TOPIC 6: Consumer and Marketing Law Flashcards
MagicMilk markets two kinds of reduced fat milk drinks, Trim Chocolate Milk and SuperTrim Chocolate milk. The nutritional content of each drink is listed on the side of each container of chocolate milk. The nutritional contents vary as to the quantity of minerals such as calcium and iron contained in the drink but the fat content of the drinks is exactly the same. This is:
Not a breach of the Fair Trading Act as the words “Trim” and “Supertrim” would be understood by the consumer to be no more than puffs which are not actionable under the Fair Trading Act.
A breach of s9 of the Fair Trading Act.
Not a breach of the Fair Trading Act as the targeted consumers would understand that all milk contains some level of fat and are thus not misled.
Not a breach of s9 of the Fair Trading Act because the fat content of the drinks is below that of regular chocolate milk.
A breach of s9 of the Fair Trading Act.
Hans buys a second hand rice cooker on TradeMe from Gretel who is moving flats and wants to get rid of her unwanted electrical appliances. A week after taking delivery of the rice cooker it explodes and sets fire to Hans’ kitchen. What is Hans’ legal position?
Under the Consumer Guarantees Act Hans can ask for his money back because the cooker is unsafe but cannot claim for the damage caused by the fire.
Hans has no claim under the Consumer Guarantees Act.
Hans has a claim under the Consumer Guarantees Act because the rice cooker is unsafe. He can claim for the damage to his kitchen and ask for his money back.
Hans has a claim under the Fair Trading Act because Gretel has implied the rice cooker is safe when it is not which amounts to misleading or deceptive behaviour.
Hans has no claim under the Consumer Guarantees Act.
Hamish is the sales director of Norm Harvell Ltd, an electrical appliance shop. He wants to offer an extended warranty of repair and service to his customers. What legal advice would you offer?
Extended warranties are illegal.
Extended warranties must be recorded in writing, list the warranties offered over and above those given by the Consumer Guarantees Act.
An express warranty of this nature is required by law because the televisions to which this will extend are not covered by the Consumer Guarantees Act as they were manufactured overseas and the Consumer Guarantees Act does not apply to such goods.
Extended warranties must be recorded in writing, list the warranties offered over and above those given by the Consumer Guarantees Act, and the consumer has a cooling off period of 5 working days during which time the consumer can decide to cancel the agreement
Extended warranties must be recorded in writing, list the warranties offered over and above those given by the Consumer Guarantees Act, and the consumer has a cooling off period of 5 working days during which time the consumer can decide to cancel the agreement
Revy bought an office cleaning business. The advertisement for the business on Facebook said, “This business runs itself.” Revy finds that she has to spend a lot of time supervising her staff, collecting overdue accounts and finding new clients. What is her legal position?
A claim for breach of contract only as the transaction is not covered by the Fair Trading Act. The previous owner was not in “trade” as he did not trade in buying and selling businesses.
She has a claim under the Fair Trading Act for a breach of s9 as the advertisement amounts to misleading and deceptive conduct in the course of trade.
No claim under the Fair Trading Act because the Fair Trading Act does not apply to the internet.
No claim under the Fair Trading Act as the advertisement is not misleading or deceptive because a reasonable person would take the statement to be an exaggeration and not be misled.
No claim under the Fair Trading Act as the advertisement is not misleading or deceptive because a reasonable person would take the statement to be an exaggeration and not be misled.
You are the sales manager of Costington’s. Your media production company has produced a television advertisement for the sale of beds. The advertisement shows the price and a 0800 number to phone to place orders. You watch the ad and notice that it flashes the words “delivery charges apply” in small print very briefly on the screen. Had you not been watching the ad closely you may well have missed it. What should you do?
Change the advertisement as it may amount to a breach of the Consumer Guarantees Act in its present form.
Nothing. All consumers would expect delivery charges to apply in relation to the sale of beds.
Nothing. It’s not your problem. If any complaints are made it is up to the media company to sort them out.
Change the advertisement as it may amount to a breach of the Fair Trading Act in its present form.
Change the advertisement as it may amount to a breach of the Fair Trading Act in its present form.
Under the Consumer Guarantees Act which of the following is correct:
The Consumer Guarantees Act is not restricted to the sale of goods only.
In certain circumstances the parties to a contract for the supply of goods can agree that the Consumer Guarantees Act does not apply to the transaction.
The Consumer Guarantees Act covers the supply of gas, electricity and computer software.
All of these statements are correct.
All of these statements are correct.
“Misleading or deceptive conduct” under s9 of the Fair Trading Act 1986 can apply:
To purely domestic or private transactions.
Only where there has been negligence or carelessness.
To conduct that unintentionally deceives someone.
Only where there is actual dishonesty.
To conduct that unintentionally deceives someone.
Ben travels overseas on holiday. He buys himself a pair of shoes and 9 extra pairs to sell on his return to New Zealand. He advertises the shoes for sale on TradeMe. What is Ben’s legal position?
The sales are not covered by the Consumer Guarantees Act because the Act does not cover Internet sales.
Ben is only subject to the Consumer Guarantees Act if the manufacturer does not have a place of business in New Zealand.
The sale is not covered by the Consumer Guarantees Act because the manufacturer does not have a place of business in New Zealand.
Ben is subject to the Consumer Guarantees Act and the Fair Trading Act.
