Commercial Law: Sales, Consumer Guarantees, Fair Trading - OPAIC

This assignment delves into various aspects of commercial law, encompassing the Sale of Goods Act, Consumer Guarantees Act, Fair Trading Act, and Employment Law. It addresses scenarios related to the sale of goods, including the transfer of ownership, risk assessment, and buyer's rights. The Consumer Guarantees Act section explores consumer rights concerning faulty goods and services, examining scenarios involving yachts, life jackets, and remedies for misrepresentation. The Fair Trading Act segment focuses on misleading conduct, false representations, and breaches related to product claims. Lastly, the Employment Law section analyzes dismissal cases, considering substantive grounds and procedural requirements, along with scenarios related to health and safety in the workplace. This comprehensive assignment provides a thorough understanding of key legal principles in a commercial context.

Running head: COMMERCIAL LAW
Commercial Law
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COMMERCIAL LAW 1
Contents
Section A.....................................................................................................................................................2
Question 1 - Sale of Goods......................................................................................................................2
Answer (A)..............................................................................................................................................2
Answer (B)(i)..........................................................................................................................................2
Answer (B)(ii).........................................................................................................................................2
Answer (B)(iii)........................................................................................................................................2
Answer (C)..............................................................................................................................................3
Answer(D)...............................................................................................................................................3
Answer(E)(i)............................................................................................................................................3
Answer(E)(ii)...........................................................................................................................................3
Answer(E)(iii).........................................................................................................................................4
Section B.....................................................................................................................................................5
Question 2 – Consumer Guarantees.............................................................................................................5
Answer (a)...............................................................................................................................................5
Answer (b)...............................................................................................................................................5
Answer (c) (i)..........................................................................................................................................6
Answer (c) (ii).........................................................................................................................................6
Answer (c) (iii)........................................................................................................................................6
Answer (c) (iv)........................................................................................................................................7
Answer (d)...............................................................................................................................................7
Question 3- Fair Trading Act.......................................................................................................................8
Answer to Q1...........................................................................................................................................8
Answer to Q2(a)(a)..................................................................................................................................8
Answer to Q2(a)(b)..................................................................................................................................8
Answer to Q2(b)......................................................................................................................................9
Answer to Q3...........................................................................................................................................9
Question 4- Employment Law - Dismissal................................................................................................10
Case 1....................................................................................................................................................10
Answer (1).............................................................................................................................................10
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Answer (2).............................................................................................................................................10
Case 2....................................................................................................................................................10
Case 3....................................................................................................................................................11
Case 4....................................................................................................................................................11
Case 5....................................................................................................................................................11
Case 6....................................................................................................................................................12
Question 5- Health and Safety...................................................................................................................13
Answer (Q1)(a)......................................................................................................................................13
Answer (Q1)(b).....................................................................................................................................13
Answer (Q2)(a)......................................................................................................................................13
Answer (Q2)(b).....................................................................................................................................14
References.................................................................................................................................................15
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COMMERCIAL LAW 3
Section A
Question 1 - Sale of Goods
Answer (A)
The Sale of Goods Act is an Act which was passed by the Parliament of New Zealand in
1908. It controls the sale of goods which are purchased and traded in New Zealand. It also
manages the binding contract between both the parties(Parliamentary Counsel Office,2017).
Answer (B)(i)
In the given case, there is a contract of sale of goods. According to Section 3 ‘Sale and
agreement to sell ‘of Part 1 of Sale of Goods Act 1908, when the goods are transferred or have
been agreed to transfer by seller to the buyer for a monetary value known as price, then it is a
contract of sale of goods. It also mentions that a contract of sale must be executed amongst the
two parties.
Answer (B)(ii)
As per Section 3(4) ‘Sale and agreement to sell ‘of Part 1 of Sale of Goods Act 1908,
when the transfer of goods takes place in the future or it is subjected to fulfillment of the
conditions , it is known as an agreement to sell (Hubbard, Thomas & Varnham, 2012).
It becomes a sale upon the elapsing of time or fulfillment of conditions upon which the
property is to transferred.In the given case, when window would be fixed by Lisa on the
following Monday, the conditions of the agreement to sell have been fulfilled. It has become a
sale prior to the determined day, so Paul has become the owner of the shed.
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Answer (B)(iii)
As per Section 22 ‘Risk prima facie passes with property’ of Part 2 of Sale of Goods Act
1908, unless it is otherwise decided, seller bears the risk of goods until they have been
transported to the buyer. But when they are transported to the buyer, then he is liable for
compensating their damage. It remains true in all the conditions whether the goods have been
actually delivered or not. So, Paul is liable to bear the loss.
Answer (C)
As per Section 22(1) ‘Risk prima facie passes with property’ of Part 2 of Sale of Goods
Act 1908, it is mentioned that unless it is otherwise agreed, the seller bears the risk of goods until
the transfer of property takes place (Tokeley, 2017).
