Deck 11: Dealing With Consumers

Question 1

In the history of the common law, the first major legislative step away from the philosophy that caveat emptor ought to be at the foundation for the law governing consumer transactions was:

A)the UK Sales of Goods Act 1973.
B)the UK Sale of Goods Act 1893.
C)the Trade Practices Act 1974 (Cth).
D)the Trade Practices Act 1873 (Cth).

Answer 1

B

Question 2

The consumer protection movement can best be described as:

A)a social movement that began in the 1970s with the aim of securing women's rights.
B)a political movement that began with an uprising in 19th century England in which people rallied to bring manufacturers to account for contaminants in their food and drink (e.g.snails in ginger beer).
C)a movement that developed in the Courts in the 17th and 18th century that was designed reduce the importance of written contracts and give courts unlimited power to decide the outcome of consumer transactions.
D)a movement that gained momentum in the 1970s with the aim of limiting the scope for businesses to exploit consumers.

Answer 2

D

Question 3

An extraordinary number of people are keen to buy toilet brushes from Brunnings warehouse on Saturday morning when they are advertised at $1 each on television.Which of the people named below would be regarded as a consumer under the Australian Consumer Law (ACL)?

A)Pampered Patti, a rich Indonesian hotelier's daughter who purchases $3000 worth of brushes for use in the many bathrooms of her Gold Coast apartments and resorts.
B)Domestic Dora, who purchases 5 toilet brushes which she plans to use to scrub cobwebs and dust from inside of the pile of metal pipes and car bodies her husband has collected in his mechanic shop.
C)Flaky Flora who intends to spray-paint 200 of the toilet brushes (together with some ornate birdcages and live doves) in gold leaf and hang them, like foliage, from the ceiling of her wedding reception marquee.
D)Entrepreneurial Eddie, who purchases $420 worth of toilet brushes to use in the automatic rotary toilet cleaning machine he has invented.

Answer 3

C

Question 4

Which of the following types of legal action would a consumer be least likely to bring in respect of an incident of misleading and deceptive advertising?

A)The tort of deceit.
B)Infringement of ACL s 18.
C)Breach of contract.
D)The tort of nuisance.

Question 5

Until the late 20th Century, consumers:

A)had few special protections at law.
B)were a privileged group.
C)were well served by the common law.
D)had a wide range of useful and accessible common law remedies.

Question 6

What made caveat emptor a poor idea on which to base the law regulating consumer transactions in the 20th Century was the fact that true equality of bargaining power between buyers and businesses had become:

A)commonplace.
B)rare.
C)unnecessary.
D)impossible to achieve unless both parties spoke Latin.

Question 7

The Australian Consumer Law is not:

A)a result of the conclusions reached in the 2008 Productivity Commission's report, Review of Australia's Consumer Policy Framework.
B)a Commonwealth law.
C)current law.
D)constitutionally invalid.

Question 8

In the 17th and 18th centuries, rather than being concerned with protecting consumers specifically, the judiciary had other priorities.Which of the following issues might be said to have been of a relatively low concern to judges dealing with business related disputes in that era?

A)Promoting stability and consistency in the law by applying the rules of precedent.
B)Protecting the freedom of individuals to contract on whatever terms they saw fit in confidence that the Courts would honour their bargains.
C)Ensuring that individuals were protected from the consequences of their own poorly informed choices.
D)Ensuring the free, efficient flow of trade and commerce by creating an environment in which legal outcomes were predictable.

Question 9

Engaging in 'conduct' within the meaning of s 18 of the Australian Corporations Law:

A)means doing an act.
B)can sometimes mean simply remaining silent.
C)does not include making a promise.
D)refers only to conduct that is intentional.

Question 10

Most of the rules regulating advertising and selling to consumers are now found in:

A)the Constitution.
B)the Australian Consumer Law.
C)the Trade Practices Act 1974 (Cth).
D)the Australian Securities and Investment Commission Act 2001 (Cth).

Question 11

ASIC is a statutory body responsible, amongst other things, for:

A)drafting legislation designed to promote competition and fair play in the market place.
B)monitoring compliance with Australian corporations law.
C)promoting competition and fair play in the marketplace.
D)drafting legislation designed to ensure compliance with the consumer law.

Question 12

Which of the following ideas or facts does not offer grounds to support the conclusion that our society needs strong consumer protection laws?

A)The idea that if people are unwise enough to enter into bad business deals then they ought to be responsible for the outcomes of their choices.
B)The fact that in modern times there is generally a gross inequality of bargaining power between consumers and the business organisations they deal with.
C)The fact that common law rules are usually too complex and limited to be of real help to a consumer who is in dispute with a business.
D)The fact that the number of consumer transactions have generally increased in recent years.

