Consumer Protection and Fairness
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Questions and Answers

What is the definition of 'consideration' in the context of business transactions?

  • A promotional strategy for marketing
  • Anything of value given in exchange for goods and services (correct)
  • Only monetary payment for goods
  • A type of legal agreement

A juristic person can be a partnership or a trust.

True (A)

What is the main purpose of the Consumer Protection Act?

To promote and advance the social and economic welfare of consumers.

What significant change occurred during the Industrial Revolution?

<p>Development of mass production (B)</p> Signup and view all the answers

A ______ is a person who markets goods and services to consumers.

<p>supplier</p> Signup and view all the answers

Which of the following is NOT included in the vulnerable consumer group?

<p>High-income individuals (A)</p> Signup and view all the answers

The Molony Committee found that consumers faced fewer challenges in evaluating complex goods.

<p>False (B)</p> Signup and view all the answers

What does the term 'electronic communication' refer to?

<p>Communication by means of electronic transmission.</p> Signup and view all the answers

What does the Classical Model emphasize in contract law?

<p>Autonomy of parties and minimal supervision</p> Signup and view all the answers

The effective date of the Consumer Protection Act is ______.

<p>31 March 2011</p> Signup and view all the answers

Match the following terms with their descriptions:

<p>Consumer = A person to whom goods and services are marketed Goods = Anything marketed for human consumption Market = To promote or supply goods and services Consumer Protection Act = Legislation aimed at protecting consumer rights</p> Signup and view all the answers

Match the terms with their definitions in the context of consumer protection:

<p>Grey-listed terms = Terms presumed to be unfair Black-listed terms = Terms that are completely prohibited Procedural Fairness = Fair circumstances for contract conclusion Substantive Fairness = Consideration of consumer interests in agreements</p> Signup and view all the answers

The Consumer Protection Act aims to reduce disadvantages against vulnerable consumers.

<p>True (A)</p> Signup and view all the answers

Which of the following models attempts to rectify unequal bargaining power?

<p>Neo-liberalism and Fairness Model (D)</p> Signup and view all the answers

Substantive fairness focuses strictly on the legal terms of a contract, ignoring consumer interests.

<p>False (B)</p> Signup and view all the answers

What challenge does the Constitution face in relation to consumer protection?

<p>Conflicting ideologies</p> Signup and view all the answers

What must suppliers not charge consumers for in relation to preparing an estimate?

<p>All of the above (D)</p> Signup and view all the answers

A supplier may charge a consumer more than the estimate if the consumer did not authorize additional work after being informed of extra charges.

<p>False (B)</p> Signup and view all the answers

What is the right of a consumer regarding an advance booking or order?

<p>To cancel the booking or order.</p> Signup and view all the answers

A charge is unreasonable if it exceeds a ______ amount, considering factors like the nature of goods or services.

<p>fair</p> Signup and view all the answers

Match the following sections of the CPA with their key points:

<p>Section 15(3) = Suppliers cannot charge for estimate preparation Section 17(1) = Right to cancel does not apply to franchise agreements Section 17(4) = Reasonable charges must be fair Section 17(5) = No cancellation fee for death or hospitalization</p> Signup and view all the answers

What happens if a consumer cancels a booking due to hospitalization?

<p>No cancellation fee is allowed (A)</p> Signup and view all the answers

Suppliers are allowed to demand a non-refundable deposit for all advance bookings regardless of circumstances.

<p>False (B)</p> Signup and view all the answers

In the case of the Dubai trip refund, what was the basis for the consumer's entitlement to a refund?

<p>The trip was cancelled due to the COVID-19 pandemic.</p> Signup and view all the answers

What is the primary requirement for notices, documents, and visual representations according to section 22 of the Consumer Protection Act?

<p>They must be in plain language. (D)</p> Signup and view all the answers

Section 22 of the Consumer Protection Act allows the use of technical language in consumer information.

