The Test the Court Uses for Determining If the Conduct Is Unconscionable - Essay Example

UNCONSCIONABLE CONDUCT Name: Course Instructor’s name Institution Date UNCONSCIONABLE CONDUCT The jurisdiction that touches on unconscionable conduct defines it a too harsh conduct by a business or individual that is way overboard to an extent that it goes against good conscience. Therefore, for conduct to be considered unconscionable, it has to be unfair and oppressive to the other party. However for the business, an action is considered to be unconscionable if it is way beyond the commercial bargaining frameworks. The Australian Consumer Law cautions businesses against engaging in unconscionable conduct when they are dealing with their customers or other businesses. In the case of unconscionable conduct, the court of law intervenes in order to prevent the perpetrator from benefiting from the conduct. Question 1: Explain the test the Court uses for determining if the conduct is unconscionable. In a court's consideration whether conduct is unconscionable or not it has to review some factors. These are factors which help the court in assessing unconscionable conduct in relation to supplying or selling goods and services to a customer or acquiring of services or goods from a business. The bargaining strength of the parties: In this case the court reviews the bargaining strength of the parties through assessing the bid offered and the financial strength of the party placing this bid. However, in this case, the financial strength is not the only issue that is reviewed since there are other contributing factors which determine the bargaining strength of a party (Commission, n.d.). Whether the weaker is being imposed on unattainable that were not reasonable: In this case, the court will access the conditions imposed on the weaker party and assess if they are reasonable or not for the protection of the legitimacy of the stronger party Whether the documentation presented to the weaker party are understandable to them: In this case, the court would review the documentations presented to the weaker party and assess whether the content in the document is understandable to these parties or not. The use unfair tactics by the stronger party which includes pressure or undue influence: In this case the court assesses the tactics used by, the stronger party in influencing the weaker party in making the deal. This involves assessing whether there is unfair intimidation to the weaker party (Paterson and Brody, 2014). The application of the industry’s codes and requirements: In this case the court will assess whether the stronger party has applied the industry’s’ and codes in his role in the deal The strongest party’s willingness to negotiate: Here the court will assess whether the strongest party gave the weaker party a chance to negotiate or not. The extent of the act of good faith in both parties: In this case the court of law will assess the level of sincerity of the stronger party to deal fairly with the weaker side. However, the court of law is not confined to review these factors only in fact it has the right to review any other factor that is sees might have caused unconscionable conduct. This is because this issue is quite diverse with cases various differing from each other     Question 2: Find another case study in the last 5 years indicating unconscionable conduct Question 2 Part A: Alleged unconscionable conduct Lux business dealings where it sold a total of five vacuum cleaners to five elderly women which ACCC claimed was an unconscionable conduct. In the sale, Lux followed the required standards which started with a telephone call to the ladies with the intention of offering a free maintenance check to the vacuums. However, the caller was keen to omit the information that the call was a strategy to sell them new vacuum cleaners once the maintenance technicians visited their homes if that opportunity arose. Lux representative attended the homes of the potential buyers as promised and among these representatives, they were not subjected to any task but make the maintenance checks. However they would not earn anything from providing these services, but they would be earning a commission if they made some sales. In the course of these maintenance visits each agreed to make the purchase of a new vacuum cleaner which cost around $1,999 (Zhou, n.d.). ACCC, in this case, accused Lux of using unscrupulous tactics in order to ensure that the five women made the purchase of their products the vacuum cleaners. Question 2 Part B: Court ruling The court decides in favour of Lux claiming the ACCC did not follow-up on the matter since it didn’t seek evidence from two of the five ladies’ due to medical reasons. Instead, ACCC relied on the family member’s narration and the transaction documents records from Lux. Therefore, the trial judge claimed that some of this information used by ACCC was inadmissible the judge went on to claim that this was a significant obstacle to the evidence developed to establish unconscionable conduct. According to the judge vulnerability of the consumers due to their age makes them unable to provide critical evidence for unconscionable conduct. He, therefore, ruled