Question 13

Which of the following requirements does not need to be satisfied in order to establish a breach of s 18 of the Australian Consumer law?

A)That there has been conduct.
B)That the conduct was misleading and deceptive.
C)That the conduct would have been likely to mislead the 'reasonable person'.
D)That the conduct was in trade or commerce.

Question 14

The Australian Competition and Consumer Commission (ACCC) seeks primarily to:

A)promote international free trade agreements and multinational corporations, and build monopolies in Australia.
B)administer the Competition and Consumer Act (CCA) and Australian Consumer Law (ACL) and promote competition and fair play in the marketplace.
C)administer Commonwealth, State and Territory consumer protection laws and promote competition and fair play in the workplace.
D)ADVOdCATE for consumer rights groups and promote free market economics.

Question 15

Most of the rules regulating marketing and selling to consumers can now be found in:

A)the Australian Consumer Law ('ACL') enacted in 2010.
B)the Trade Practices Act 1873.
C)the Australian Securities and Investments Commission Act 2001 (Cth).
D)the Sale of Goods Act 1893 (Cth).

Question 16

Caveat emptor is a Latin maxim meaning:

A)let the buyer beware.
B)let the buyer be alert
C)let the buyer be responsible.
D)the law does not concern itself with trifles.

Question 17

Courts in the 17th and 18th century were far less willing than they are today to interfere with a bargain struck by two parties.There were a number of reasons for this.Which of the following is least likely to have been one of them?

A)The courts were not aware that this approach frequently led to injustice in particular cases.
B)With fewer laws to regulate behaviour in those times, there was little but the contract from which they could draw guidance as to how to resolve a dispute.
C)There was a real risk of social conflict and chaos if citizens, and the courts, could not be relied upon to uphold bargains.
D)Contract terms in that era were more likely than in modern times to be individually negotiated and, in that sense, consumers had a more real chance of being able to protect their own interests.

Question 18

The Competition and Consumer Act 2010 (Cth) was previously called the:

A)Trade Practices Act.
B)Sale of Goods Act.
C)Consumer Protection Act.
D)Australian Securities and Investment Commission Act.

Question 19

Section 18 of the Australian Consumer Law prohibits misleading and deceptive conduct.It is one of the most commonly used provisions in Australian law because it has very broad application.Which of the following is not a reason that it is so often relied upon?

A)Liability under s18 cannot be avoided by the use of a disclaimer.
B)The court may find a contravention under s 18 to have occurred even if the defendant believed it was acting honestly and reasonably.
C)In assessing the whether the conduct was misleading under s 18, a lower standard is required than the usual 'reasonable person standard'.
D)In assessing the conduct of a defendant, the Court considers the standard owed to an 'unsuspicious modern member of the community'.

Question 20

Which of the following is not required to be proven to establish that conduct has infringed s 18 of the Australian Consumer Law?

A)That there has been conduct in trade or commerce on the part of the defendant.
B)That the defendant has done a positive act.
C)That the act was misleading or deceptive or likely to mislead or deceive.
D)That the conduct was in trade or commerce.

Question 21

Which of the following is most likely to be a pyramid scheme?

A)A scheme involving a single product and many distributors
B)A scheme involving a single product and a single distributor
C)A scheme involving many products and many distributors
D)A scheme involving many products and a single distributor

Question 22

Which of the following is most likely to lead to unconscionable conduct by a business when dealing with consumers?

A)Training staff about fair trading and anti-discrimination laws.
B)Employing staff members who lack tertiary qualifications.
C)Disclosing any important or unusual terms to customers.
D)Rewarding staff for pressure based selling.

Question 23

A business that fails to comply with its own privacy policy:

A)commits a crime.
B)is behaving unethically but not illegally.
C)is engaging in misleading or deceptive conduct.
D)is negligent.

Question 24

The Australian Consumer Law Part 3.3 regulates the safety of products sold to consumers.Goods that do not comply with a safety standard or may be dangerous may be subject to a compulsory recall notice.The issue of this notice generally does not mean that the business must:

A)provide a refund or exchange.
B)recall the goods.
C)notify the public about its plans for the goods.
D)destroy the goods.

Question 25

'Unconscionable' for the purpose of ss 20 and 21 of the Australian Consumer Law means:

A)harsh.
B)unfair.
C)dishonest.
D)ignorant.

Question 26

Which of the following is not a means of enforcement of the ACL?

