ASSESSMENT INFORMATION
Assessment two Exam (Take Home)
Assessment Three is a take-home paper.
Date Available: 9am, Monday 10 February 2025.
Due Date: 9pm, Wednesday 19 February 2025.
Submission
Electronic copy only – via Turnitin
Hypothetical Problems
Assessment two consists of four hypothetical problem questions. Each question is worth 10%.
Please answer the questions as problem questions and not as answers to theory questions. In other words, you do not need an introduction or conclusion. Furthermore, you do not need a Bibliography.
Please state which question you are answering. For example, Answers to Question 1′, ‘Answer to Question 2’, etc.
Please use headings (e.g. Person X v Person Y), sub-headings (e.g. Section 18 of the ACL), and sub-sub-headings (e.g. Likely to mislead or deceive). This will help with focus of your answers and save words.
Word Limit
The word limit is 2,500 words (excludingfootnotes). Therefore, the maximum word count includes body text, headings and sub-headings, quotations
Although the break-down of the word limit to each question is left to your own judgment, as a rule of thumb, I suggest that you portion around 600 words for each question.
No Research
There is no need for research for Assessment Three. The prescribed textbook is sufficient.
Prescribed textbook is Adrian Coorey, Australian Consumer Law – The Comprehensive Guide (Second Edition)
Marking
Marking will be focused on identification of correct legal issues,andthe application of the law to the facts
Module 6 is not going to be assessed in Assessment 2 (i.e. private and public remedies and ACCC Enforcement powers), and neither will Module 5 be assessed in Assessment 3 (i.e. Manufacturers’ Liability and Product Safety).To be clear, only Modules 1 to 4 will be included in Assessment 2; and
As a hint, there is a question on unfair contract terms in Assessment 2.
Topic 1 Misleading and deceptive conduct
Topic 2False and misleading representations
Topic 3 Unconscionable conduct
Topic 4 Unfair contract terms
Topic 5 Consumer guarantees and product safety liability
Topic 6 private and public remedies and ACCC Enforcement powers
Take Home Exam
Question One (worth 10%)
John, Paul, George and Bingo were musicians in a band called the Beagles.
The Beagles were about to release their latest smash hit album called Sgt. Salt and Pepper’s Happy Hearts Club Band (Salt and Peppers).
In January 2022, to promote the Salt and Peppers album, the Beagles started a world tour called, Lucy in the Sky with Diamonds (LSD Tour). The first stop of the Tour was Australia.
To travel around Australia, the Beagles decided to purchase a double-decker second-hand school bus and Catamaran boat and trailer from Jimbos Used-Vehicles (Jimbo). The bus was 10 years old, but appeared to be in good condition. The boat and trailer were much older, but the boat was described as built to last a lifetime We guarantee it.
The Bus was priced at $150,000 and the boat and trailer were together priced at $40,001. The Beagles signed two separate contracts. The first contract was for the bus and the second contract was for the boat and trailer. At the bottom of both contracts, the following disclaimer was in large print:
It is your responsibility to fully inspect any vehicle before purchase. We strongly advise you to seek a comprehensive inspection from the National Roads and Motorists Association (NRMA). Under no circumstances will refunds be provided. All vehicles supplied by us are considered by us to be commercial vehicles. The Australian Consumer Law does not apply to you.
The Beagles quickly inspected the vehicles before purchase, but did not seek an inspection from NRMA.
One week into the Tour, the Beagles drove the bus with boat and trailer up the coast of New South Wales. Along the way, they drove on a bumpy dirt road for over 10km. The road was being repaved. Shortly after they noticed that an error message reading Cruise Control failure appeared on the dashboard of the Bus. When the cruise control was switched on the bus started to speed up and slow down at irregular intervals, instead of maintaining a constant speed. When they arrived at a service station, the owner, who was a retired mechanic, informed the Beagles that the cruise control system was faulty and this was something well known in this model of bus. The owner also informed the Beagles that he noticed a large amount of rust at the back of the boat near the motor and that the boat was unlikely to be seaworthy. The owner also said that the hitch for the trailer was damaged and should be not used as it was too dangerous to continue to drive with the trailer. The Beagles informed the owner that they needed to continue with their Tour, and whether he could fix the hitch or provide a replacement part. The owner said that he could not fix the hitch, nor could he (or anyone) provide a replacement as this model was no longer made.
The Beagles immediately took the bus, boat and trailer back to Jimbo and demanded a refund for all three vehicles.
Question
Advise the Beagles whether Jimbo has non-complied with any provisions of the Australian Consumer Law (ACL) and whether the Beatles is entitled to a refund for the bus, boat, and/or trailer. (10 marks)
Question Two (worth 10%)
John, Paul, George and Bingo were musicians in a band called the Beagles.
One day, George wanted to rent an electric guitar. The only problem was that he was unsure whether he wanted to use the guitar for his upcoming tour in 6 months, or simply use it to jam on at home.
George visited his favourite music store CC Music Factory Pty Ltd (Music Factory) and saw a classic Gibson guitar (Gibson) in the corner of the store. He walked over to the guitar and saw a tag, which said This guitar is for yearly rent only. George walked over to the counter and spoke to Murray. George said to Murray: I want to rent this guitar for 6 months. In response, Murray said: the guitar is only available for rent for 12 months. George reluctantly agreed. Murray provided George with the following terms of rent that were located on page 6 of the Rental Agreement in small font:
Standard Terms of Rent
The rental fee for the Gibson is $100 per month.
You must sign up to a rental contract for at least 12 months.
You must pay upfront a minimum of $1,200 rental amount for the Gibson, regardless of whether you return the Gibson before the end of the 12 months.