in favour of Lux (Sheehy, n.d.). ACCC appealed the ruling in relation to the three women who it had conducted an investigation on and Lux conduct towards them. The judges from the Court of Appeal agreed that the trial judge did not consider the deception which Lux had engaged in. In this case, it found Lux guilty for failure to disclose purpose for the maintenance visit of its representatives to the women it had contacted. The judges claimed this was a critical issue which might have been the cause for the purchase of the vacuum cleaners. The sales tactics used by Lux was also claimed to contribute to the purchase of the vacuum cleaners by the women since the long hours spent at their home led to more being subjected to more pressure to make the purchase. The court, therefore, ruled in favor of ACCC Question 3: Should courts apply rules to unconscionable conduct? Evidently unconscionable conduct is a quite complex issue which is difficult for one to point out. This is revealed in the ACCC vs. Lux case where the judge in the first ruling did not consider the action by Lux, which later was highlighted in the appeals ruling. On the other hand the ACCC VS COLEs Ltd court case was significant for its legal batter which shows how this matter is complex especially now that there are no olaws governing this area of law.This reveals the complexity of this law to an extent that it has confused a qualified in judge in a court ruling. Similarly, this law is also complex to the public and business, in general, this, therefore, calls for the intervention of the government in coming up with governing rules in order to make this law less complex and easy to understand (Kelly,Joe 2010). On the other hand, the revealed steps and factors that the court of law follows or considers in ruling in this case law reveal how complicated it can be. This, therefore, is more evidence that gives more reasons why the government should intervene in this particular area of law (Salmond, n.d.). One can argue that it is difficult to distinguish whether an action taken by a business or individual is unconscionable conduct or a mere business strategy that guarantees the best from a deal. In the case, ACCC vs. Lux; Lux can argue that they were not aware that their sales strategy was unconscionable conducts as ruled by the court of appeal (Sharpe and Parker, n.d.). The government intervention, in this case, should enforce the law that ensures that the commercial agreement between parties is made in writing in order to prevent intimidation or unfair terms which are prone in the unwritten business transaction. On the other has in the ACCC VS COLEs Ltd the courts were required to determine the contraventions that Coles Ltd was accused of (Gibbons,Fleur;Uthmeyer,Simon 2015)”. Since there is nor accurate measure of these matter the courtsa have a much difficult task in making a ruling especially now that ther are no government laws relating to this juridiction.The government can also enforce the law that calls for the use of understandable language in the written document in order to ensure that there is no exploitation. Lastly, it can also enforce a law that gives the weaker party authority to pursue legal action in case they feel oppressed in the making of a business transaction. This will give the weaker party in a business transaction a voice in order to ensure that they are not oppressed by the stronger party in a business deal. Despite the complexity of the unconscionable conduct law, it can be said to be a relief to the weaker parties in business transactions which have been victims of oppression by the stronger party. Unconscionable conduct law, in this case, can be said to be a voice for the weaker parties. However, it is agreeable that this law comes with a lot of complexity however the benefits it offers is much more important compared to it negative effects. Refernces Commission, P. (n.d.). Australian and New Zealand Competition and Consumer Protection Regimes. SSRN Electronic Journal. Gibbons,Fleur;Uthmeyer,Simon(8 April 2015)”Pecuniary penalty order aganistColes win for good standards of conduct in commercial dealings”(PDF) .DLA Piper.,discussing AustralianCompetition and Consumer Commission vColes supermarkets AustrlianPty Ltd(2014)FCA 1405(22 December 2014) Kelly,Joe(31December 2010)”Shoppers and parents among those benefitfrom law changes at midnight”The Australian.Retrived1st May 2016. Paterson, J. and Brody, G. (2014). “Safety Net” Consumer Protection: Using Prohibitions on Unfair and Unconscionable Conduct to Respond to Predatory Business Models. J Consum Policy, 38(3), pp.331-355. Salmond, R. (n.d.). Searching for the 'Average Consumer' within the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277). SSRN Electronic Journal. Sharpe, M. and Parker, C. (n.d.). The ACCC Compliance and Enforcement Project: Assessment of the Impact of ACCC Regulatory Enforcement Action in Unconscionable Conduct Cases. SSRN Electronic Journal. Sheehy, B. (n.d.). Unfair Trade as Friendly Fire: The Australia-USA Free Trade Agreement. SSRN Electronic Journal. Zhou, Q. (n.d.). An Economic Perspective on Legal Remedies for Unconscionable Contracts. SSRN Electronic Journal. Read More