Last lesson we… Learning Intentions:  Define term: Constitution  Students can explain the purpose of The Australian Constitution  Students can define ‘Separation of Powers’ Success Criteria:  Quiz on background knowledge completed  Definitions noted  Notes taken down Homework:  Case Study completed  Questions answered

Week 2: Trade Practices Act (TPA) Learning Intentions:  Students can describe the four major provisions of the TPA  Students can explain the consequences of breaching the act, and give examples of this occuring  Students can explain how to avoid breaching the TPA Success Criteria:  Case studies completed  Textbook activities completed  ‘TPA Proof’ letter to your proposed business is completed

Why? Organisations are operating in an environment where consumers and other groups are becoming increasingly willing to take legal action against businesses and individuals. Small businesses must ensure that steps are taken to reduce this possibility.

Trade Practices Act What does it cover?  Misrepresentation & false advertising  Warranties  Resale price maintenance  Anti-competitive practices

Misrepresentation & false advertising Can you make any claim you like about a product you sell?

Misrepresentation & false advertising Imaginative promotion of products or services is a normal part of attracting customers to your business and encouraging them to buy. However, when you advertise or talk with customers you must take care that each selling point is factually correct. Exception: ‘puffery’ or clear exaggeration, such as ‘whiter than white’ or ‘the best thing since sliced bread’, where it is unlikely that any customer would take the claims seriously. You must also be careful that the overall impression you create about the goods or services you sell is not misleading. In other words, it is not sufficient that each point is technically or narrowly correct. Even silence can be misleading when it is clear that your customer has the wrong idea about the product or service and is relying on your advice. Predictions can also be misleading if there is no reasonable basis for making them.

Misrepresentation Case Study: ‘Power Balance wristbands’  What did Power Balance wristbands claim to do?  Was there evidence to support these claims?  How do you think the product sold so quickly despite this lack of evidence?  What is the law with regard to misrepresentation?  Did the company face legal action over these claims, and if so, what were the consequences?

Warranties Consumers are automatically covered by some basic elements of warranty protection under the TPA. Generally your customers are entitled to a full refund when:  the goods or workmanship is faulty;  the goods are unsuitable for the purpose the customer told you about before the buying;  the goods do not match the sample the customer was shown; or  the goods differ from the way you described them or as they described on the packaging. Generally you do not have to provide refunds where customers:  have changed their mind about the purchase;  have discovered they can buy the goods or service more cheaply elsewhere;  examined the goods before buying and ought to have seen any fault; or  had any defect drawn to their attention before buying (it is useful to note any such defects on the invoice or docket).

Warranties Case Study 2: ‘No refund or exchange’ Questions to answer:  What does the TPA specify with regard to warranties (refund rights)?  Are signs like the one below legally valid? Why / why not?

Homework  Activity 12.2 & prior homework.  Create notes on topics covered to-date.