<p>False (B)</p> Signup and view all the answers

What must reconditioned goods display according to section 25(1) of the CPA?

<p>A conspicuous notice indicating they are reconditioned, rebuilt, or remade.</p> Signup and view all the answers

According to section 25(2) of the CPA, grey-market goods must have a conspicuous notice in a prescribed ______ and ______.

<p>manner, form</p> Signup and view all the answers

Match the following sections of the Consumer Protection Act with their descriptions:

<p>Section 22 = Requirements for plain language Section 25(1) = Notice requirements for reconditioned goods Section 25(2) = Notice requirements for grey-market goods Section 26(2) = Supplier must provide a written sales record</p> Signup and view all the answers

Which of the following is NOT a consideration for plain language according to the Consumer Protection Act?

<p>Complexity (A)</p> Signup and view all the answers

Section 26(1) states that an entitlement to a sales record is applicable in all transactions.

<p>False (B)</p> Signup and view all the answers

What information must be included in the sales record according to section 26(3) of the CPA?

<p>Full name or registered business name, address, date of transaction, description of goods, unit price, quantity, total price before tax, tax amounts, total price including tax.</p> Signup and view all the answers

What type of conduct is characterized as unconscionable?

<p>Unethical or improper conduct that shocks the conscience (B)</p> Signup and view all the answers

Section 40(1) of the CPA allows suppliers to use physical force in negotiations if necessary.

<p>False (B)</p> Signup and view all the answers

Which section of the CPA states that the supplier must not imply false or misleading representation concerning material facts?

<p>Section 41(1)</p> Signup and view all the answers

Suppliers taking advantage of consumers' ____ is considered unconscionable conduct.

<p>vulnerability</p> Signup and view all the answers

Match the following functions to their corresponding sections of the CPA:

<p>Section 38(3) = Exemption for franchise agreements Section 40(2) = Exploitation of consumer vulnerability Section 41(3) = False marketing representations Section 47(1) = Exemption for special order goods</p> Signup and view all the answers

What happens to transactions or conditions resulting from prohibited conduct under sections 40 and 41?

<p>They are void (B)</p> Signup and view all the answers

False marketing includes falsely stating that goods are of a certain quality or grade.

<p>True (A)</p> Signup and view all the answers

What must suppliers do when they notice an apparent misapprehension by a consumer regarding a material fact?

<p>Correct it</p> Signup and view all the answers

What must every franchise agreement contain at the top of the first page?

<p>Section 7(2) of the Act (C)</p> Signup and view all the answers

A franchise agreement that is renewed constitutes a new franchise agreement.

<p>True (A)</p> Signup and view all the answers

What is the primary institution that enforces the Consumer Protection Act?

<p>National Consumer Commission (NCC)</p> Signup and view all the answers

The hierarchy for redress begins with a direct referral to the ______.

<p>NCT</p> Signup and view all the answers

Which of the following is NOT a step in the hierarchy of redress outlined in section 69 of the CPA?

<p>Negotiation between parties (D)</p> Signup and view all the answers

Match the following parties or institutions with their respective roles in the Consumer Protection Act:

<p>NCC = Enforces the CPA NCT = Handles both credit and consumer agreements Consumer = Has locus standi to approach civil court ADR Agent = Alternative dispute resolution facilitator</p> Signup and view all the answers

The National Consumer Commission has jurisdiction over both consumer and credit agreements.

<p>False (B)</p> Signup and view all the answers

What type of benefits must a franchisor disclose in a franchise agreement?

<p>Undisclosed direct or indirect benefits or compensation from suppliers</p> Signup and view all the answers

Flashcards

Industrial Revolution

A period of major technological advancements and societal changes (18th-19th centuries).

Mass Consumer Market

A market in which goods are produced and distributed in large quantities, leading to challenges for consumer evaluation.

Consumer Protection

Measures to safeguard consumers' rights and interests during transactions.