So, in this case, Samantha shall bear the loss of burnt tables as they have not been
transferred to Angus.
Answer(D)
As per Section 36 ‘Buyer's right of examining the goods ‘ of Part 3 of Sale of Goods Act
1908, when the buyer has not examined the goods earlier which have been delivered to him, then
he is not supposed to accept those until he examines them properly.
So, in the given case, Joe is justified in rejecting the oil as he had not examined them
earlier and upon examination, it was found that they are not appropriate for cooking.
Answer(E)(i)
As per Section 22 ‘Risk prima facie passes with property' of Part 2 of Sale of Goods Act
1908, if there is a transfer of products from the seller to buyer, then the buyer shall bear the risk
regardless of whether delivery has been made or not. So, in this case, Charles would bear the
loss.
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Answer(E)(ii)
According to Section 22 ‘Risk prima facie passes with property' of Part 2 of Sale of
Goods Act 1908, the risk is borne by the vendor till the goods are transported to the consumer.
Once the goods are transported to the consumer, then he shall bear the risk, irrespective of
whether they have been delivered or not (Riley, 2017).
So, in this case, buyer i.e. Charles shall bear the loss.
Answer(E)(iii)
In accordance with Section 22 ‘Risk prima facie passes with property' of Part 2 of Sale
of Goods Act 1908, goods are at the risk of seller till they have been transferred to the buyer
(Palmer, 2014). In the given case, there was no contract for selling of goods and they were given
to the potential buyer for 48 hours so that he can decide whether to buy them or not.
So, the risk is to be borne by the seller i.e. Rick Jones Electrical Ltd (REL) in this case.
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Section B
Question 2 – Consumer Guarantees
Answer (a)
The Consumer Guarantee Act 1993(CGA)safeguards the consumers by permitting them
for seeking for repairs, refund or replacement of the faulty goods. It also sets minimum
guarantees which apply to all the services and goods.
The consumers are covered under the act when they buy any consumer goods for
personal or household use. If they find that it doesn’t perform as per their expectations or break
easily, then they are covered under the Act (Law Link, 2019).
It also applies to new and second-hand products transacted within New Zealand. The
goods comprise of personal property, animals, software, plants and minerals.
Answer (b)
CGA applies to customers who purchase things and business selling their products or
services in New Zealand.They should be bought for their personal purpose and not for
commercial purpose. So, in this case, Alex purchased a family yacht from Nelson Marine
Limited (NML). She does not have a statutory right against NML as the goods are bought for the
commercial purpose.
Furthermore, CGA shall not apply on life jackets as well as they were purchased from
the neighbor Warren.
The guarantee shall not be applicable in both the cases as the yachts were bought for
commercial use and the life jackets were bought privately (Ministry of Business, Innovation and
Employment, n.d.b).
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Answer (c) (i)
As per Section8 (2) (b) of CGA 1993, the guarantees do not apply where the situation
shows that it is irrational for the customer to be dependent on the skill or judgments of the
supplier.
Moreover, Section 17 of Part 2 of CGA 1993 states that if a manufacturer, his agent or
servant makes a representation in the context of goods and they would have act in accordance
with with the guarantee of acceptable quality if the representation has not been made.
In that case, the consumer does not have the right of redressal against the supplier in
respect of the failed goods in complying with the guarantee of acceptable quality. So, Section 17
gives the power to the store to have the remedy to this problem.
Answer (c) (ii)
As per Section 18(3) ‘Options against suppliers where goods do not comply with
guarantees’ of CGA 1993, where the failure in representation by the supplier cannot be
remedied, or it is of a character which is substantial as per Section 21, then goods may be
rejected by Sara as per Section 22 or obtain the compensation for decrease in the worth of goods
less than the price paid or payable by her.
Additionally, Sara may also obtain the compensation for any damage borne by her which
was foreseeable to result from this failure.
Answer (c) (iii)
As per Section 23’Consumer’s options of refund or replacement ‘ of CGA 1993, if Sara
exercises her right to reject the goods and she has been waiting for a long time for their
replacement , then she may claim to refund for the money paid by her in respect of those
rejected goods (Consumer Affairs ,2014).
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Answer (c) (iv)
If there was no replacement of the rejected goods at the store, then Sara would have
sought to claim for refund for the goods rejected by her as per Section 23 of CGA 1993.
Answer (d)
According to Section 47 ‘Jurisdiction ‘of CGA 1993, Disputes Tribunal and any court of
competent jurisdiction are authorized to decide any claims for damages and cost or refund
applicable as per this Act. Lucky can sought relief as per this section to the High Court or
District Court provided where the amount of claim does not exceed $350,000 in the case of
District Court.