A)The business offering the ACCC an enforceable undertaking.
B)The ACCC issuing a substantiation notice.
C)The ACCC issuing a public warning notice.
D)The business offering the ACCC a secret commission.

Question 27

Unconscionable conduct is not clearly defined in ss 20 and 21 of the Australian Consumer Law.Section 20 however, provides that unconscionable conduct should be assessed in accordance with the 'unwritten law'.This suggests that unconscionable conduct in general terms means:

A)causing another to believe what is false.
B)unfairly taking advantage of another's weakness or vulnerability.
C)unfairly engaging in conduct that reduces competition.
D)leading another astray or into error.

Question 28

Section 23 of the Australian Consumer Law is concerned with the use of unfair terms in contracts.The section applies to:

A)all contracts.
B)all written contracts.
C)all consumer contracts.
D)all standard form consumer contracts.

Question 29

ACL Part 4.1 sets out the penalties associated with various contraventions of the ACL.Many penalties are imposed on a 'strict liability' basis.This means that:

A)an element of moral fault or a particular intention on the part of the defendant need not be proven.
B)the Court has no choice about the remedies that are to be applied.
C)no defences are available to the defendant.
D)if the defendant is found liable the penalties are automatically doubled.

Question 30

The remedies offered under the Australian Consumer Law for contravention of the ACL are:

A)broad and varied in range.
B)narrow and limited in range.
C)damages and injunction only
D)always punitive in nature.

Question 31

Section 25 of the Australian Consumer Law sets out examples of contract terms that are unfair.The general effect of this long and detailed provision is that a contract term will generally be considered to be unfair when:

A)it is a standard term.
B)it is long and technical.
C)it permits one party to unilaterally exercise rights and privileges of a kind or scope that the other does not have.
D)it permits the business to unilaterally exercise particular rights and privileges that the consumer does not like.

Question 32

The Queensland Premier tells Queenslanders on television after the Queensland Cultural Centre (QCC) is destroyed during a performance of Benjamin Keller's Opera (in which the phantom reveals himself to be a suicide bomber) that the Cultural Centre can be rebuilt in three months.This comment is untrue.Experts, politicians and lay-people everywhere agree that the Centre cannot conceivably be rebuilt for at least 5 years.Businesses near the QCC suffer economic loss as a result of the Premier's misrepresentation.Has s 18 of the Australian Consumer Law been contravened?

A)Yes, because the Premier told a lie.
B)Yes, because the Premier has not engaged in 'conduct'.
C)No, because the Premier's words were not 'misleading and deceptive'.
D)No, because the Premier's speech was not 'in trade or commence'.

Question 33

If a person has engaged in unconscionable conduct under s 21, a court will not apply the provision if the person is:

A)a listed public company.
B)a small private business.
C)a large private business.
D)a medium-sized business.

Question 34

A statement of opinion will only be misleading or deceptive under s 18 of the Australian Consumer Law if:

A)It contains a representation of fact that is misleading or deceptive.
B)It is negligently made.
C)It is based on a distortion or exaggeration of the truth.
D)It contains expert opinion, or is advanced by an expert.

Question 35

Which of the following is prohibited under the Australian Consumer Law?

A)Referral selling
B)Unsolicited consumer agreements
C)Pyramid schemes
D)Mail order sales

Question 36

Which of the following cannot be said of the consumer guarantees implied into consumer contracts by the Australian Consumer Law (ACL)?

A)They are implied into every consumer contract by the ACL.
B)They include guarantees as to the title of the goods, their quality and fitness for their purpose.
C)They apply to standard form contracts only.
D)The implied terms cannot be excluded or overridden by a business.

Question 37

According to s 23 of the Australian Consumer Law, a contract term will be unfair if three elements are satisfied.Which of the following requirements is not one of these?

A)The term causes a significant imbalance between the two parties' rights and obligations under the contract.
B)The term is unconscionable or misleading and deceptive.
C)The term would cause detriment to the consumer
D)The term is not reasonably necessary to protect the legitimate interests of the consumer.

Question 38

In considering whether a contract is unfair under s 24(2) of the ACL, the Court will consider the extent to which the term is:

A)transparent.
B)latent.
C)unconscionable.
D)misleading or deceptive.

Question 39

If a business fails to take reasonable steps to protect any personal information it holds from misuse or unauthorised access, it is in breach of:

A)APP2.
B)APP11.
C)APP3.
D)APP7.

Question 40

For conduct to be misleading and deceptive under s 18 of the Australian Consumer Law (ACL) it need not be conduct that is:

A)likely to lead astray, lead into error or cause others to believe what is false.
B)misleading or deceptive based on an objective test.
C)misleading or deceptive to members of the target audience.
D)misleading or deceptive to the 'reasonable person'.

