Unit 50-LO1 Analyse the main principles affecting the legal relationship between business organizations and their consumers-BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

There are 3 important principles that companies may want to take into account. They help protect consumers from unethical business tactics and they also try to reduce the risks of injury.

1) Representativeness: This principle means that the market is fair to everyone. It is not just for people with money or resources.

2) Comparative advertising: A company cannot lie about its own products when trying to influence potential customers, but it can make comparisons with other company’s products.

3) Customer perception theory: The court focuses on companies and what they say in their advertisements. They make it so that customers can understand what the company says. If the advertisement has words and images, then the overall tone and impression should be consistent with what is being said.

Also Read: Examine the legal rules on consumer credit agreements

Sale of goods:

Consumer rights and remedies

Consumer rights are the legal rights of the person who is buying something. There are also things that the company does to make sure that it’s a social responsibility.

The main purpose of consumer rights is to allow customers to buy things from a company without the company being able to do anything. This means that all companies will have the same information, prices for items, and who owns what. It is important because once you sell something and get money for it, then you can go about your business without interference from the company or their policies.

Generally speaking, if you buy something, no one can take it away from you. They cannot change the quality of service of what you bought. If the product is defective they cannot refuse to give a refund.

Statutory implied terms, transfer of property and possession, seller’s remedies against the buyer, consumer’s remedies against the seller, relevant legislation

Statutory implied term:

It can exist without the agreement of the parties. They are like what is in a contract, and there are terms that people have agreed to but they are not written down.

Transfer of property and possession:

A seller has a duty to give the buyer what they have bought. They cannot take it back without an agreement with the buyer. For example, if a company goes bankrupt or is liquidated, then it can’t collect any of its products.

Seller’s remedies against the buyer:

The seller has remedies against the buyer, depending on how soon they find out that the product is not of satisfactory quality. If it is within a reasonable amount of time then they can reject the goods and get their money back for them or repair/replace them.

Consumer’s remedies against the seller:

If something goes wrong with your purchased item, you can do some things. You are a consumer if a business sells you a faulty or unsatisfactory product. If it is defective and does not work right then there will be compensation for any damages caused by this defect in the product.

Relevant legislation:

There are many pieces of legislation that have been put into effect to protect people against unfair sales and purchases. Some of them are the Consumer Rights Act 2015, The Sale of Goods Act 1979, Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR), Business Protection from Misleading Marketing Regulations 2008 (BPRM), and The Consumer Protection (Amendment) Act 2007.

Consumer guarantees exclusion and limitation clauses

Consumer guarantees are rights that buyers have. They can use them as long as they do not go past the warranty period.

The provisions do not usually extend to losses from damage to or destruction of goods. Coverage excludes incidental damages, warranties only cover goods and services, and products lack sufficient safety standards with hazards including death risks. Consumer guarantees exclude breach of contract or breach of confidence claiming consequential loss arising out from losses due to defective goods. The issue for litigation is whether exclusions are unreasonable and therefore invalid.

Digital content rights:

Statutory rights and remedies e.g. repair or replacement when digital products are faulty

Digital products, like phones or computers, are not always made well. Sometimes they break and can’t be fixed. The law just says that if someone does not fault the product breaking, then the other person can have more people try to fix it themselves.

The repair is made within a ‘reasonable time’ after purchase. There is no legal entitlement to having someone else try to fix it if the problem arises from anything other than workmanship or materials e.g., usage, poor planning, accidental damage while out and about, etc.). This also means that you don’t have an automatic right to replacement.

Supply of services:

Statutory implied terms and remedies e.g. right to repeat performance, right to price reduction

Statutory implied terms and remedies can vary per jurisdiction, but there are some which are generally recognized. One of these is the right to repeat performance, also known as either an unconditional or conditional warranty. This means that if the seller does not do what they promised, and it is within a reasonable time after their first failure, then they will have to pay for any lost money in the deal.

But in most cases (except for when the law says you can’t), it is better to tell the person you are helping what you want them to do before they have done it. That way, they can fix any problems before they happen. But make sure not to contact them while waiting for their response.

Product liability:

Defective products and liability

If a company has even one employee in its service, parts, and distribution chain who is negligent or otherwise careless, the company can liable for distributing defective products. Consider product liability insurance to protect your company against lawsuits.

Product safety at common law and under the statute, liability consequences, defenses

Product safety is the responsibility of both manufacturers and distributors. To make sure that there are no bad products on the market, there is a system in place to protect consumers. It has government organizations and third-party organizations. This help make sure that people know about all the dangers of products they buy.

The Consumer Product Safety Commission, a federal agency, works with the Food and Drug Administration to identify unsafe products. They work together because the companies that make the products are aware of risks in their industries. To protect consumers and themselves from liability, they have partnered with these agencies.

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