Misleading Claims and Advertising
The Australian Consumer Act from making false statements or giving a false impression of their services and products prohibits every business. This law applies to communication given through product packaging, advertising or through the marketing staff. By carrying out false communication, businesses can mislead consumers in making unintentional purchases. Examples of false claims that are prohibited under this act include claims about product qualities, history, model and style; claims on the conditions of the product, whether new or used; claims on the availability of spare parts and repairs; the need for services and/ or goods; claims on product benefits, performance, accessories and characteristics (ACCC 2013b). Whether the business intention is to mislead or not, any misrepresentation created in the consumer’s mind by the product information is covered under this act. Based on this argument, it can be concluded that Bolt acted in contravention of the ACL with regards to advertisement.
The advertisement by Bolt carried several issues that are in contravention of the advertisement act in ACL. First, the Act explicitly explains that using fine print in advertisement where the fine print contradicts the main message in the advertisement is illegal. From the advert created by Bolt, the fine print indicates that the product is manufactured in Thailand yet the overall message says that the product has been manufactured in Australia for Australians. The information provided in the fine print is thus misleading to the consumer. Secondly, other actions such as including purported health benefits of the product without sufficient proof of the same are also illegal. This is done by Bolt through the claim that the laptop being sold emits 20 percent less radiation than other products, a claim which also contravenes the advertisement act through comparative advertising. In addition to this, Bolt contravenes the act through ‘bait advertising’ as well as through ‘green’ claims. Nehme and Adams (2012, p. 31) refer to misleading ‘green’ claims such as those advanced by Bolt through the low radiation advertisement as ‘green washing’. The bait advertising was carried out by advertising a product that is out of stock and only marketing other products once the customer was in and through including the phrase on product sales at lower prices when the price being marketed was actually the product’s real price. The advertisement also offers misleading prices due to the claim that the product was $899 when it had not been sold for that price for a significant period of time before the advertisement.
Since all of the claims that are included in Bolt’s advert for Bolt Worldly are in contravention of the advertisement act, it is essential for any consumers who feel mislead by the advertisements to seek legal redress through filing a consumer complaint. For instance, Hannah can claim to have been lured through bait advertisement. All these advertisement rules also apply to advertising through the company’s sales persons in the store. It is essential for any business to advertise using valuable but true and reliable information. Any business making claims such as health benefits, environmental friendliness, and comparative records must be able to substantiate their claims effectively.
b.) Consumer Guarantee Act
The Australian Consumer Law clearly outlines the conditions under which product guarantees have to be offered by businesses for products sold after 2011. First, every business must guarantee products sold for less than $ 40,000. This implies that for the lap top sold for $ 2,000, Bold was obliged to provide a product guarantee regardless of the manufacturer (ACCC 2013a). The guarantee should be automatic and not dependent on any warranties given by the company. Consequently, with or without warranties, a guarantee of effective service had to be given by Bolt concerning the laptop computer sold to Hannah. Moreover, the guarantee given under the ACL was to confirm that the product would do everything one would expect a laptop computer to do, be safe and long lasting and also look acceptable. All these qualities were possessed by the laptop computer.
However, other conditions that apply for consumer guarantee under the ACL include: the product descriptions should match those given by the sales person, those on the packaging label and in advertising and should be suitable for the intended purpose (Corones 2009). The product should also meet extra promises about performance and should come with undisturbed possession. Based on these conditions, it can be concluded that Bolt acted in contravention of the consumer guarantee act under the ACL. Although the product sold to Hannah had all the qualities considered under the acceptable product qualities, the conditions of delivery were not fulfilled since the sales person described the product battery as lasting more than 12 hours yet it died within 4 hours. This is in contravention of the guarantee act as the product fails to deliver as promised. Because of this, Hannah is wronged and can apply the ACL under by seeking remedy.