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Question 3- Fair Trading Act
Answer to Q1
As per the Fair Trading Act (FTA) 1986, the act ensures that fair competition is promoted
and the product is promoted safely. It also makes sure that consumers get accurate information
prior to the purchase of services and products.
It also makes it unlawful for the business to deceive or mislead the consumers and
requires them to ensure that the provided information is accurate. The Act also evaluates that the
companies are not withholding the crucial information (Ministry of Business, Innovation and
Employment, n.d. a).
So, in this case, Ice Country Limited has breached the Fair Trading Act 1986.
Answer to Q2(a)(a)
In this case, there has been a false representation of the product.The company has also
made unproven claims about the product as per FTA.It has misled Bhavin by causing him to buy
the slim fast tablets which claim to lose his weight in three months.
But the tablets have failed to lose their weight in even six months. Furthermore, the
company claimed to manufacture them in the USA but in reality, they were produced in the
backyard laboratory in South Auckland.
Answer to Q2(a)(b)
The FTA makes the following types of trading behaviors unlawful :
1. Businesses should not mislead or deceive the consumers about the products they
are selling. It comprises of the impressions created by images or through advertisements. Any
information creating a false impression also comes into this category.
2. The traders cannot make unproven claims as they were made in the case of slim
fast tablets.
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In this regard, the FTA has also formulated rules regarding the safety of the products and
unsafe goods notice. It has also mandated stating of information like care labels, country of
origin labels on certain products.
Answer to Q2(b)
According to Section 40 ‘Contraventions of provisions of Parts 1 to 4A an offense' of
FTA 1986, every person who contravenes the provisions of Part 1, Part 3 or Part 4 is liable for
conviction. In the case of an individual such as Keen, the fine should not exceed $200,000
(Whish & Bailey, 2015).
Answer to Q3
As per Section 10 ‘Misleading conduct in relation to goods' of Part 1 of FTA, no person
in trade shall involve in behavior which is misleading to the community regarding its nature,
characteristics, manufacturing process, quantity or appropriateness for a specific purpose.
As per Section 13'False or misleading representations‘, no individual shall make false or
deceptive representations that the products are of a specific category, standard, composition or
rating.
So, in this case, there has been a breach of FTA 1986 according to the above-mentioned
regulations of the Act (Parliamentary Counsel Office, 2018).
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Question 4- Employment Law - Dismissal
Case 1
Answer (1)
As per Employment New Zealand(2019 a), the reasons for dismissal of the employees
can be incompatibility, performance issues etc. So, Alan has substantive grounds for dismissing
Hans.
Answer (2)
In this case, the procedural requirements were not followed by Alan in dismissing Hans.
If an employee is dismissed by the employer, then he has to follow some principles of fair
process.
The employee has the right to enquire for a statement of reasons in writing for his
dismissal. The appeal can be made up to a period of 60 days. The written statement should be
provided within 14 days of making a request.
In case the employer fails to provide such a statement, then the employee can raise the
grievance after a limitation period of 90 days.
The employer must give notice period which is specified in the employment agreement
until the employee has been dismissed on account of serious misconduct.However, Alan should
follow the formal and informal interventions in order to boost the performance of Hans before
dismissing him.
Case 2
The obligations of TIL, in this case, are associated with the dismissal of Sextus on
account for serious misconduct. In the situations of serious misconduct, the employer can
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COMMERCIAL LAW 12
dismiss the employee without giving him any employee or any payments in the place of notice
(Employment New Zealand, 2019b ).
In such cases, the employee can be asked to leave the work at the same point of time.
They are not entitled to the payment of the notice period but can avail the compensation of
annual holidays in their final settlement.
In this case, the behavior of Sextus is posing a threat to the dignity of Lucretia, so it
comes under the category of serious misconduct.He should be immediately dismissed from work.
Case 3
This is a case of misconduct where Rob has failed to follow the lawful instructions of his
employer. So, instead of dismissing him from the job, his employer could warn him not to repeat
the action again.
Case 4
In this case, neither the agreement was signed nor Mary was informed that she was in a
trial period.
She was being dismissed for a trivial reason, so she should take a personal grievance
claim against her employer. A personal grievance claim should be raised by her within 90 days
of the action. If she is dissatisfied with the response, then she can take the case to the Employee
Relation Authority.
Case 5
In this case, Mary was not informed about the final warning. She has been dismissed on
an invalid ground. She can take a personal grievance claim against the employee. She can raise
the issue with her employer within 90 days of the event.
In case of no response by her employer or if she is not satisfied with it, then she can take
the case to the Employee Relation Authority (Community Law, 2019).
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Case 6
Mary can bring a personal grievance against her employer for dealing with her in an
unfair manner. She must first raise the issue with her employer within 90 days of the event or
within 90days after she became aware of the action, whichever is later. She can also raise the
issue after 90 days if her employer or Employee Relations Authority permits it.
