– Deceptive and misleading advertising
When, in the promotion of a product or service, a representation is made to the public that is false or misleading.
Examples: Overstating benefits, offering discounts that don’t exist, bait and switch advertising.
- Bait and switch advertising: promoting a heavily discounted product despite the business having limited or no supply.
– Price discrimination
- Charging different prices to different customers for the same product
- NB: Discounts for bulk buying are legal.
- Differences in price is possible when markets are geographically separated or there is product differentiation within the one market.
- The Competition and Consumer Act 2010 prohibits price discrimination if the discrimination could substantially reduce competition.
– Implied conditions
The unspoken and unwritten terms of a contract.
- Under the Competition and Consumer Act goods purchased by consumers must be:
- Acceptable quality (up to standard for its price & free of defects)
- Fit for purpose
- Match description or sample
- Promise made by business to repair or replace faulty products within certain time period
- All products have implied warranty. By law, a business must refund the client’s money or exchange the good if it is recognised to have been faulty when it left the store.
Extract from Business Studies Stage 6 Syllabus. © 2010 Board of Studies NSW.