Question 41

Dana runs Very Vintage, a dress shop that advertises itself as a shop that only sells elegant second-hand garments.A customer has discovered that Dana has been selling brand-new clothes imported from China.In breach of ACL s 29 Dana has made a false representation:

A)that her goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use.
B)that her services are of a particular standard, quality, value or grade.
C)that her goods are new.
D)concerning the place of origin of her goods.

Question 42

A manufacturer is not liable for a 'safety defect' under ACL Part 3-5 if:

A)the safety defect relates to the packaging of goods.
B)the safety defect relates to the way the goods are marketed.
C)the safety defect did not exist at the time the goods were manufactured.
D)the safety defect exists because the manufacturer failed to comply with a mandatory standard.

Question 43

A business can only use or disclose sensitive information about an individual for the purposes of direct marketing under the Privacy Act 1988 (Cth) if:

A)the individual has 'opted out' and therefore doesn't mind the information being disclosed or used.
B)the individual has consented to the use or disclosure of the information for that purpose.
C)it does not tell the individual.
D)the individual cannot be told the information is being used because the information is of a sensitive nature.

Question 44

Which of the following penalties will result if a company deliberately breaches one of the specific prohibitions in the ACL?

A)The company must pay a maximum fine of $1.1 million.
B)The company's directors and employees will be imprisoned for 1 year.
C)The company will be liquidated.
D)The company must not trade for a period of one year.

Question 45

If goods are defective under ACL Part 3-5, which of the following will result?

A)The manufacturer must give the consumer a new set of goods.
B)The manufacturer must publicly apologise to the consumer.
C)The manufacturer is strictly liable for any injury to the consumer or for damage caused to their property resulting from the defective goods.
D)The manufacturer is not liable to the consumer.

Question 46

Which of the following is not true of the Privacy Act 1988 (Cth)?

A)It applies to all businesses with an annual turnover of $3 million or more.
B)Activities relating to journalism are exempt from its provisions.
C)Activities relating to a person's employment history are exempt from its provisions.
D)It does not apply to businesses that provide a health service.

Question 47

Bill runs a restaurant called 'Meat Lovers'.The following events occur on 27 May 2020.At which point has Bill acted 'unconscionably'?

A)At 6 am, he gets into a heated argument with a beef supplier over the price the supplier is charging.
B)At 11 am, he tells one of his waitresses that he has to fire her because she is incompetent.
C)At 3 pm, when a visually impaired customer asks Bill for the cheapest item on the menu, he recommends the most expensive dish available.
D)At 7 pm, he throws a pan of poorly cooked spaghetti at the restaurant's chef, narrowly missing him.

Question 48

Which of the following activities are not necessarily exempted from the operation of the Privacy Act 1988 (Cth)?

A)The journalism activities of media organisations.
B)Acts done by employers that are directly related to the employment of new employees.
C)Credit information handled by credit providers and credit reporting agencies.
D)The activities of businesses with an annual turnover of less than $3 million.

Question 49

Which of the following situations is most likely to be considered misleading or deceptive conduct in breach of ACL s18?

A)An advertisement for a fast food outlet's latest Happiest Meal has a large picture of a toy beside the burger.However, no toy comes with purchase of the burger.
B)An advertisement for a hair salon has a pretty young woman in a staff uniform posing in the picture.The pretty young woman is not a member of the salon's staff.
C)A home improvement store proudly proclaims outside its shop 'Cheapest prices you will find in Melbourne!' A customer has found the same set of repair tools going for half the store's retail price in Brisbane.
D)A fish shop prominently displays a large poster of its latest guppies imported from Africa.The image of the guppies on the poster is 2 metres in length.The actual size of the guppies is 1.5 centimetres.

Question 50

According to the decision in Taco Company v Taco Bell, which of the following will not be considered by the court in determining whether or not conduct is 'misleading or deceptive'?

A)The level of education of the relevant section of the public.
B)Which section of the public is affected by the conduct.
C)The level of intelligence of the relevant section of the public.
D)Whether a reasonable person would be misled by the conduct.

Question 51

Esther is an events promoter.She advertises that 'John Legend' will be performing at a concert.Tickets are sold out in a matter of hours.On the night of the concert, the famous singer John Legend does not perform.Instead, another man named John Legend sings for the crowd.Has Esther breached the ACL?

A)No, because Esther has told the truth.
B)Yes, because Esther has engaged in unconscionable conduct.
C)Yes, Esther has engaged in misleading or deceptive conduct.
D)Yes, Esther has engaged in pyramid selling.

