Legal Institution and Process

This report discusses the importance of legal institution and process in resolving legal issues. It focuses on a case study involving Best Baby Baths and Klean Kids Pty Ltd, highlighting the efficacy of Australian sources of law. The report also examines the violation of consumer protection laws and contract law by Klean Kids Pty Ltd.

LEGAL INSTITUTION AND
PROCESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................7

INTRODUCTION
Legal institution and process includes the managing of all the legal issues relating to any
of the problem which the company or any person faces. The legal institution is a place where the
person suffering from any of the legal issue can get justice and their problem can be solved1. The
present report will also outline the efficacy of the Australian sources of law and the legal
institutions. This report is based over a case study involving two companies that is Best Baby
Baths and the Klean Kids Pty Ltd.
MAIN BODY
With reference to the case study it is ensure that in such type of situation it is very essential for
the companies to have knowledge relating to the various laws and regulation which can assist the
company in dealing with such type of problem. The legal institution is a regulating body which
assist the people in getting justice and it is very essential for the country to have effective legal
system so that it can provide for better justice for the resident of country. Thus, due to this reason
the Australian legal system and various laws are of efficacy to the country as this will make sure
that the whole country and the residents of the country are having access to the legal system of
the country. For instance, the use of common law in the Australian legal system assist the person
in taking effective decision. Thus, this means that some similar case comes in front of the court
then they can use the same verdict or decision which has taken in the previous case as illustrated
in the existing case. Also, among the sources of law the most powerful and effective source of
law is the laws made under act of Parliament.
Case study overview
Issue: In the present case there is involvement of two company that is Best Baby Baths and the
Klean Kids Pty Ltd wherein the Bill director of Best Baby Baths orders Kon the director of
Klean Kids Pty Ltd to produce 1000 baby bath aids2. But on delivery of products Bill inspects
1 Cairns, B., 2019. Australian civil procedure.
2 Barnes, J., 2018. On the ground and on tap—law reform, Australian style. The Theory and
Practice of Legislation. 6(2). pp.193-224.

the fact that products are not marked with the mandatory warning to be placed on the product. So
they returned the product back to Kon. Now Kon accepted the return as they have a lot of other
contracts with them but the incurred cost of this order was $30000 for Kon. Thus, for this he
placed it online for the selling to other people under the name of Best Baby Baths only and the
account details were of Klean Kids Pty Ltd. By seeing the offer Anton, a sole trader got attracted
towards the advertisement and purchased the order. As he got the order he inspected the product
and analysed that the mandatory warning was non- compliant and this means that company
cannot legally sell the product further to other consumers. Thus, in this case there are many
different rules which are applicable like common law, equity and statue law.
Rule: There are certain rules which are applicable to the given case study. A detailed
analysis of the rules to be applied in the situation are stated. Anton can file the suit against the
Klean Kids Pty Ltd under the Consumer Goods (Baby Bath Aids) Safety Standard 20173. This
law is in respect to the mandatory standards which the company is required to follow. It includes
the product safety warning statement and the complete details in respect to it. These mandatory
updates have been made by the Australian Competition and Consumer Commission (ACCC). It
specifies the baby bath aid and its packaging to have a clear labelling along the safety warning
signal. There are certain signs which is needed to be put on the product such as letters, triangles
or any exclamation marks and all these are required to be in colour that is separately highlighted
to grab the attention. Also, the warning needs to be permanent and legible when tested as per the
clause 7.3 as mentioned in the ASTM F 196-13. Also, there is further other requirement to be
mandatorily required to be followed by the companies before supplying the products in the
market. There is certain requirement in respect to the transitional period and after the transitional
period. As the set standards, the Baby bath aid products is required to have warning statements
written on it. Also, there is a specified form in which it should be written. The warning statement
needed to have letter “WARNING” written in words and must be at least 10mm high and in
uppercase letter other than warning should be 5mm high and the lower case letter should be at
least 2.5mm high. All the letters are required to very clear and legible. Also, each side of the
triangle should be at least 30mm high and all these things are required to be in colour in contrast
3 Niven, C. M. and et.al, 2019. Hazardous children’s products on the Australian and US market 2011–
2017: an empirical analysis of child-related product safety recalls. Injury prevention, pp.injuryprev-2019.

