Marketing Law Final exam 2023
Question 1 (25 marks)
Lillian works as a solicitor for a law firm in the city. She works from home two days a week and sees clients on the other three days in the office. Whilst working at home one day the lights go out and she calls in an electrician (Bob’s lightning fast sparky) in to do the repair. He only takes a few minutes and all is working again. That evening, Lillian and her partner, Jason are making dinner. When Jason plugs in the food processor he receives a huge electric shock which throws him across the room. Lillian calls an ambulance and the doctors at the hospital inform Lillian that Jason had received a huge dose of electricity though his arm and this had damaged his nerves preventing him from having full use of his right arm again meaning there was permanent injury. Lillian calls in another electrician to check the fuse box and he informs her that the person who worked on it previously had not replaced a fuse correctly and or used the wrong part preventing the fuse box from triggering a quick cut out when there is a surge of electricity. Lillian then phones Bob the electrician to complain and he comes over to investigate. He claims that the part he used was faulty and not his workmanship. He purchased the part from Jim’s electrical supplies.
Out of curiosity, Bob went back to “Jim’s” to ask about that part he purchased. He was told by the sales manager of the store that that part could withstand a specific surge tolerance and was suitable for home use. This turned out be false and was the wrong part! This may have caused the injury to Jason! Lillian had the part forensically examined and it turned out not to be suitable for home use.
Bob wanted to get his money back from Jim for the faulty part, but Jim said it wasn’t his problem and to take it up with the supplier. Jim also refused to offer Bob a refund.
The part in question is a generic part called “Sparkies fright” which is very similar to the original part called “Sparkies bright”. The company who manufactures “Sparkies bright” is considering taking action against the company that makes “Sparkies fright”.
Jim owns a large electrical supplies store on the Northern beaches and one day last week he received a huge parcel of parts he didn’t order. These are new versions of parts that have just come onto the market and the manufactures want to push these throughout electrical supply outlets. Today he received an invoice for these parts and is not sure if he is obliged to pay for them. That afternoon Jim receives a call from a wholesaler of fuse boxes and asks Jim if he would be interested in joining in on a profit-making scheme. This would require Jim to purchase fuse boxes and get other people to purchase these also and then to get their workmates to purchase them. The more people who made the purchase of these boxes the more money Jim would make. Jim loved the idea and signed up with a joining fee of $500.
The following week Jim thought he needed to spruce up his shop. He needed to increase his sales as well and decided to offer freebees to his regular customers. He ran a competition which offered $3000 worth of free electrical supplies from a raffle each month. When you purchased an item from the store you went into the raffle but Jim never actually held the raffle!
One Friday a customer walked into Jim’s shop and told him he wanted to wait around for the raffle! Jim tried to put him off and said he had already drawn the raffle. The customer looked confused because he had entered the store at opening time. Jim did everything he could to dissuade the customer from hanging around. Another customer walked into the store who was blind. Jim sold an item to this blind customer and charged her three times the actual price that was listed on the price tag! The customer who was waiting around for the raffle witnessed what happened and walked out of the store.
Another customer, James, walked into Jim’s store an hour later and purchased a complete fuse system for a block of high-rise units. This cost $75000. A contract for the sale of this item was signed and Jim had included a term which stated that he wasn’t liable or responsible for any faulty fuses or electrical wiring in the unit. Jim also said he doesn’t allow any refunds or exchanges under any circumstances regardless of whether there is a fault with the unit or not. Warranty on the unit only lasts 6 months with no allowance for extensions! Three months later the customer phoned Jim to complain that the unit was faulty! Jim argued that the unit was in perfect working order when it left the store and it must have been installed incorrectly. Therefore, the installer should fix the issue.
A week later, James was browsing Jim’s Website and noticed his own name on the site. It said “James Smith had purchased from my store and was very happy with his purchase”. James phone number was also listed at the top of the page as a contact if anyone wanted a real time review.
Identify all the legal issues that arise from the above problem and suggest any possible remedies that could be available for any plaintiff taking the action. Outline all possible causes of action, sections from any Act, cases and legal principles you can identify. Apply these to each action you are taking. Identify all parties to each action and comment on the likelihood of success.