The repair, replacement and refund act provides remedy for failure of a product to meet any conditions of the guarantee. It has been established that the laptop computer bought by Hannah failed to meet the expectations guarantee. It is therefore possible for Hannah to be helped by invoking the repair, replacement and refund Act. This Act says that the retailer of a product has the obligation to assist the consumer in case the product fails to meet any of the consumer guarantees. From the description of the laptop, its performance and comparison with the consumer guarantee act, it can be confirmed that the product does not match the extra promises made by the sales person regarding the performance and quality of the product. The costs should be recovered from the manufacturer or the importer, hence Bolt takes full responsibility for cost recovery. The responsibility of the retailer in ensuring the consumer is compensated is well outlined by Corones (2009, p. 154), through exemplification of the case of Acquired Holdings Ltd v Turvey (2008), in which a loss allocation mechanism was adopted to ensure a single enterprise approach is taken towards resolution of consumer guarantee cases. The retailer should compensate the consumer and follow up on the losses from the manufacturer in case the loss is due to the manufacturer’s fault. Hannah can therefore seek assistance through a legal process since the company denies liability for the product’s non-performance.
c.) Dealings with supplier
In determining whether Bolt has engaged in prohibited actions with regards to Crisco, it is essential to consider the relationship as an agreement between two parties. Due to the lack of clarity of the ACL on the use of the term ‘consumer’ with regards to this law as explained by Stewart (2012, p. 78), Crisco may be taken as the consumer in this contract. The Australian law is clear on the conduct of parties in a contract and the conditions under which contracts can be entered into. The Australian Consumer Law explains that no consumer should be coerced into a contract. From the case of Crisco, it can be said that the supplier was coerced into entering the contract with Bolt based on low pricing. Acting under pressure and with no opportunity to negotiate on the contract terms, the company most likely agreed to the terms under pressure thus the dealings were inappropriate. Secondly, Bolt presented wrongful information during the contract request based on the claim that they were looking for new battery suppliers and that Crisco’s prices were high.
When deciding whether the dealings were in contravention to law, it is necessary to determine whether the terms of the contract caused imbalance between the rights of the supplier and the obligations of the supplier (ACCC 2013c). First, Crisco had a right to understand the basis for the request to revise the contract terms. Also, Crisco was supposed to obtain full disclosure of all the information relevant to the case. Without these, it can be said that the contract terms resulted in an imbalance between the supplier’s rights and the obligations to agree to the contract ad give a response in 24hours. Secondly, the terms provided by Bolt were not legitimately reasonable for protecting the business’ interests. The contract itself was expressed with the objective of reducing their earnings through unjust practices in business agreement. The legitimacy of the new agreement with respect to its potential for protecting the company’s business interests is therefore questionable.
Apart from this, the action of Bolt, in consideration of the fact that the company comprises of 95 percent of Crisco’s business, can be considered as unfair. This is because the agreement has the potential of causing financial detriment to Crisco. Being unfair, this practice can only be considered as illegal and unacceptable. Moreover, the terms of the agreement are not transparent enough since Bolt refused to disclose more information at the request of Crisco. Crisco has a right to seek for redress through filing a consumer claim (Commonwealth of Australia 2013). In addition to this, the conditions under which an agreement can be revoked under the ACL are that the agreement was entered into based on false representation of information by either of the parties. In the case of Bolt and Crisco, Crisco can revoke the new agreement based on this claim given that Bolt misrepresented facts and failed to give Crisco sufficient time to confirm the validity of those facts.
ACCC 2013a, Consumer guarantees – a guide for consumers,
ACCC 2013b, False or misleading claims, ACCC, r
Commonwealth of Australia 2013, unfair contract terms, he blame games. Queensland University of Technology Law and Justice Journal’, vol. 9, no. 2, pp. 137-154, r
Nehme & Adams, M 2012, ‘Section 18 of the Australian consumer law and environmental issues’, Bond Law Review, vol. 24, no. 1, pp. 30 – 59,
Stewart, A 2012, ‘What is wrong with the Australian law of contract?’ Journal of Contract Law, vol. 29,
 Claims of product superiority in comparison with other similar products in the market
ACCC – See Australian Competition and Consumer Act
ACL – See Australian Consumer Law
 Undisturbed possession – no one can take the goods away or prevent the buyer from using the goods
 Bolt is the retailer in the case hence is obliged to assist Hannah seek for refunds
 Acquired Holdings Ltd v Turvey (2008) NZBLC 102, 107
 In the consumer law, the two parties are a business and the consumer hence the consideration of Crisco as the consumer.
 Legitimate reasons are acceptable by law as conditions for business agreements