CONSUMER PROTECTION LAWS
Introduction
The Bolt Worldly advertisement is in contravention of any provisions under the ACL
One of the issues in the Bolt case that are in contravention with the provisions of the Australian Consumer Law (ACL) involves the adjustments made in price in order to portray it as discounted price. Under section 29 of the Australian Consumer Law, any persons engaging in trade should not present any price of the goods or services that they are supplying that is misleading or falsified (Barron, 2013, p. 75). Bolt fails to honor this provision of the law by increasing the initial price of the Bolt Worldly from $699 to $899 and then reducing it back to $699 after two days in order to use it as a point of the campaign. The company deceived consumers by insisting that the Bolt product had been reduced in terms of price as the advertised price was the actual price of the products. The sudden increase in price and then reversion to the actual price is a strategy that was embraced by the company in order to develop an unfair competitive advantage over its rivals on the basis of price.
Another case presented in the Worldly advertisement that reflects Bolt’s contravention of the law involves the representing misleading and deceiving quality and composition of the mobile phone. Section 29 of the Australian Consumer Law also provides that all persons involved in a trade or commerce as suppliers should not represent any misleading or falsified quality, standard, style, composition, grade, value, or model of the services or products offered (Turner & Trone, 2013, p. 117). Any information offered concerning the products should be actuated and affirmed in order to avoid misleading of the consumers on making decisions that involve acquiring the products. Bolt contravened this law in the Worldly advertisement by stating that the mobile phone emitted 20% less radiations as compared to other mobile phones in the market, when the company had not carried out any tests to reach to such a conclusion and to affirm such a statement. As such, some of the consumers may have resolved to purchase the product based on such a statement, when it was actually falsified and hence deceiving.
Bolt’s declaration of the Worldly mobile phone as having been created by Australian for Australians was a contravention of the law as consumers were misled to believe that the product had been created in Australia by Australians when it was actually from Thailand. Under section 29 of the Australian Consumer law, all suppliers are required not to provide any misrepresentation of the origin of the goods or services that they are supplying to avoid misleading the consumers of such goods or services (Davison, et al., 2012, p. 38). Bolt went against this provision in its Worldly advertisement by using bold language to suggest that the product had been created in Australia, while employing a small and less visible font at the very bottom of the advertisement to mention the actual location of the Worldly. It is clear that Bolt did not want the consumers to realize the small font that indicated the actual origin of the product. This was aimed at drawing more consumers within Australia towards the product and Bolt’s shops.
Bolt is in breach of the guarantee provisions under the ACL. What rights or remedies (if any) are available to Hannah?
The Australian Consumer Law provides consumers with various guarantees on entering into agreements for supply of goods or services. To start with, section 55 of the consumer law requires all suppliers engaging in commerce or trade to guarantee the consumers of their products fitness for the disclosed purpose (Latimer, 2011, p. 515). In this case, suppliers are expected to supply goods to consumers that meet the purpose for which the consumers specified they need such a product. It is considered an offense for a supplier to ignore the disclosed purpose by the consumer and instead to offer the consumer a product that does not meet their needs, especially considering the fact that the supplier has a better understanding of their products as opposed to the consumer and is responsible for advising the consumer on the purchase of the product that would best meet their needs (Gibson & Fraser, 2014, p. 611). Lily, a salesperson at one of Bolt’s shops that was visited by Hannah to purchase a laptop, failed to consider the disclosed purpose by Hannah, which was the need for a computer that could last for a minimum of eight hours without the need to recharge it as she had eight hours of lectures on Tuesday that she needed to take. Lily sold to Hannah a computer that only lasted four hours of battery, disregarding her purpose of acquiring a computer that will allow her to take eight hours of lectures on Tuesday.
Section 56 of the Australian Consumer Law covers the guarantee of fitness for the provided description. This provision requires suppliers engaging in trade to guarantee the consumers of their supplied goods or services that such goods or products meet the description provided to the consumers of the products (Thampapillai, et al., 2015, p. 58). In this case, the supplier is expected to ensure that the consumer is provided with the actual information concerning the various products on display to allow them to make informed decisions on what products to purchase. It is considered an offense for any supplier to make wrongful claims about the product that may mislead the consumer into making the wrong decisions, with the intention of convincing the consumer to purchase the product (Morandin & Smith, 2011, p. 41). Lily misleads Hannah by informing her that the Bolt BP’s battery lasts for 12 hours to convince her to purchase the product, when it actually only lasts for four years.
