Business Law Report: Case Studies on Consumer and Civil Liability

This report provides an analysis of two business law case studies. The first case examines a consumer's rights regarding a manufacturer's warranty on a refrigerator that malfunctions after the warranty period, discussing the applicability of the Australian Consumer Law and the concept of warranties against defects. The second case involves a cyclist injured in a collision with a car at night, exploring issues of negligence, contributory negligence, and the defenses available under the Civil Liability Act 2003. The report highlights key legal principles, including consumer guarantees, types of negligence, and the importance of exercising reasonable care, concluding that the store was not at fault and that the driver could use contributory negligence as a defense.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business law is a part of the legal system prevailing in the country. Provisions related to
commerce are included in this and it comes under Civil law. Commercial transactions are
governed by this by following which an entity is run and managed (Clarkson, Miller and Cross,
2014). Non-compliance with applicable legal provisions of this statues, there are punishments
and strict actions which can be awarded. Hence, management should avoid making default in
abiding the legislations. This report is based on two case studies which are solved by explaining
the provisions which can be applied and find a conclusion.
MAIN BODY
Question 1
In this case, James buys a new refrigerator for an amount of $1000 and receives 'one-year
manufacturer warranty'. However, the motor stops working after one year and two months to
which James goes to the store for a replacement but was denied due to the expiry of warranty
period.
Warranty is a promise from the manufacturer or similar parties to assure or guarantee the
quality of the product or service. In most of the case it is available in writing to avoid any future
disputes. It contains clause either to repair or replace the defective goods. Australian Consumer
Law provides that when a product or service it bought, the warranty promise becomes a right
which can be legally enforced. It is different from guarantees as expiry of warranty period does
not affect a guarantee.
There are different types of warranties such as common warranty which is actually an
extra promise made verbally or in writing about product quality. Extended warranty is offered by
retailers to make the customer extend their time limit of the manufacturer's warranty. It comes
with additional protection beyond the original warranty (Types of warranties, 2012).
In the given case, manufacturer warranty or warranty against defects is given. A company
usually make such promise to customers buying the goods. It can be made at the time of
purchase or delivered. Furthermore, the conditions included in this are repair or replace, resupply
or correct the problem with service or to provide compensation. The parts of goods is also
covered in this warranty. One of the most significant feature is that this warranty is limited by
time. It has some specifications that should be there in this warranty and these are language used
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must be simple and intelligible, name of warrantor, address of the concerned business, phone
number, email address. Furthermore, the time limit should be clearly along with procedure and a
statement of the warranty.
Apart from this, suppliers or manufacturers are under legal duty to comply with the
conditions of warranty against defects. In case of failure to do so, legal actions can be brought
against the defaulter. It can also be made a case of breach of contract. In addition to this, even if
no such warranty is mentioned in the formal document, then also the manufacturer is liable to
take the steps elaborated above (Ramsay, 2012).
It is an additional warranty which is not mixed with consumer guarantee. In other words,
every buyer on buying goods or services get this warranty irrespective of any guarantee. The
manufacturer warranty applied even when something is written on the packaging. It is a
sufficient evidence to ask for repair, refund or replacement.
On the application of these provisions in the case of James, it can be said that the
manufacturer's warranty period has expired as it was for one year only. It is clearly mentioned in
the laws of Australian Consumer Law that warranty for defects is up to the time stated in the
contract. According to this provision, in no case James can have replacement as the motor
stopped working after one year and two months. The department store is not at default as it has
complied with the clauses provided in the contract and the denial to replacement is absolutely
valid and legal.
However, James still have consumer guarantee which means certain rules are there which
are applied to goods and services bought by customers under Australian Consumer Law. As per
these rules, the company which has sold the product is required to provide a remedy and this
guarantee applies automatically in case any warranty has been expired. However, there are some
conditions for this which should be met for claiming the guarantee.
