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Chapter 15-20

COMLAW 101 Chapter Notes - Chapter 15-20: Natural Person, Garage Sale, Bulldozer

Commercial Law
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[ Tuesday 23rd January FTA, CGA and negligence ]
You see an ad sating was 199 now 99. you bought one before the sale started and the price was only
Yes. Misleading conduct trade claim, civil claim section 9
Wrong labelling - fair trading act. speak to the manager, breach, fine 200,000 individual ~ 600,000 if
S9 no person shall in trade engage in conduct that is misleading or deceptive or likely to mislead or
Help the lowest common denominator of target audience
e.g. not saying something. He is only licensed to seat 80, although has 100 seats , cannot say have
100 seats.
(b) Unsubstantiated representations s12
A claim a business makes about a good or
service must be substantiated
a claim a business makes about a good or service must be substantiated
“clinical tests prove”
“Avaible to you at factory prices”
Environmentally friendly
Defence: “reasonable grounds” for making the representation
“Doctors recommend”
“tests prove”
“easter sale – 50% off”
(Watson et al., 13.4)
4. Other Unfair Trade Practices
Bait Advertising
Cannot advertise goods at a certain price if there are not sufficient goods to reasonably satisfy the
demand for those goods.
Have enough stock in store to meet projected demand.
Offering gifts and prizes
Week 4
Wednesday, 31 January 2018
10:43 PM
COMLAW 101 Page 1

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Offering gifts and prizes
Cannot offer gifts, prizes or other free items with the intention of not providing them or not
providing them as offered
(Watson et al., 13.5)
These defences apply to breaches of criminal sections only eg. Organic strawberrys but not.
5. Defences
While there are defences under the FTA, they are extremely narrow and difficult to prove.
Reasonable mistake
Have no safety measures, not reasonable
Reasonable reliance on information supplied by another person
Soliciter/actual agent there is a difference
The act or default was by another person or was due to an accident or other cause outside of the
defendant’s control and the defendant took reasonable precautions and exercised due diligence to
avoid the breach
(Watson et al., 13.7)
6. Contracting out of the Fair Trading Act
“The provisions of the fair trading act shall not apply to this agreement”
“the purchaser acknowledges that he replies on his own
Can you say these things?
YES if
1. agreement is in writing
2. both parties are in trade
3. Fair and reasonable that the parties should be bound by the agreement
Civil injuction, damages, vary contract, refund money
Criminal (does not apply to s9) 200,000 fine 600,000 business fine
Traditionally unable to contract out of the FTA, but from the 18 June 2014, the parties can contract
out of the Act (that is, agree that the provisions of the Act do not apply) only if:
The agreement is in writing;
Both parties are in trade and agree to contract out of the provisions of sections 9, 12A, 13, or 14(1);
It is fair and reasonable that the parties are bound by the provision in the agreement.
Therefore if you are supplying a person with a TV for their home, you cannot contract out of the FTA,
thus any disclaimer clauses to the contrary will not be effective under the FTA.
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(Watson et al., 13.8.4)
7. Remedies for breach of the Fair Trading Act
Wide range of remedies available:
For offences, maximum of $60,000 for natural person per breach and $200,000 for a body corporate
(ie a company).
$600,000 body corporates
From 18 June 2014 $200,000 natural persons
Part B: Consumer Guarantees Act 1993 (CGA)
Watson et al chapter 13.9
The CGA protects “consumers” against substandard goods and services as it sets a number of
minimum requirements (called guarantees) that goods must meet
Goods = does not include land
Services =
Note: unlike the Fair Trading Act, the Commerce Commission cannot bring an action for breach of
the CGA. Not enforced by the CCA its up to youu
As with the Fair Trading Act only those people in trade who are offering goods or services are caught
(this means that if you are selling some of your old clothes at a garage sale you will not be caught
under the CGA).
Note the guarantees under the CGA are different from a manufacturer’s warranty or guarantee, that
is you can be outside a manufacturer’s warranty, ie TV had a twelve month warranty on it and the TV
breaks down after 14 months, but you may well be protected under the CGA
(Watson et al., 13.9.1)
Who is a “consumer”?
Test = if goods or services normally purchased by people for their personal domestic use then the
purchaser will be a “consumer”.
“Acquires – obtain by way of gift, purchase or exchange’ and also means take on lease, hire, or hire
A supplier a person who in trade, supplies goods/services to a consumer
COMLAW 101 Page 3
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