Classical Model of Consumer Law

Emphasis on freedom of contract and minimal legal intervention in transactions.

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Neo-Liberal Fairness Model

Focuses on consumer protection, addressing unequal bargaining power and introducing new laws.

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Procedural Fairness

Fair conditions for contract formation, aiming for transparency and balance.

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Substantive Fairness

Judging the fairness of a contract's content, considering social and economic impacts.

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Consumer Protection Act (CPA)

A law that aims to protect consumers during transactions in a specific jurisdiction.

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Business Days

Days excluding public holidays and weekends.

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Consideration

Anything of value exchanged for goods or services (e.g., money, credit, awards, barter).

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Consumer Agreement

An agreement between a supplier and a consumer, not related to a franchise.

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Supplier

A person who sells goods or services.

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Electronic Communication

Communication through electronic means.

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Goods

Tangible or intangible items sold, including intellectual property, property rights, utilities like gas/water/electricity

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Consumer (4 Aspects)

  1. People who regularly buy things from a supplier; 2. Who have dealt with a supplier; 3. Who receive or use services; 4. Franchisees in a franchise agreement.
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Vulnerable Consumer

A group of people who might have a hard time protecting their rights in a transaction, including low-income, those in remote areas, minors, seniors, and people with limited literacy or vision.

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Unconscionable Conduct

Unethical or improper behavior that is so unfair it would shock the conscience of a reasonable person.

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Section 40(1) of the CPA

Suppliers and their agents cannot use force, coercion, undue influence, pressure, duress, or harassment, or unfair tactics when engaging with consumers.

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Section 40(2) of the CPA

It's unconscionable for a supplier to exploit a consumer's vulnerabilities (like disability, illiteracy, or ignorance) for their own gain.

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Section 41(1) of the CPA

Suppliers cannot make false, misleading, or deceptive claims about their goods or services.

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Section 41(3) of the CPA

False marketing includes claiming a status you don't have, falsely stating product quality, availability, or delivery time, and claiming goods are new when they're not.

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Section 47(1) of the CPA

This section does not apply to franchise agreements or goods made to specific customer orders.

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Overselling and Overbooking

These practices are prohibited under the Consumer Protection Act, but there are exemptions for franchise agreements and special order goods.

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Prohibited Conduct under CPA

Actions that violate sections 40 and 41 are also prohibited under section 51, making any transaction or agreement based on such conduct void.

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CPA Section 15(3)

Suppliers cannot charge consumers for an estimate, including diagnostic work costs, or damage caused during the estimate preparation.

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CPA Section 15(4)

Suppliers cannot charge a price higher than the estimate unless they inform the consumer of additional charges and get their approval.

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CPA Section 17(1)

Advance booking cancellation rights don't apply to franchise agreements or special order goods.

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CPA Section 17(2)

Consumers have the right to cancel advance bookings for goods or services.

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CPA Section 17(3)

Suppliers can charge a reasonable deposit for advance bookings, but can also impose a reasonable cancellation fee.

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CPA Section 17(4)

A reasonable cancellation fee is fair, considering the service, cancellation notice, alternative customers, and industry practices.

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CPA Section 17(5)

No cancellation fee is allowed if a booking is cancelled due to the booked person's death or hospitalisation.

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Force Majeure & CPA Section 17

Force Majeure events, like pandemics, can release parties from contractual obligations, but consumer protection laws like Section 17 still apply.

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Plain Language in Consumer Protection

The legal requirement for suppliers to use clear and understandable language in all consumer-related documents, notices, and visual representations.

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What makes a document 'Plain Language'?

A document is considered 'plain language' if it's easily understood by a typical consumer with average literacy and minimal experience.

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Reconditioned Goods Notice

A conspicuous notice must be displayed informing consumers that a product has been repaired, rebuilt, or remade, ensuring transparency.

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Grey-market Goods Notice

A clear and conspicuous notice is required for goods imported without official authorization, explaining the origin and potential implications.

