Chapters 23-24.docx

4 Pages

Management and Organizational Studies
Course Code
Management and Organizational Studies 2275A/B
Philip King

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Chapter 23: Sales and Marketing- The Contract, Product, and Promotion What is Marketing Law? Marketing Law: fundamental laws affecting marketing process are common law principles; also regulated by federal, provincial, and municipal government - Main objectives are: to protect consumers from physical harm, foster fair competition, protect consumers from unfair selling practices - If international company, marketing practices are subject to laws and regulations of other countries as well - Marketing law concerns four P’s of marketing mix: product, price, place, promotion - Traditional business law topics fall under marketing function of business include contract of sale and legislation relating to competition and consumer protection Contract of Sale Terms Relating to Product - When customers make purchase, have expectations about product’s attributes and characteristics - Foundation of common law concerning product is caveat emptor meaning “buyer beware”; this requires prospective purchasers to make appropriate investigations before buying - If purchaser wants product to exhibit certain characteristics, must be contained in contract - Because this can product unfair results, judges began to create principles to provide measure of protection for purchaser of goods Sale of Goods Legislation in Canada - Specialized branch of contract law: governed by legislation but where legislation not relevant then common law rules - Applies only to sale of goods (personal property in tangible, portable form) as well as items attached to land that can be severed - Implies terms into contract for sale of goods, classifies them, and provides remedies to purchaser based on how breached term has been classified - Unless parties expressly agree to contrary or otherwise able to exclude operation of Sale of Goods Act, a number of terms automatically implied into contract - In addition to implying terms, legislation classified them as either conditions or warrantees o Conditions: essential to purpose of contract o Warrantees: minor or collateral terms Conditions  seller has right to sell goods - Goods will be reasonably fit for intended purpose where buyer makes it known what intended purpose of goods will be (express or implied), to show he is relying on skill/judgement of seller (not necessary when goods used for ordinary purpose) - Goods will be of merchantable quality, where goods are bought by description (reliance by buyer on some description by seller, and may be reliance even when buyer has seen or inspected goods) - Where goods sold by sample, goods will correspond to sample and buyer will have reasonable opportunity to compare goods with sample - Where goods sold by description, goods will correspond with description Warrantees  buyer will have and enjoy quiet possession of goods, generally means third parties will not claim rights against them - Goods are free from liens and encumbrances in favour of third parties that were not declared or known to buyer at time contract was made Remedies  classification of relevant term of contract essential to determining remedy that court entitled to give disappointed purchases - Right of repudiation: when condition breached, balance of contract and further obligations under it can be dismissed if non-defaulting party so chooses - When warranty breached, buyer can maintain action for damages or ask court to reduce purchase price but buyer cannot return goods and must continue contract in question Limitations of Sale of Goods Legislation  provides helpful inroads on doctrine of caveat emptor, has limitations - Applies only to sale of goods, not land or services - Requires privity of contract between customer and “offending” party; breach of warranties by manufacturer, for example, are not covered - Permits contracting out of implied terms (buyer and seller can agree certain terms won’t apply) - Does not address pre-contractual representations made by vendor Consumer Protection Legislation - Generally statutes apply only when goods purchased for personal use - Some provinces adopted approach to imply certain conditions and warranties and prevent their exclusion - All provinces have enacted broader consumer protection legislation - In Ontario, addresses consumer rights, unfair trade practices (false, misleading representations), particular consumer agreements, credit agreements, leases, along with remedies and enforcement - Broader scope: applies to all forms of transactions for consumer products, not just sales (includes leases, conditional sales, contracts for services, or labour and materials); o Also no longer possible to exclude operation of implied terms (often privity of contract cannot be defense against ultimate consumer) - Remedies available generally depend on seriousness of breach Implied warranties under legislatio
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