;.

Week 10 - Tutorial Questions

I. Review Questions

1. What are the implied terms for consumer goods contracts under the ACL?

2. What are the implied terms for consumer services contracts under the ACL?

3. Remedies under the ACL do not depend on whether the breach is a minor or a major
failure. True or False? Discuss.

4. Business can incorporate a disclaimer into a consumer good contract and that disclaimer
is entirely valid under the ACL. True or False? Discuss.

II. Case Studies

5. Ted, a 17 year old boy bought some fresh milk from Ausmilk, a dairy company. After
taking the milk, Ted became very weak and was having problems talking and seeing. He
was rushed to the hospital and investigations subsequently revealed that the fresh milk
he took was contaminated with botulism causing bacteria. Has Ausmilk breached any
consumer guarantee under ACL? What are the consequences of Ausmilk’s action under
ACL?

a. Is there a consumer goods contract?

- The business supplies a good?
- Is the business in trade or commerce?
- Consumer good?

b. Sections?
- s54

6. Lee went to Vinafone store and saw an iPhoncy X at a very good price. He asked the
Vinafone representative if the product could support a Skype video call and he was
assured that the phone would work well with Skype. Lee was asked to sign a sale
agreement before buying the phone. After buying the phone Lee discovered that it could
not work with the Skype application. Lee returned the phone to Vinafone and asked for
his money back. Vinafone however told him that he could no longer return the phone and
get his money back because the phone is fit for its main purpose of making and receiving
calls as well as other important functions of a phone. Vinafone explained to him that it
would not be possible to sell the phone to another customer because the paper back is
torn and he already used it for one day before returning it. Vinaphone also drew Lee’s
attention to an exclusion clause in the contract of sale stating that all sales are completely
at owner’s risk and Vinafone accepts no ‘liability for any verbal representations,
warranties or conditions, howsoever, not expressly stated in the sale agreement’. Lee
insists that he is entitled to return the phone.
 Advise Lee as to his rights under the ACL’s consumer guarantees.

a. Is there a consumer goods contract?

- The business supplies a good?
- Is the business in trade or commerce?
- Consumer good?
b. Sections?
- S55
- S56
c. remedies: major

d. disclamer: s64

7. Susan is an elderly lady who migrated to Australia a year ago.  She did not speak English
well.  Susan needed to buy a vacuum cleaner because she was struggling with keeping her
house clean and did not know where to buy home appliances. Plus, she wanted a specific
vacuum cleaner which would be suitable for outdoor use and for removing particles
causing allergy from cats. She had two cats and loved them but suffered horribly from cat
allergies.  
One day when Susan was at home, a door-to-door salesman knocked her door and
offered her to try a new vacuum cleaner SUPERXX.  When she asked the salesman if the
vacuum cleaner was suitable for all of her needs, the salesman replied – “Yes, it is exactly
what you need! It will clean all of the cat hairs and can be used indoors or outdoors.”  He
 also said that everyone in Sydney now uses this vacuum cleaner because it is cost efficient
and environmentally friendly and only runs on batteries. In addition, the salesman
showed her how to use it and it was easy to fold it.  
Susan was very impressed.  The only thing she was concerned about was the price -
1000AUD.  She was not rich and only had 1000AUD in cash.  The salesman also said that
the vacuum cleaner comes with a 5-year international warranty and even if she moves
back to her country of origin, she would still be able to fix it there and anywhere around
the world.  
Susan purchased the vacuum cleaner. A week later she discovered that it did not clean
the hard surface of her backyard. Moreover, she was still suffering from cat allergies as
the vacuum cleaner failed to remove most of the cat hairs. Now Susan wants to return
the vacuum cleaner and get her money back.

Advise Susan about any statutory rights she may have against the salesman.
Susan is a consumer bc the good < $100,000 (1,000AUD) => for domestic use.
Unconscionable conduct: (s20)
- The business has a conduct of making statement to Susan that the vacuum is exactly
what Susan needs (…).
- The conduct is in trade or commerce: ongoing business, he makes profit from selling
the products.
- Unconscionable:
+ Susan is an elderly lady who migrated to Australia a year ago.  She did not speak
English well. reasonably she does not know much abt vacuum. (disad)
+ She wanted a specific vacuum cleaner which would be suitable for outdoor use
and for removing particles causing allergy from cats. She had two cats and loved them
but suffered horribly from cat allergies. (weakness)
+ the salesman knows and takes ad of that.
Misleading conduct (s18)
- The business has a conduct of making statement to Susan that the vacuum is exactly
what Susan needs (…).
- The conduct is in trade or commerce: ongoing business, he makes profit from selling
the products.
- Misleading conduct: objective test:
+ lying, false claims
+ leads Susan to error
a. Is there a consumer goods contract?
- The business supplies a good?
- Is the business in trade or commerce?
- Consumer good?
b. Sections? S55; s56; s54 (the vacuum should clean most of cat hairs)
c. Remedies: major s230

8. Paul was looking for a new table so he went to the Tip Top Table Company (TTT). As he
was looking around he noticed a beautiful table in which he really liked.
A salesman approached him and asked if he could assist. Paul said that he has 4 boys in his
family and that they were all very rowdy and active and would always jump on the table.

The salesman said “I know a table which is not in the showroom but it looks very similar
to this table and it’s called the Max Table”. The salesman also said “This table can hold up
to 1000 kilos (misleading) and that even if 10 children jump on it (misleading bc although
not verifiable, but give false impression), it will still not break. Additionally, it’s the most
beautiful table in the world.”

Paul became very excited and said I will buy it now. They went to the office where Paul
signed a very basic contract in which it said Paul will pay $5,000 for the table. On the
contract was also written the words:

“TTT, Seller, will not be responsible for any damage which may occur as well as the
quality of the table.”

The table was delivered to Paul and that evening when his 4 children arrived they began to
play near the table. They all said that the table was the ugliest thing they have ever seen.
One of the children placed their laptop on the table and the table cracked and broke in half.

Required: Please advise Paul all possible common law AND statutory legal claims he
may have against the TTT Company.

- Common Law (W8)

- ACL
a. General protections
S18 (stronger), s20
b. Consumer guarantees
S54, s55, s56, s57.
Remedies: major s230
Disclaimer s64