Consumer are provided a guarantee of freedom from encumbrances, charges, and security under section 53 of the Australian Consumer Law (Corones, 2011, p. 35). For these requirements to be applied by suppliers on consumers, the consumer consent must be obtained before creating and applying them. In addition, the charges, encumbrances, and security must be disclosed to the employee before any agreement on the supply is reached. Bolt failed to observe this law by failing to disclose a security notice to Hannah prior to the purchase of the Bolt BP, and only revealing such a notice when she returns the computer for its failure to meet her needs. In addition, the security is applied to her case without seeking her consent, an aspect that makes it against the law.
Bolt has engaged in any prohibited conduct under the ACL in relation to their dealings with Crisco?
Bolt threatened to terminate its relationship with Crisco without a basis, as they did not have a problem with the products, services, or even prices offered by Crisco. Crisco’s business with Bolt formed its major source of income as an organization, an aspect that made it an issue of great concern to cut its links with Bolt. As such, the company was bound to do anything in order to maintain its relationship with Bolt and hence to ensure the company’s survival and sustainability. As such, Bolt coerced Crisco into entering into a renewed agreement based on Bolt’s terms and conditions and an agreement to pay a rebate, with the promise of not only maintaining their relationship with Crisco, but increasing their orders by 20 percent. This is in contravention with section 50 of the Australian Consumer Law, which provides that any person engaged in a trade or commerce should not employ any form undue harassment or physical force to coerce another party with whom they are engaged in business into a supply of goods or services (Gibson & Fraser, 2014, p. 643). Bolt employs undue harassment in the form of intimidating Crisco, based on the latter’s dependence on Bolt.
To
start with, Bolt creates the new terms of their relationship, denying Crisco a
change to negotiate the terms and to take part in the establishment of the
conditions of their interactions. In addition, Bolt asks Crisco to accept to
pay a rebate to them in order to maintain business with them. Bolt proceeds to
give Crisco a period of only two days to decide on whether they want to
continue doing business with them or not, thus denying them enough time to
contemplate on the new terms and how they aligned with their interest as a
company. Bolt also made Crisco agree to a situation in which Bolt held the
exclusive power to terminate the relationship whenever they wanted. As such,
Bolt used their position in the relationship as compared to that of Crisco to
coerce the latter into a relationship. Section 30 of the Australian Consumer
Law also prohibits parties from giving rebates, gifts, and other free gifts to
secure favor in terms of the supply of goods or services (Latimer,
2011, p. 545).
Bolt imposed a rebate on Crisco in order to favor them as suppliers of their
products to other suppliers within the market. It is important to note that if
rebates are made on the basis of legal agreement to compensate for high prices,
among other factors, they are protected by the consumer law. Nevertheless, Bolt
did not have a problem with the prices offered by Crisco for their goods, an
aspect that makes the imposed rebate illegal under the consumer law.
References
Barron, M., 2013. Fundamentals of Business Law. 7th ed. New South Wales: McGraw-Hill Education Australia.
Corones, S. G., 2011. The Australian Consumer Law. New South Wales: Thomson Reuters (Professional) Australia.
Davison, M. J., Monotti, A. L. & Wiseman, L., 2012. Australian Intellectual Property Law. 2nd ed. Cambridge: Cambridge University Press.
Gibson, A. & Fraser, D., 2014. Business Law 2014. New South Wales: Pearson Australia.
Latimer, P., 2011. Australian Business Law 2012. 31st ed. Sydney, NSW: Wolters Kluwer.
Morandin, N. & Smith, J. eds., 2011. Australian Competition and Consumer Legislation 2011. Sydney, NSW: Wolters Kluwer.
Thampapillai, D., Tan, V., Bozzi, C. & Matthew, A., 2015. Australian Commercial Law. Cambridge: Cambridge University Press.
Turner, C. & Trone, J., 2013. Australian Commercial Law. Queensland: Lawbook Company.