Question 2
This case study is about a person named Jason who is riding bicycle at night without
lights also, there are no material or piece of cloth reflecting cautious. He is riding in the middle
of the road he collides with Sarah. Sarah is also driving within the permissible limit and is
attentive throughout her driving. The accident causes injuries to Jason to which he brings legal
proceeding by stating that Sarah was negligent.
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Negligence is defined as failure to exercise care or attention resulting in injury or damage
to another person or party. It is a matter of civil law which is done without any intention. It is
accidental in nature which a reasonable person would never do. The injury or damage can be
physical or property damage and includes issues related to businesses. There are different types
of negligence which should be understood so that right claim can be obtained.
Gross negligence is the one in which a party has been completely careless or failed to
show attention fort the safety of others. It is considered as the most serious kind of negligence.
Comparative negligence refers to the situation where a person is not entirely but partially or to a
certain limit responsible to pay the damages. Contributory negligence is the one in which the
damage is caused by the person himself. There is no provision to get damages at any condition.
In other words, the responsibility of the individual can be partially. Vicarious liability is when
the defendant is held responsible for the actions of another person or party. It is generally occurs
in the cases where incidents have been occurred due to animal attack.
In order to prove a negligence under Civil Liability Act, 2003, the plaintiff is under an
obligation to provide that defendant had as duty of care, breach in duty due to which damage is
caused. In this case, Sarah was being careful with her driving as the roads were dark and she was
worried about collision. Sarah has been wrongly put in this case as she was being vigilant.
Hence, in such a scenario there are number of defences available which can be opt by Sarah
(Civil Liability Act, 2003. 2016).
Obvious risk occurs when there is no requirement of providing warning to the plaintiff
without the a request, obligation under law or in case defendant is a professional other than a
doctor. It is known as with this name because of its application to any person in the position of
plaintiff. Inherent risk refers to the one in which there is no liability of defendant for the damage
suffered by the plaintiff due to the reason of materialisation of inherent risk. Such risks cannot be
prevented with the exercise of reasonable care and are actually beyond the control of a person.
Voluntary assumption of risk allows the defendant to avoid liability by forming voluntary
assumption of risk by the plaintiff. The defendant must produce the plaintiff was aware about
about the risks involved, had a full appreciation and comprehension of the nature and extent to
the risk and voluntarily accepted the complete risk. Contributory negligence is the one in which
failure has been caused by plaintiff due to lack of exercising reasonable care for own safety in
such events which contributed to the accident.
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In the given case, Sarah can use contributory negligence as a defence in which she can
provide evidence about the fact that Jason was being negligent even after knowing that riding
bicycle at a dark night without taking any safety measures can cause accident. It is true that this
accident was a result of not paying attention. Jason was being negligent when he clearly knew
that he may be injured because of lack of reasonable care. On the other hand, Sarah was vigilant
also driving the vehicle within the allowed limit. Therefore, Sarah is not at fault in this case and
not liable for paying any liability.
CONCLUSION
From the above report, it has been concluded that Australian Consumer Law has been
enacted for the protection of customers who buy and sell goods or services. It comprises
provisions regarding guarantee and warranty which is given by the manufacturer, retailer or even
the supplier. On the other hand, Civil Liability Act, 2003 is there for providing statutory
protection for the people engaged in voluntary activities by incurring civil liability. Furthermore,
there are different defences which can be used for reducing or excluding the compensation.
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REFERENCES
Books & Journals:
Clarkson, K.W., Miller, R.L. and Cross, F.B., 2014. Business Law: Texts and Cases. Nelson
Education.
Ramsay, I., 2012. Consumer law and policy: Text and materials on regulating consumer
markets. Bloomsbury Publishing.
Online:
Types of warranties. 2012. [Online]. Available through
:<https://www.accc.gov.au/business/treating-customers-fairly/offering-warranties/
warranties-against-defects>.
Civil Liability Act, 2003. 2016. [Online]. Available through
:<https://www.legislation.qld.gov.au/view/pdf/inforce/current/act-2003-016>.
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