You must pay upfront a further deposit of $2,000 in case you cause damage the Gibson and/or its case during rental.
If you damage the Gibson while it is rented, you must pay all fees for repair or replacement, and forfeit your $2,000 deposit, regardless of whether the cost of repair or replacement is less than $2,000.
Music Factory can vary any term in this contract at any time without notification, and may cancel the agreement at any time without prior notification.
You may cancel your rental at any time, provided that you give Music Factory 30 days notice in writing and pay a cancellation fee of $1,200.
You are fully responsible and liable for damages under any circumstances where the guitar and/or its case are unsecured. In such circumstances, you are responsible to pay Music Factory a fixed amount of $5,000 in damages for the loss of the Gibson.
You must return the Gibson in its original case, as given to you. If you fail to return the Gibson in its original case, you will forfeit your $2,000, and pay a further $500 for inconvenience to the Store.
George never read the terms of the Rental Agreement and none of them were brought to his attention. He paid the upfront $1,200 rental fee, plus the $2,000 deposit. George took the Gibson home in its case. Three weeks later, George lost the case for the Gibson when he was at a party at Johns house. A week later, the Gibson was stolen at a park where George went with John, Paul and Bingo for a picnic. George left the Gibson under a tree while he went for a quick ride on the flying fox. When he returned 6 minute later, he noticed that the guitar was gone.
Question
Advise George whether Music Factory non-complied with any of the provisions of ACL in relation to his circumstances? (10 marks)
Question Three (worth 10%)
John, Paul, George and Bingo were musicians in a band called the Beagles.
One evening Bingo stayed in his luxury apartment in Sydney to watch a television program on 60 Minutes. The program was of particular interest to Bingo as Liz Hayes was interviewing one of his favourite drummers, Bazza Gibbo (Gibbo). Gibbo was in the famous American band call SSIK, which just finished its tour in Australia. The interview was broadcasted live to 50 countries around the world and filmed in the United States where Gibbo lived.
During the interview, Gibbo (to the shock of his fans and Bingo) made an announcement that he was going to retire from being the drummer of SSIK. Gibbo said that he was recently diagnosed with brain cancer and things are not looking good. Gibbo said that upon discovering that he had brain cancer, he set up an online app, called Save Gibbo. During the interview, Gibbo repeatedly asked fans to go to his Save Gibbo App and donate $10, which will go to the Cancer Foundation. Gibbo also asked fans to donate an extra $5 to a young boy named Robbo, who was a friend he met at hospital, who also had brain cancer. With a tear in his eye, Gibbo showed to the camera a photo of Robbo in hospital.
Gibbo also encouraged fans to sign up to an online lifetime membership for SSIK. The membership only costs $300. Each member will receive a free Gibbo sticker and regular updates about SSIK and in particularly about his medical condition. Gibbo also said that members can make money for just being fans of SSIK. Liz asked him how this works. Gibbo replied:
This is simple and fun. Each member will be allocated a unique user ID and be placed in a position in the hierarchy of SSIK members. If that member introduces another 5 people to become members, than that person can move up the hierarchy. Once you reach the top of the hierarchy, your $300 is returned and SSIK will transfer to you another $300 for being such a loyal fan. You may also win a free trip around the world. How exciting is that? I am also asking members that if they wish, they can run their own business as a distributor to sell SSIK merchandise. Any member who wishes to do this and emails a list of 50 prospective customers within the first month of establishment will receive a 50% rebate on all purchases.
Bingo transferred $10,000 to the Save the Gibbo App for the Cancer Foundation and another $50,000 for Robbo. Bingo also sent a private message to Gibbo simply saying: Never give up. Keep rocking forever
One year later, a personal assistant of Gibbo (named Gobbo) went on 60 Minutes for an interview. During the interview, he revealed that Gibbo was a fraud. He was never diagnosed with cancer and only donated only a small portion of the money he received to the Cancer Foundation. No money was ever given to Robbo. In fact, Robbo was never diagnosed with brain cancer, but the photo was taken when he was in hospital to have his COVID vaccination.
Question
Advise Bingo whether Gibbo contravened any of the provisions of ACL? (10 marks)
Question Four (worth 10%)
John, Paul, George and Bingo were musicians in a band called the Beagles.
One day Paul visited his favourite music store called Gee Bees Guitars (Gee Bees). Near a stand was a classic Fender Bass (Bass), which caught his eye. The sign near to the Bass read only $200, but the price tag read $2,200. The sign also read:
Brand New. Australian Made. All materials and components are of the highest quality. Built to last. Best value.
Paul took the Bass to the counter and he was served by the store owner Barry. Paul asked about the price difference between the tag and the sign. Barry responded that the difference in price was clearly mistake and the real price is $2,200 plus GST. Barry added:
This model of Bass is known to have some problems with rattling. There is no manufacturers warranty on this one, nor is there any refund. Do you want to take out an extended warranty for 2 years for only $150?
Paul reluctantly paid the $2,420 for the Bass, but declined on the offer to take out an extended warranty.
Within the first week, the Bass started to make a rattling sound. Paul was surprised to soon discover that the pick-ups for the Bass were damaged.
Paul took the Bass back to Gee Bees and demanded a refund. Barry replied:
I am not responsible for the quality of the Bass. I am only passing on information from the manufacturer. The Bass was working before it left the store. It was only a demonstration model for less than a year.
Look, as I have already told you before you purchased the Bass that there are no refunds. There is nothing I can do about this. I can give you a replacement if you wish, but you will have to wait a month until I order one from the manufacturer in Japan.
Paul made an online complaint to the Australian Competition and Consumer Commission.
Question