BUSINESS LAW AND ETHICS
CASE STUDY: Read the following facts and answer the questions below.
Sangita likes to do all her shopping online. She has discovered lots of online shops on Australian websites since coming to Australia from India to study. She has family in Australia and wanted to thank them for their hospitality and support by buying them gifts for Diwali, last year.
Sangita knew that Myers Stores is a large department store and that it has an online store. She thought it would be good to buy from Myers because of the variety and because she had heard that Myers has a good returns policy. She wanted her family to be able to exchange her gifts if they wanted something different.
Sangita bought lots of small items that were a success with her cousins. But she was very unhappy with the following:
a) Sangita bought her Aunt Shindu a rice cooker because her aunt always had so much rice to cook for her family. Sangita ordered a rice cooker that was on special for $59.95. When her aunt opened the parcel that had arrived for her, she found a box that said ‘rice cooker’ on the outside but inside was an electric fry pan.
b) Sangita bought her Uncle Ramdas an electric drill. Her uncle was often busy around the house fixing things and sometimes she would hear him mutter ‘ if only I had a drill’. Sangita was happy to find a drill for $69.95 online. Her uncle was very excited with his gift and immediately set up the drill in order to drill holes for clothes hooks in the bathroom. Unfortunately as soon as he turned the drill on there was a smell of burning, the drill became very hot and then would not work.
c) Sangita bought her cousin Pooja an electric toothbrush. Pooja was always worrying about her teeth and brushing them three times a day to make them look white. Sangita had told Pooja not to eat so many sweets but Pooja loves chocolate. Sangita contacted the online sales assistant via the online chat forum and asked if the electric toothbrush she had picked out, which cost $49.95, could be operated with batteries and main power because Pooja would want to carry the toothbrush with her. The online sales assistant assured Sangita that the toothbrush operated with batteries or could be plugged into mains power. Pooja was happy to receive the toothbrush but disappointed when she examined it and found that it could not be operated with batteries.
When Sangita took her purchases back to Myers in store to return them, the sales assistant at an information counter referred her to her online receipts, which she had downloaded and printed off, and which said:
‘Myers Stores offer no refund, exchange or replacement for items purchased online.’
With reference to the Australian Consumer Law, answer the following questions in relation to each transaction between Sangita and Myers Stores:
1. Does the transaction fall within the operation of the Australian Consumer Law (‘ACL’)? (10 marks)
2. What implied guarantee/s could Sangita argue have been breached by Myers Stores Ltd? (45 marks)
3. What remedies, if any, could Sangita claim in relation to any breaches of the ACL? (15 marks)
4. Does the statement on each of Sangita’s receipts for the purchases have any legal effect, and if so, what is the effect? (4 marks)