploitation.
However, the law is constantly evolving, and particular issues remain with
respect to prevention and enforcement across different jurisdictions, particularly
concerning internet commerce. Effective future laws and consumer remedies are
likely to become increasingly dependent on the existence of multilateral treaties
and standardisation of measures in place across international boundaries.
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© Cambridge University Press 2011