Question 1

Which of the following is most likely to be a pyramid scheme?

Accepted Answer

A scheme involving a single product and many distributors is most likely to be a pyramid scheme. This is because the focus is not on selling the product but rather recruiting more distributors to earn money. As the recruitment expands, the scheme becomes unsustainable and eventually collapses.

Question 2

Which of the following is most likely to lead to unconscionable conduct by a business when dealing with consumers?

Accepted Answer

Rewarding staff for pressure based selling incentivizes them to prioritize their own sales targets over the best interests of the consumer, which can lead to unconscionable conduct. Options A, B, and C all promote fair and ethical business practices which are less likely to result in unconscionable conduct.

Question 3

A business that fails to comply with its own privacy policy:

Accepted Answer

Failing to comply with a privacy policy is a breach of contract and constitutes misleading or deceptive conduct, but it is not necessarily illegal unless it violates a specific privacy law. However, it can result in legal consequences if individuals or regulators take action against the business.

Question 4

The Australian Consumer Law Part 3.3 regulates the safety of products sold to consumers.Goods that do not comply with a safety standard or may be dangerous may be subject to a compulsory recall notice.The issue of this notice generally does not mean that the business must:

Accepted Answer

The answer of The Australian Consumer Law Part 3.3 regulates...

Question 5

'Unconscionable' for the purpose of ss 20 and 21 of the Australian Consumer Law means:

Accepted Answer

"Unconscionable" under sections 20 and 21 of the Australian Consumer Law refers to conduct that is particularly unfair or unjust, breaching the standards of morality and fairness expected in a commercial context. Therefore, option B is the correct choice as it directly relates to the meaning of "unconscionable" in a legal context.

Question 6

Which of the following is not a means of enforcement of the ACL?

Accepted Answer

Offering a secret commission to the ACCC would be a violation of the ACL and could result in prosecution, rather than being a means of enforcement. The other options listed are all valid means of enforcement of the ACL.

Question 7

Unconscionable conduct is not clearly defined in ss 20 and 21 of the Australian Consumer Law.Section 20 however, provides that unconscionable conduct should be assessed in accordance with the 'unwritten law'.This suggests that unconscionable conduct in general terms means:

Accepted Answer

While all of the options may be considered unethical, only choice B aligns with the definition of unconscionable conduct provided in the question. Unconscionable conduct is specifically defined under s 22 as conduct that takes advantage of another party's vulnerability or ignorance, or puts them at a disadvantage that they cannot reasonably protect themselves against.

Question 8

Section 23 of the Australian Consumer Law is concerned with the use of unfair terms in contracts.The section applies to:

Accepted Answer

Section 23 of the Australian Consumer Law specifically applies to standard form consumer contracts, which are contracts where the terms have been prepared by one party and are not subject to negotiation by the other party. This section does not apply to all contracts, written contracts, or consumer contracts, but rather only to standard form consumer contracts.

Question 9

ACL Part 4.1 sets out the penalties associated with various contraventions of the ACL.Many penalties are imposed on a 'strict liability' basis.This means that:

Accepted Answer

The strict liability basis means that an element of moral fault or a particular intention on the part of the defendant need not be proven. This is different from the other choices presented, as there are defences available to the defendant (C) and the Court may have discretion in choosing remedies (B), but there is no automatic doubling of penalties (D).

Question 10

The remedies offered under the Australian Consumer Law for contravention of the ACL are:

Accepted Answer

The Australian Consumer Law provides a broad range of remedies to consumers who have been affected by a contravention of the ACL, including damages, injunctions, refunds, and compensation. These remedies are intended to provide a fair and effective means of addressing consumer complaints and ensuring that businesses comply with their obligations under the law. The remedies are not always punitive in nature, but rather aim to compensate consumers for any losses or damages they may have suffered as a result of the contravention.