If she is dissatisfied with the answer, then she can take the case to the Employee
Relations Authority.
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Question 5- Health and Safety
Answer (Q1)(a)
The owners of Thomas Aluminum were prosecuted and fined for the incident as they had
not complied with the provisions of HSWA in meeting their responsibility of protecting the
health and ensuring the safety of their employees ( Work Safe (2017a).
Answer (Q1)(b)
The responsibility of the employers is to identify the risks related to the health and safety
of their employees. A risk management framework should be formulated for managing the risks
related to the health and safety of the employees.
Firstly, employers should identify and evaluate the potential hazards at the workplace.
Secondly, they should lessen or eliminate the risks.Thirdly, they should monitor the control
measures and lastly review for consistent improvement (Work Safe, 2017b).
Answer (Q2)(a)
The existing hazards in Thomas Aluminum are the risks to the health and safety of the
employees. There is an absence of appropriate tools, equipment, plant and personal protective
equipment for the safety of employees (Work Safe, 2017c).
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Answer (Q2)(b)
A hazard notification checklist for Thomas Aluminum must make sure that if the
workers are trained properly to do their jobs safely.They should be appropriately supervised and
must possess the right tools, machinery and protective personal equipment.
They should be involved in the discussions related to health and safety issues and must be
given an opportunity for participating in discussions regarding the improvement of their health
and safety (Work Safe, 2017d).
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References
Community Law( 2019) .Personal Grievances. Retrieved February 26th , 2019 from
http://communitylaw.org.nz/community-law-manual/chapter-20-resolving-employment-
problems/personal-grievances/
Consumer Affairs (2014). Your Consumer Rights (Goods). Retrieved February 26th , 2019 from
https://www.consumerprotection.govt.nz/assets/PDFs/CP-CGA-Goods-June2013.pdf
Employment New Zealand(2019a ). Dismissal. Retrieved February 26th , 2019 from
https://www.employment.govt.nz/ending-employment/dismissal/
Employment New Zealand(2019b ). Misconduct and serious misconduct. Retrieved February 26th
, 2019 from https://www.employment.govt.nz/resolving-problems/types-of-problems/
misconduct-and-serious-misconduct/
Hubbard, J., Thomas, C. & Varnham, S.(2012). Principles of Law for New Zealand Business
Students (5e).New Zealand : Pearson . 1-752.
Law Link(2019). Business purchases and the Consumer Guarantees Act 1993. Retrieved
February 26th , 2019 from https://www.lawlink.co.nz/article/business-purchases-and-the-
consumer-guarantees-act-1993/
Ministry of Business , Innovation and Employment (n.d.a). Fair Trading Act. Retrieved February
26th , 2019 from https://www.consumerprotection.govt.nz/general-help/consumer-laws/
fair-trading-act/
Ministry of Business , Innovation and Employment (n.d.b). Consumer Guarantees Act. Retrieved
February 26th , 2019 from
https://www.consumerprotection.govt.nz/general-help/consumer-laws/consumer-
guarantees-act/
Palmer, G. (2014). Law-Making in New Zealand: Is There a Better Way. Waikato L.
Rev., 22(2014), 1.
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Parliamentary Counsel Office(2017). Sale of Goods Act 1908. Retrieved February 26th , 2019
from
http://www.legislation.govt.nz/act/public/1908/0168/latest/whole.html#DLM173963
Parliamentary Counsel Office(2018). Fair Trading Act 1986. Retrieved February 26th , 2019
from http://www.legislation.govt.nz/act/public/1986/0121/latest/DLM96439.html
Riley, O. (2017). Sale of Goods by a Non-Owner: The Competing Property Rights of a True
Owner and a Good Faith Purchaser. QMLJ, 8(2017), 99.
Tokeley, K. (2017). When not all sellers are traders: re-evaluating the scope of consumer
protection legislation in the modern marketplace. Sydney L. Rev., 39(2017), 59.
Whish, R. & Bailey, D. (2015). Competition law. USA: Oxford University Press. 1-10.
Work Safe (2017a). Health and Safety at Work Act 2015. Retrieved February 26th , 2019 from
https://worksafe.govt.nz/laws-and-regulations/acts/hswa/
Work Safe (2017b). Managing health and safety. Retrieved February 26th , 2019 from
https://worksafe.govt.nz/managing-health-and-safety/managing-risks/how-to-manage-
work-risks/
Work Safe (2017c). Manufacturing industry. Retrieved February 26th , 2019 from
https://worksafe.govt.nz/topic-and-industry/manufacturing/absolutely-essential-health-
and-safety-toolkit/
Work Safe (2017d). Safe use of machinery. Retrieved February 26th , 2019 from
https://worksafe.govt.nz/topic-and-industry/manufacturing/safe-use-of-machinery/
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