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Sales Record Requirements

Suppliers must provide consumers with a written record containing specific details about each transaction, including the name of the supplier and the goods/services purchased.

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What information must be on a sales record?

The sales record should include the supplier's details, transaction date, names of goods/services, unit price, quantity, total price before tax, applicable taxes, and the final price including tax.

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Exceptions to Sales Record Requirement

Certain transactions may be exempt from the sales record requirement if specific legal exemptions apply, such as those covered by the Electronic Communications and Transactions Act.

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NCC's Role in Plain Language

The National Consumer Commission (NCC) can publish guidelines or assessment methods to ensure suppliers comply with plain language requirements.

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Section 7(2) of the Act

This section of the Act requires franchisors to disclose any direct or indirect benefits they receive from suppliers, ensuring transparency in franchise agreements.

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Franchise Agreement Renewal

When a franchise agreement is renewed, it is considered a new agreement, subject to all current regulations, even if the original agreement was made before the effective date of those regulations.

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Hierarchy of Redress (CPA)

The CPA outlines a specific order for resolving consumer disputes, starting with direct referral to the National Consumer Commission (NCC) and progressing through various bodies before resorting to ordinary courts.

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Chirwa v Transnet Ltd and Others

This case established the principle that specialized dispute resolution frameworks should be utilized before resorting to ordinary courts.

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National Consumer Commission (NCC)

The NCC is the main body that enforces the CPA, acting as an appeals body for consumer disputes, and has jurisdiction over consumer matters.

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National Credit Tribunal (NCT)

The NCT has jurisdiction over both credit agreements and consumer agreements, and its authority extends to both the NCA and CPA.

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Direct Referral

A consumer can directly refer a dispute to the NCC, bypassing other channels, when the matter falls under its jurisdiction.

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Alternative Dispute Resolution (ADR)

The CPA encourages ADR mechanisms like Ombuds, Accredited Industry Ombuds, and ADR Agents to reduce the need for court cases in consumer disputes.

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Study Notes

Industrial Revolution

  • Resulted in mass production, rising incomes, and improved communication.
  • Led to a more complex consumer market.

Massification of the Consumer Market

  • Increased difficulty for consumers to evaluate goods.
  • Mass distribution led to new marketing and advertising techniques.

Molony Committee

  • Found that consumers faced challenges with complex goods, vulnerability, and insufficient protection.
  • Problems included difficulty pursuing claims and insufficient law enforcement.

Constitution and Consumer Protection

  • Consumer protection is linked to the right to dignity.
  • Classical model emphasizes autonomy, minimal supervision and a principle of upholding contracts.
  • Neo-liberal model rectifies unequal bargaining power.

Procedural and Substantive Fairness

  • Procedural fairness sets fair contract conditions, promoting transparency.
  • Substantive fairness considers the social, physical, and economic interests of the consumer in a contract.

Grey and Black Listed Terms

  • Grey-listed terms are presumed unfair.
  • Black-listed terms are completely forbidden.

Consumer Protection Act

  • Does not apply to goods and service promotion or transactions before the effective date of 31 March 2011.
  • Defines key terms, like agreement.

Fundamental Consumer Rights

  • Includes rights to equality, privacy, choice, information, fair dealing, fair terms, value, and safety.
  • Individuals, associations, and groups can pursue actions in regard to consumer rights infringements.

Application of the CPA

  • Applies to most transactions within the Republic.
  • Excludes specific types of transactions (e.g., transactions that do not fall within the definition of "transaction").
  • Certain services and goods are excluded.

Fundamental Consumer Rights Clarification

  • The CPA protects 8 fundamental rights.
  • Individuals can pursue, and have locus standi in cases relating to infringements.
  • Common law rights are not excluded.

Consumer Rights (Section 4 of CPA)

  • Consumers' rights are protected across various areas.