Question 52

The right to privacy is described in the Universal Declaration of Human Rights as follows: 'No one shall be subject to _____ interference with his privacy, family, home, or correspondence.' What is the missing word?

A)any
B)uninvited
C)unnecessary
D)arbitrary

Question 53

Cyril is a customer service officer at a mobile phone company.Jane is interested in a mobile plan.After Cyril explains the Super Value price plan to her, Jane exclaims, 'So I'll have unlimited text usage! I can message my friends all day, every day without paying a cent! I'll sign up right now!' Cyril knows that the plan only provides users with 50 free text messages a month but says nothing to Jane.One month later, Jane's phone bill is $2000.Has the mobile phone company, as a result of Cyril's actions, breached ACL s 18?

A)Yes, all three requirements of s 18 have been satisfied.
B)No, Cyril has not 'engaged in conduct'.
C)No, Cyril's conduct was not 'in trade or commerce'.
D)No, Cyril's conduct was not 'misleading or deceptive'.

Question 54

Thomas has noticed that his local drycleaner is placing advertisements promising 'Clothes so clean, you'll beam!' within an hour.However, every article of clothing he has sent to the drycleaner has been returned a week later with the same stains on them.Thomas' neighbours have the same complaints as well.Thomas is concerned about the conduct of the company.Which of the following is generally not an option available to Thomas?

A)Thomas can seek the help of an industry ombudsman.
B)Thomas can prosecute the company under the ACL.
C)Thomas can lodge a complaint with the ACCC.
D)Thomas can commence civil proceedings against the company for breach of ACL s 18.

Question 55

Fred convinces Greg and Harry to help him sell his homemade mango juice.Which of the following indicates that Fred has set up a pyramid scheme?

A)Fred promises to pay them $10 each for every $100 worth of juice that they sell.
B)Fred charges Greg and Harry $100 to join the selling scheme, and promises them $10 each for every person they convince to join the scheme as well.
C)Fred charges Greg and Harry $100 to join the selling scheme, and promises to pay them $10 each for every $100 worth of juice that they sell.
D)Fred promises to pay them $10 each for every new customer they find.

Question 56

Adam owns a second hand car yard.In which of the following transactions is Adam not a 'consumer' within the meaning of the ACL?

A)Adam buys petrol from Caltex to fill up his own Volkswagen Beetle.
B)Adam buys a second-hand Toyota for his son from a used-car dealer.
C)Adam buys a Volvo in order to sell it in his yard.
D)Adam buys a Ferrari as a wedding anniversary present for his wife.

Question 57

Harley Roman Cookware advertises in the newspaper that its portable ovens are on sale for $10 each.The shop only has 3 such ovens in stock.This appears to be an example of:

A)offering gifts or prizes without intending to supply them.
B)accepting payment without intending to supply the goods.
C)bait advertising.
D)pyramid selling.

Question 58

What are the 'Australian Privacy Principles'?

A)Internationally recognised privacy standards.
B)Aspirational privacy goals.
C)Privacy prohibitions.
D)Australia's minimum privacy standards.

Question 59

Which of the following is not true about the Australian Privacy Principles?

A)They apply to most businesses in Australia.
B)They protect both personal information and sensitive information.
C)They are designed to ensure that businesses use information about individuals responsibly.
D)It is generally necessary for businesses covered by the Act to comply with them.

Question 60

A business is not prohibited by the ACL from supplying goods:

A)declared to be unsafe.
B)that have been permanently banned.
C)that do not comply with the relevant product safety standard.
D)that are advertised using exaggerated claims about the goods.

Question 61

APP3 of the Privacy Act 1988 (Cth) concerns the collection of solicited personal information.A business must not collect sensitive information about an individual unless:

A)the information is known to the individual.
B)the information is necessary to understand the individual's personal circumstances.
C)the individual is over 18.
D)the individual consents and the information is reasonably necessary for one of the activities or functions of the business.

Question 62

According to APP2 of the Privacy Act 1988 (Cth) individuals must have the option of dealing with businesses anonymously or through the use of a:

A)pseudonym.
B)proxy.
C)family name.
D)given name.

Question 63

APP1 to APP10 of the Privacy Act 1988 (Cth) set out the obligations of businesses with respect to the collection of personal and sensitive information.These rules do not provide that:

A)a business can collect personal information when it is necessary.
B)a business should collect information directly rather than indirectly.
C)a business should not make the individual aware that it is collecting such information.
D)a business needs special permission from an individual to collect sensitive information.