Question 2 (25 marks)
Harry owns a sports store called “UpSport” in Westfields in the CBD of Sydney. He has a broad range of sports equipment, gym equipment, clothes, shoes and other apparel. Harry has a good reputation amongst famous sports stars and other professional players who are often in his store promoting his merchandise. There are three other similar sports stores in the CBD and Harry is on friendly terms with all three owners. John from “SideSport”, Bruce from “RackSport” and Bill from “Sportsequip” together with Harry have lunch one Friday afternoon at the ‘Machiavelli’ restaurant in Clarence Street. They discuss the current economic climate and the fact that interest rates have gone up by 3.5 percentage points over the last 6 months with further rate hikes to come. They compare notes on their takings over the last 6 months and have all experienced a 40% drop in turnover and 50% drop in profits. Over a steak, salad and red wine, they discuss possible ways of addressing this downward trend in their businesses.
Harry comes up with the idea of all four stores selling their merchandise at the same price and if they pitch their prices high enough customers can’t shop around for a lower price. This way they can make up for their recent loses. Most customers can’t be bothered going outside the CBD to shop as its convenient to shop in the city. They also talk about a couple of smaller sports stores who may cut their prices to get a greater slice of the market. They all agree that if this happens, they too will cut their prices to such an extent as to drive the smaller stores out of business. Once the smaller stores had gone bust, they would increase their prices back to where they were to retain their profit margins. Harry has several suppliers of his merchandise and one of them, “TennisPro” supplies Harry with Tennis Rackets. “TennisPro” has recently said to Harry that if he wants them to continue supplying him with rackets, he will have to purchase their tennis balls and other tennis accessories. If he didn’t they would cease supply. “TennisPro” also said that Harry had to purchase Gym equipment from another called company called “GymPro” and not from their current supplier of gym equipment. Harry discovers “TennisPro” has part ownership of “GymPro”. Harry reluctantly agrees to these demands.
The following Friday over lunch John from “SideSport” suggests that all four companies merge into one company. They must apply to the ACCC for this to occur but this merger would allow them to eliminate the smaller stores in the CBD by slashing their prices until they all go bust. This will enable John, Harry, Bruce and Bill to retain their profit margins.
Bruce’s store is on George Street in the city and its smaller than Harry’s, Bills or John’s. Bruce has one main supplier (Shoesforus) of Nike shoes and has been told by this supplier that he cannot under any circumstances cut his prices even at sales times. If Bruce reduces his prices on any item of Nike shoe, “Shoesforus” will withdraw all supply! Bruce makes sure his staff don’t include Nike shoes in any items for sale.
The CEO of “Shoesforus”, Brian, wants to develop his own line of athletic footwear and not rely so much on brand names like Nike. He spends the next two years developing his own line of athletic shoes and calls them the “Mike range”. They look very similar to other athletic footwear on the market but charges half the price. Brian thinks this will boost his profits. The way Brian makes his line of shoes is a bit of a trade secret and only his business partner who put the money up to invest in the brand knows how Brian does it. Six months later Brian and his business partner part ways and his partner Joe sets up his own shoe store using Brian’s design to manufacture a line of athletic shoes. Joe makes a big profit for the first year of opening. Joe is so happy with his success he decides to write a book about it. He publishes the book himself and has a deal with Dymocks bookshop in the CBD who will stock the book in time for Christmas. Brian discovers Joe has published a book and buys a copy. Brian also discovers Joe has published Brian’s own secret on how to design and manufacture his line of athletic shoes. Brian is considering taking an action against Joe for breaching his intellectual property.
Brian also invents a type of sole for his line of shoes and wants to get this protected. The sole is like no other on the market as it has special grooves to improve grip. Joe uses this very sole on his shoes and provides all the details in his new book.
Identify all legal issues arising from the above scenario. Determine who is suing who and what their cause of action is. Ensure you identify all relevant sections of Acts and any supporting case law. If you take an action for a particular breach, please ensure you outline the relevant elements required to take this action. Suggest any possible defences and/or remedies.
Question 3 (25 marks)
Marketing departments in companies should not concern themselves with advising their staff on the law but should leave this to the in-house counsel employed by the firm or to external lawyers as marketing executives are not lawyers. Do you agree with this statement?
Question 4 (25 marks)
The tort of “Passing off”, “Section 18 of the Australian Consumer Law” and the “Law of Trademarks” are essentially the same law but given different names. In other words, there is no point taking an action in all three at the same time because taking an action in one will suffice to get you the result you need. Do you agree with this statement?
Lillian works as a solicitor for a law firm in the city. She works from home two days a week and sees clients on the other three days in the office. Whilst working at home one day the lights go out
Marketing Law Final exam 2023