Consumer Protection Act's Purpose

  • Aims to advance the social and economic well-being of consumers.
  • Seeks to protect vulnerable consumers from disadvantages.

Section 8 of CPA: Unfair Supplier Practices

  • Prohibits various unfair practices against consumers.

Section 9 of CPA: Differential Treatment

  • Sets criteria for differential treatment and grounds for exclusion.

Section 8(1) of CPA

  • Suppliers cannot unfairly exclude, give priority, assign different goods or services, charge different prices, target specific groups.

Section 8 (2 to 3) of CPA

  • Discrimination, in certain supplier actions, is prohibited.

Section 9(1) to (4) of CPA

  • Sets grounds for suppliers to treat consumers differently, emphasizing certain circumstances and reasonableness.

Section 10(1) of CPA

  • Specifies the choices for consumers when dealing with alleged violations.

Section 10(2) of CPA

  • Explains how allegations of unfair discrimination are reviewed.

Direct Marketing

  • Defines direct marketing (e.g, contact of individuals).
  • Explains how privacy rights relate to direct marketing.

Cooling-off Right

  • Consumer rights to cancel a transaction within the 5 business days.

Section 11 (1) & (2) of CPA

  • Discusses the right to privacy and prohibits certain types of direct marketing during prohibited times.

Bundling

  • A supplier may not make a condition to bundle goods and services, except under certain circumstances.

Pre-authorisation for Repair & Maintenance

  • Sets requirements for supplier estimates and prior authorizations.

Canceling Advance Bookings

  • Describes consumer rights to cancel advance bookings in relation to certain transactions or goods.

Plain Language of Notices

  • Information must be clear and easy to understand.

Reconditioned and Grey-Market Goods

  • Clear labelling is required.

Sales Records

  • Suppliers must have records of individual transactions detailing product, price, and quantity.

Promotions, Marketing, and Sales

  • Marketing and promotions cannot misrepresent information or products.

Bait Marketing

  • Suppliers may not mislead consumers with discounted goods.

Negative Opt-in Marketing

  • This marketing approach is prohibited.

Referral Selling

  • Selling goods based on referring others is prohibited.

Unconscionable Conduct

  • Unethical or harmful behavior by suppliers prohibited.

False and Misleading Representations

  • Suppliers cannot commit misconduct in dealings.

Overselling and Overbooking

  • Suppliers cannot accept payment if there is no reasonable basis.
  • Unreasonable supplier conduct is prohibited.

Lay-by Agreements

  • Defines lay-by agreements.
  • Outlines the rights and obligations of both parties.
  • Addresses various situations where there could be disputes.

Franchise Agreements

  • A legal arrangement where a franchisor permits a franchisee to operate a similar business under the franchisor's brand.
  • Sets rules to protect consumers involved in franchise agreements.

Pre-Disclosure Information & Documentation

  • Outlines requirements of documents regarding franchise and the pre-disclosure of information involved.

National Consumer Commission

  • Enforces the CPA.
  • Has jurisdiction over matters covered by the CPA.

National Consumer Tribunal

  • Discusses the responsibilities of the NCT, which is a tribunal for dealing with consumer disputes.

Administrative Fines

  • Limitations are imposed on potential fines.

Section 13(1): Bundling Prohibitions

  • Suppliers cannot require consumers to purchase additional goods or services to obtain specified products.

Section 13(2): Exceptions To Prohibitions

  • Defines specific circumstances under which bundling restrictions may not apply (convenience, economic benefit, or separate pricing).

Case Laws, Decisions, and Referrals

  • Includes discussion of judgments and legal precedents.

Statutory Interpretation

  • Explains how relevant laws are to be understood.

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Description

Explore the evolution of consumer protection from the Industrial Revolution to modern practices. This quiz examines the complexities of consumer markets, the impact of mass distribution, and the principles of fairness in contracts. Understand the role of the Molony Committee and constitutional aspects in safeguarding consumer rights.

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