Ben is subject to the Consumer Guarantees Act and the Fair Trading Act.
Dolph buys a microwave oven to use in the tea room at his factory so his employees can heat their lunches. Before he buys the microwave the salesman draws his attention to a clause in the shop’s standard form sales agreement which says,” The customer acknowledges that any goods supplied for commercial or business use, or for use in connection with a business will not be subject to the Consumer Guarantees Act.” What is the legal effect of this clause?
The clause will only be effective if both parties sign the agreement.
The clause will not be effective as it is not possible to exclude a consumer’s rights under the Consumer Guarantees Act.
The clause will be effective and Dolph will not be able to claim under the Consumer Guarantees Act if the microwave proves faulty.
The clause is irrelevant as the Consumer Guarantees Act does not apply to this transaction.
The clause will be effective and Dolph will not be able to claim under the Consumer Guarantees Act if the microwave proves faulty.
Marge buys a second hand forklift (fork truck) from ToolsRUs to move the large statues and planter pots she has in her garden. After six months the forklift breaks down and requires repairs to replace a broken hydraulic hose. What is Marge’s legal position?
ToolsRUs are not liable for the repairs because the Consumer Guarantees Act does not cover second hand goods.
ToolsRUs are liable for the repairs under the Consumer Guarantees Act because the forklift is being used for household or domestic purposes.
Tools RUs are not liable because a reasonable consumer would not expect a second hand forklift to last longer than 6 months before requiring repairs.
ToolsRUs are not liable for the repairs because the Consumer Guarantees Act does not cover forklift trucks.
ToolsRUs are not liable for the repairs because the Consumer Guarantees Act does not cover forklift trucks.
A shop advertises sofa’s for sale “with free delivery.” What is the legal position if the shop sells the sofa’s at a reduced price to customers who pick up the sofas themselves?
A breach of the Consumer Guarantees Act.
This is not a breach of the Fair Trading Act as it is the customer who make an offer to the retailer and the retailer is free to make a counter offer, in this case offering a discount to the customer.
A breach of s9 of the Fair Trading Act only.
A breach of both civil and criminal provisions of the Fair Trading Act.
A breach of both civil and criminal provisions of the Fair Trading Act.
Marge advertises her family home for sale on Trade Me and describes the house as being “in the Grammar Zone”. Edna buys the house but subsequently discovers the house is not in the Grammar zone and her children will have to go to a different school.
Edna may claim under the Fair Trading Act for misleading and deceptive conduct and the Consumer Guarantees Act as the land does not meet the description given on TradeMe. This is a breach of the Consumer Guarantees Act which requires items to correspond with their description in advertisements.
Edna has no claim under the Consumer Guarantees Act as the Act does not cover the sale of land, but she can sue under the Fair Trading Act for misleading and deceptive conduct.
No claim under the Fair Trading Act or the Consumer Guarantees Act.
A claim under the Fair Trading Act for “unfair commercial activity”.
No claim under the Fair Trading Act or the Consumer Guarantees Act.
Homer contracts with BoatsRUs to charter a yacht for a family holiday. “It must be able to sleep five people comfortably,” stipulates Homer. BoatsRUs agrees to supply such a yacht. When Homer and family arrive to take over the boat he finds that it can only sleep three adults comfortably in the cabin. Two other family members will have to sleep on deck under an awning. The weather forecast predicts rain overnight.
He cannot cancel the contract, but can only claim for damages for loss of enjoyment of the holiday.
He can cancel the contract and claim damages for the difference in cost in chartering another yacht that will sleep five people comfortably.
He can cancel the contract only.
He is not entitled to cancel or claim damages because this contract is governed by the Consumer Guarantees Act.
He can cancel the contract and claim damages for the difference in cost in chartering another yacht that will sleep five people comfortably.
Marcus bought a heat pump on the advice of a retailer and had it installed. It failed to heat his house adequately, never worked properly in summer and stained his walls and ceiling. After 12 months he took it back to the retailer. What is his legal position?
The retailer can refuse to refund the purchase price because the heat pump, after a year’s use, is not covered by guarantee.
He can ask for his money back only.
He can ask for it to be fixed, if it can be fixed. If it is capable of being fixed he cannot ask for damages to repair the stains on his walls and ceiling.
He can ask for a replacement or a refund if it can’t be fixed and for damages to repair the stains to the walls and ceiling
He can ask for a replacement or a refund if it can’t be fixed and for damages to repair the stains to the walls and ceiling.
Sam was moving house. He asked his insurance broker, Dale, to arrange house and contents insurance for him. Dale advised him that he had arranged a new insurance policy that covered his house and its contents. Sam cancelled his existing insurance policy. Before moving into his new home a flood destroyed $15,000 worth of Sam’s household goods that he had in storage. Sam discovered that his new policy only covered the new house, not his household possessions. Is Dale liable for the loss of the Sam’s possessions?
No, because this transaction is not covered by the Consumer Guarantees Act. Insurance services are not covered by the Consumer Guarantees Act.
No, because the flood was not foreseeable.
Yes, because insurance agents owe a fiduciary duty to their clients and Dale has failed to warn of the lack of insurance coverage.
Yes, because the transaction is covered by the Consumer Guarantees Act and the service supplied has not been performed with due care and skill.
Yes, because the transaction is covered by the Consumer Guarantees Act and the service supplied has not been performed with due care and skill.
