Section: The Basic Principles of Consumer Law (LOC-5)

QUESTION 1: FAIR TRADING ACT 1986

LOC 5 a: Misleading deceptive conduct

LOC 5 a: False or misleading representation

LOC 5 a: Remedies and penalties for breach

FACTS:

Bhavin finds an advertisement in his letterbox from an Auckland company called Specialist Laboratory Services Ltd. The advertisement states that the company is selling "a slim fast tablet."

The instructions state that if taken as prescribed the tablet will cause significant weight loss within three months. Bhavin, who is overweight responds to the advertisement and buys a substantial quantity of the tablets, He has been using them as prescribed for the past six months without losing any weight. The advertisement also stated that the tablets were manufactured in the USA. Bhavin discovered that the tablets were manufactured in a backyard laboratory in South Auckland.

Required:

a. Outline the issue/s.

b. Explain the relevant law and refer to the relevant cases in relation to the above scenario.

c. Discuss what liability Specialist Laboratory Services Limited might have under the Fair Trading Act 1986, including discussion of the possible remedies.

Question 2: Consumer Guarantees Act- 1993 (LOC5B)

LOC 5 b: Application

LOC 5 b: Implied guarantees

LOC 5 b: Remedies

FACTS:

Lucky, an engineer, has a practice with offices in his home in Mount Albert.

He has recently purchased a small "Freezit" fridge from Auckland Fridge Suppliers (AFS) for the reception area which has drinks and snacks for his clients while they wait.

After only a month the fridge suddenly stops working and leaked water in the expensively carpeted reception area.

Mani, an electrician and a client of Lucky's, who was in the reception at the time tells Lucky that he has tried to repair similar "Freezit" model fridges and that they are known to be unreliable and difficult to repair. He looks at Lucky's fridge and says that it will be difficult to repair and it would be better for Lucky to get a new one.

Lucky takes the fridge back to AFS and says he wants his money back and compensation for drying and cleaning the reception area carpet. The owner of AFS says he will not refund the money.

Required:

a. Outline the relevant issue/s.

b. Set out the relevant law sections in relation to above scenario.

c. Explain what rights, if any, Lucky has against AFS under the Consumer Guarantees Act 1993.