Business Corporations, Australian Consumer Law: A Detailed Case Study

This case study analyzes a scenario involving Australian Hairlines and potential breaches of Australian Consumer Law (ACL) regarding misleading advertising and contract obligations. It discusses the rights of consumers who were exposed to a promotional offer and the company's responsibilities in honoring the advertised terms. The analysis covers key aspects of contract law, misleading conduct under Section 18(1) of the ACL, and the implications of bait advertising. It also addresses the potential actions consumers can take, including reporting to the Australian Competition and Consumer Commission (ACCC). The study further explores the business owner's (Ming's) responsibility in managing special offers and avoiding disputes with customers, highlighting the importance of clear communication and financial planning in business operations. The document provides references to support its legal and business arguments.

BUSINESS CORPORATIONS AND LAW 1
Business Corporations and Law
Student’s Name
University Affiliation
Date

BUSINESS CORPORATIONS AND LAW 2
(a)
A contract is acceptable enforceable agreement existing between either two or
more parties in which each party assumes licit obligation that in all means must be
completed. Legal issues must arise between Australian Hairlines and its customers.
Australian Hairlines fail to meet the obligation they stated on their advertisement.
Australian Hairlines breaches a contract with customers but fail to perform. Customers
have every right to sue Australian Hairlines for not performing as promised. In some very
limited cases they can request the court to force as it promised. This contract between
customers and Australian Hairlines can be a source of dispute because they fail to state it
clearly. Additionally, they can sue each other and the argument can be settled. Customers
will pursue legal action to obtain relief. The law is very clear that it is illicit to make
advertisement that are incorrect or most likely to create untrue impression. The
consumers in Australia are protected from any misleading information. Section 18(1) of
Australian consumer law states, “A person must not, in trade or commerce, engage in
conduct that is misleading or deceptive or is likely to mislead or deceive” (Corones,2012)
Australian state and Federal laws are very clear. Any service provider should only
offer services or goods at any special price if they have decided for a reasonable specified
period unless they state clearly whether services or goods are in short supply for a very
limited time. The forty consumers in Australian Hairstyle saw the advert and the time
was not specified. They have every right to claim the offer. This advert is the one for bait

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advertising. Bait advertising is very illegal activity of advertising specific prices on
services and goods which are only available for limited time. The limit is not disclosed
Cleary. This will be taking unfair advantage on customers.
(b)
The ten customers have every right to claim for the promotion. This is simply
because they are also customers. Whether they are aware of the advert or not, they have
right to be informed so longest the validity of the promotion is still on. Each customer has
the right to receive truthful and accurate information about the services. Australian
consumer laws do not allow Australian Hairline to make incorrect false statements which
leads to false impression. This is cheating on consumers. The advert is considered
misleading and deceptive regardless of whether it is clarified later. The information from
the consumers who heard about the promotion is sufficient for the other ten consumers to
claim for the offer. Australian Hairlines uses misleading, untrue or confusing to promote
their target customers. The Australian consumer laws protects consumers from
unprofessional activities by the service providers with an aim of promoting and
advancing the consumers economic welfare. The consumers can report to Australian
Competition and Consumer. The laws to protect consumers from being misled are put in
place. (Corones & Clarke,2011)
A business, Australian Hairline in this case is not allowed to make false
entitlements about fake promotion with no validity. In recognition of consumers rights
The Australian Consumer Law was formed to address the issues affecting consumers as
well as to protect consumers from unscrupulous traders. The ten customers should inform

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the Australian Hairlines about the advertisement they made. If they fail to cooperate, they
can report to Australian Consumers laws.
(c)
There is no way that Ming will argue about the low price. The advert is there in
local news paper and most customers visiting Australian Hairline is aware of ten dollars
for each person that is after service. Ming is supposed to assume all the loses incurred in
the business. Ming should consider a lot of factors before giving out offers. Could have
consider financial capability. This helps to know the level of risk to take and handle. The
business should be stable enough to avoid any unpredicted loses. Ming should understand
that offers are use show appreciation to customers but not to retain them. Additionally,
special offers should be given when a stable foundation has been attained. Special offer
strategy should be implemented when one has established enough customers which are
very loyal. No need for Ming arguing with customers. Ming had enough time before
making conclusion about the advert. One must be very careful on how to announce
special orders. Ming arguing with customers does not make sense. Should have come up
with different methods on how to reduce and minimize effects of special offers on bottom
line. (Carter & Chan,2019).
Believing in himself that he has withdrawn the advert is never correct. The advert
will remain in a local newspaper and several customers will come across. This will make
Ming liable to the advert. He should advertise again on that the special offer has come to
an end at a given time. This will be correct.

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References
Carter, J. & Chan, L. (2019). Contract and the Australian consumer law. Alexandria, NSW: The Federation Press.
Corones, S. & Clarke, P. (2011). The Australian consumer law : commentary and materials. Rozelle, N.S.W: Thomson
Reuters (Professional) Australia Limited.
Corones, S. (2012). The Austalian consumer law. Rozelle, N.S.W: Lawbook Co