to the background. The warning written is required to be permanent till the life of the product. As
per the law, even the packaging must also display the warning statement.
Also, the case can be filed under the Australian Consumer Law which deals with the
providing protection to the any person or corporation who is involved as a consumer of the
product or services. The Australian Consumer Law provides protection to the consumers in three
categories but only two categories are applicable to the case provided. First is misleading or
deceptive conduct in trade or commerce. The Section 184 of the Australian Consumer Law
prohibits the person in respect to the trade or commerce from involving in the misleading or
deceptive conduct. It not only relates to the supply of products and services but also wide
economy wide of norms of conduct. The misleading and deceptive conduct5 is mainly subject to
certain remedies which includes injunctions, damages and compensatory orders. This section
creates certain norms for the conduct of the business and also allows the people to get remedies
in respect to the harm which is caused for the breach of the norms rather than attracting punitive
sanctions.
The section 206 of the Australian Consumer Law which states about the prohibition
imposed on the unconscionable conduct and this has been developed from the common law and
the principles of equity. Also, Section 21 of the Australian Consumer Law prohibits
unconscionable conduct7 in relation to the supply of the products and services to a person or the
acquisition of the same in the business transaction. Both these sections are not bound by the
common law or the equitable principles. Remedies available under this law includes injunctions,
damages, compensatory orders and the others like nonpunitive orders and so forth. There is also
civil pecuniary penalty which can be extended to maximum of $1.1 million in case of the body
corporate and $220,000 other than body corporate along with the disqualification orders, redress
for non-parties and the public warnings.
4 Bianchi, L., 2018. Consumer law: Changes to Australian consumer law: Key benefits for vulnerable
consumers. LSJ: Law Society of NSW Journal. (50). p.71.
5 Bant, E. and Paterson, J., 2019. Should Specifically Deterrent or Punitive Remedies be made Available
to Victims of Misleading Conduct under the Australian Consumer Law?.
6 North, J. and Flitcroft, R., 2016. Businesses beware When does the Australian Consumer Law
apply?. Governance Directions. 68(5). p.306.
7 Burdon, T., 2018. When the company line is unlawful: An overview of systemic unconscionable
conduct. Bulletin (Law Society of South Australia). 40(9). p.22.

The contract law seems to be violated which is governed by the common law. As it refers
to the agreement between two parties with the intention to create a legal relationship which
includes certain consideration for the offer. Not following any of these conditions makes the
contract void. Also, in the situation when offeror uses the name of another person or company
without consent is actually dos not make a contract. This is considered as the void as all the
required conditions are not met as per the contract law.
Application: After carefully analysing the given case study it has been determined the
application of the above stated rules based on the situation presented in the case study. Based on
the Consumer Goods (Baby Bath Aids) Safety Standard 2017, under the Australian Competition
and Consumer Commission (ACCC), the Klean Kids Pty Ltd. has violated the standards set. It
has not complied with the mandatory requirements stated under it with respect to the product
labelling. Klean Kids Pty Ltd. has not followed any of these requirements there it is subject to
law suit under the Australian Competition and Consumer Commission (ACCC). It has been
discovered that the mandatory standards were not permanently marked along with the
requirement of warning statement. Being aware of the same, Klean Kids Pty Ltd sold it online
and used regular ink to put on the labelling which makes it illegal to sell it out further.
The company has also violated the contract act as it has used the name of Best Baby
Baths as it has provided the contact details of the Best Baby Baths and put the payment account
details of the Klean Kids Pty Ltd which accounts for the breach of the contract as it has used the
name of the company without its permission which makes the contract void.
Section 18 of Australian Consumer Law is also applicable as the Klean Kids Pty Ltd has
entered into a misleading or deceptive conduct and the use of unfair trade practices. As it has
used the name of Best Baby Baths while dealing with Anton for the selling the products. This
can be considered as unfair practice as using the name of another company without its consent.
Also, it is a breach of contract for selling the product to the Anton by providing false
information. It has also invited application of section 20 and 21 for unconscionable conduct in
the business. Being aware of the mistakes in the product the Klean Kids Pty Ltd made the deal
with Anton in order to recover the cost of the products being returned by the Best Baby Baths.
This shows that the company has used harsh business practices while dealing with the consumer
(Anton).

Therefore, all these rules are applicable to the Klean Kids Pty Ltd as per the information
provided in the case study. It also seems to have a serious and long term effect over the Klean
Kids Pty Ltd on account of activities being carried by it.
Conclusion: Based on the rules, the it is likely that the court will account for all these points
as they are all very relevant to the case. Klean Kids Pty Ltd will face the serious consequence as
specified in the enforcement and remedies created by Australian Consumer Law. Therefore, the
company is liable to injunction, damages, penalties and notices and even trial. The section 21 and
22 of Australian Consumer Law provides the penalty of $1.1 million in case of the body
corporate and $220,000 for any other person. The company also be summoned notice and should
be given public warning. All these actions if taken by the court will have a negative consequence
over the business. But the court will actually consider this as the company has actually
CONCLUSION
It can be summarized from the above that the legal system in Australia is well established in
respect to the consumer protection which can be another business or an individual. The step
taken by Best Baby Baths is right by returning back the goods on suspecting the breach of
meeting up with the regulatory requirements. But, the Klean Kids Pty Ltd being afraid of losing
the money tried to sell out the goods through an online auction site by providing wrong
information to the consumers. This makes the process even more complicated for it. But again, it
caught red handed in its attempt. Based on all this, the company has prohibited or breached the
many laws which will have a negative consequence over its business both in terms of financial
and non-financial making the situation even worse for the Klean Kids Pty Ltd. Therefore, it is
always recommended to follow the rule and regulations.