Question 11

Section 25 of the Australian Consumer Law sets out examples of contract terms that are unfair.The general effect of this long and detailed provision is that a contract term will generally be considered to be unfair when:

Accepted Answer

Section 25 of the Australian Consumer Law states that a contract term will be considered unfair if it permits one party to unilaterally exercise rights and privileges of a kind or scope that the other does not have. It does not matter if the term is standard or long and technical, as long as it meets this criterion to be considered unfair. Option D is incorrect as the term does not have to be something that the consumer does not like, but rather that it unilaterally benefits the business.

Question 12

The Queensland Premier tells Queenslanders on television after the Queensland Cultural Centre (QCC) is destroyed during a performance of Benjamin Keller's Opera (in which the phantom reveals himself to be a suicide bomber) that the Cultural Centre can be rebuilt in three months.This comment is untrue.Experts, politicians and lay-people everywhere agree that the Centre cannot conceivably be rebuilt for at least 5 years.Businesses near the QCC suffer economic loss as a result of the Premier's misrepresentation.Has s 18 of the Australian Consumer Law been contravened?

Accepted Answer

The Premier's statement about the rebuilding timeline of the Queensland Cultural Centre does not fall under "in trade or commerce" as required by section 18 of the Australian Consumer Law. This section typically applies to commercial activities, and the Premier's comments were made in a governmental or public policy context, not as part of a commercial transaction or advertisement.

Question 13

If a person has engaged in unconscionable conduct under s 21, a court will not apply the provision if the person is:

Accepted Answer

Section 21 of the Australian Consumer Law, which deals with unconscionable conduct, applies to all types of businesses, regardless of their size or structure. However, the law does not specifically exempt any type of business from its provisions based on its size or whether it is public or private. The mention of a listed public company as an exception is not accurate in the context of the law's application. The correct understanding is that all entities, including listed public companies, can potentially be held accountable for unconscionable conduct under section 21. This answer is provided based on the general application of the law and does not imply that listed public companies are exempt; rather, it highlights that no specific exemptions based on the type of business are stated in section 21.

Question 14

A statement of opinion will only be misleading or deceptive under s 18 of the Australian Consumer Law if:

Accepted Answer

Section 18 of the Australian Consumer Law prohibits misleading or deceptive conduct in trade or commerce. A statement of opinion can only be misleading or deceptive if it conveys facts that are incorrect, incomplete or misleading. Therefore, choice A is correct. Choices B, C and D are incorrect because they do not reflect the legal test for misleading or deceptive conduct under s 18.

Question 15

Which of the following is prohibited under the Australian Consumer Law?

Accepted Answer

The answer of Which of the following is prohibited under...

Question 16

Which of the following cannot be said of the consumer guarantees implied into consumer contracts by the Australian Consumer Law (ACL)?

Accepted Answer

The statement "They apply to standard form contracts only" is incorrect. The consumer guarantees implied into consumer contracts by the ACL apply to all consumer contracts, whether they are standard form contracts or not.

Question 17

According to s 23 of the Australian Consumer Law, a contract term will be unfair if three elements are satisfied.Which of the following requirements is not one of these?

Accepted Answer

The requirement that the term is unconscionable or misleading and deceptive is actually one of the three elements that must be satisfied in order for a contract term to be considered unfair under s 23 of the Australian Consumer Law. The other two requirements are that the term causes a significant imbalance between the parties' rights and obligations, and that it would cause detriment to the consumer. The final requirement is that the term is not reasonably necessary to protect the legitimate interests of the business.

Question 18

In considering whether a contract is unfair under s 24(2) of the ACL, the Court will consider the extent to which the term is:

Accepted Answer

The court considers the transparency of the term, which involves assessing how clear and understandable the term is to the parties involved.

Question 19

If a business fails to take reasonable steps to protect any personal information it holds from misuse or unauthorised access, it is in breach of:

Accepted Answer

APP11 requires businesses to take reasonable steps to protect personal information from misuse, interference, loss, and unauthorised access, modification, or disclosure.

Question 20

For conduct to be misleading and deceptive under s 18 of the Australian Consumer Law (ACL) it need not be conduct that is:

Accepted Answer

The test for misleading or deceptive conduct under s 18 of the ACL is objective and considers the perspective of the target audience, not the 'reasonable person'.

Quiz 11: Dealing With Consumers