Law201A Business And Law- Consumer Assessment Answers

d. Critically examine the brochure and identify any exclusion or limitation clauses and explain using the principles of contract law whether the clauses would be valid.

Answers

Introduction

Laws are legislations that govern behaviors and actions of businesses, governments and entities. A business is an entity that is formed to make profits (Appleman & Holmes, 2015)). Business and law cannot be separate institutions because every business must be governed by regulations. Either its start-up, operations or closure. Similarly, service providers like travels and tours have regulations that govern them which protect their rights and the consumers (Appleman & Homes, 2015). It is a hospitality industry and generally works on the appealing effect they have on potential customer.

That said, there are certain breaches like contract laws that may affect either the business entity, the consumer or both. Contract law relates to the transfer of rights from one person or organization to another. This could be spelt as either unilateral (a promise made by one entity to the other), or multilateral, (binding to both players) (Clarkson & Cross, 2014). The following discussion describes breaches to contract laws, representations, bait advertising among other business legal issues.

a. Sample Brochure and Information

The case study herein explained relates to Summer Holidays Company Ltd offer of Caribbean holiday package at an island in the Caribbean Ocean. A brochure for the same was issued to potential customers which appealing costs and service provisions (Clarkson & Cross, 2014). To begin with, the holiday package is meant to begin on 1^st May 2017. The brochure was issued in late December 2016.

Secondly, a booking fee of $1000 per head must be paid before 1^st January 2017 and can only be refunded if a client cancels the booking before March 2017 (Rutledge, 2014). Facilities at the destination hotel are listed as swimming pool, tour guidance to the nearest game park, sauna, free breakfast and lunch time meals. The air tickets must also be booked before 10^th February 2016.

Also included in the package are free; three day learning to surf package, entrance fees to museums and cultural sights. The brochure continues to state that the first 100 people who subscribe in time will get discounts (Rutledge, 2014). Every other subscriber will have a chance to enjoy an exclusive sea cruise ship before the end of the holiday season which goes for 1 month.

b. Contract Law Issues in the representations, terms, conditions and warranties.

The package mentioned above represents appeals to what many customers need. Everybody would want cheap and affordable holidays that virtually satisfies their relaxation and dreams (Crane & Matten, 2016). The brochure has mentioned that there is possible visit to a game park at the island where the holiday camp shall be set up (Wild & Han, 2014). Possibility of finding a game park in the middle of an ocean island could be misleading. Museums and cultural sights may also seem unrealistic.

The terms of the holiday tour are also well indicated. The company states that potential customers must subscribe to the tour before the 1^st of March 2017 which is about two months before the effective date of the holiday (Wild & Han, 2014). Customers are also advised to book travels before the 10^th of February 2017. All these represent the terms of the holiday package.

The conditions set for the holiday indicate that if a customer cancels their subscription before the 1^st of March 2017, then they will be refunded. The said refundable fee to this package is $1000 per person and must be paid by 1^st January 2017 if one wants to book a slot for the holiday (Wild & Han, 2014). The warranty herein noted is a period of six months i.e. December 2016 to March 2017. This means that ones that time elapses, then a customer can neither claim refund nor be eligible to the package.

c. Analysis

• Unconscionable

Unconscionable relates to conscience. This means that if something is presumed unconscionable, the perpetrators of the act do not gain benefits but losses (Coffee et al., 2015). In contract law, unconscionable behaviors give unfair advantages to one party. The above mentioned brochure states that the first 100 subscribers to the holiday package will be given discounts (Coffee et al., 2015). However, nobody can confirm if they are among the first 100 people and if the company has indeed given the discounts as stated. This gives unfair advantage to the holiday organizing firm.

• Misleading or deceptive

A misleading or deceptive information is one that is consciously indicated by a company or institution. In the described scenario, it is misleading to tell customers that they will have a chance to visit the nearest game park while the company knows that there are no such sceneries on an island in an ocean (Coffee et al., 2015).

In another scenario, it could also be deceptive for the company to indicate that they are offering free breakfast and lunches, free entrances to museums and cultural sights and cruising in the ocean while these are hidden costs that the customers may incur when at the holiday sight (Coffee et al., 2015).

• False representation

False representation is also a strategy used by most hospitality industries to get customers. For instance the brochure states excusive facilities in the hotel like the sauna, swimming pools among others. On reaching the island hotel, customers may find out that the mentioned facilities do not exist (Crane & Matten, 2016). Unconsciously, for example, the prospect of cruising in a ship or visiting museums and cultural sceneries may be appealing to a potential customer while in reality, these facilities may not be available

• Bait advertising

Consumer laws states that it is illegal for companies to offer goods and services at a low price if they know that they are not able to retail at such indicated prices (Crane & Matten, 2016). As mentioned before, travel and tour companies deal with appealing and packaging of their offers. Also noted above is misrepresentation. A potential and unsuspecting customer may be drawn into a deal that only requires their subscription.

In the example given with the holiday package in the brochure indicated in this text. It can be defined as bait advertising for instance the possibility of freely cruising in a ship while on holiday (Crane & Matten, 2016). Additionally, the company gives an allowance of approximately six months if a person wants to pull out of the holiday. If for example a customer realizes that the offers of free lunches in the package are not real, or may be facilities promised said do not in fact exist, they may decide to pull out of the engagement.

However, because the company had indicated that they can only refund the initial fee of $100 before the 1^st of March 2017, some unsuspecting subscribers may realize this when it is late (Crane & Matten, 2016). The company therefore ends up falsely profiting from the subscriptions as the customer loses.

• Offers gifts or prizes

The brochure discussed here indicates that the first 100 people shall be given lower charges to the holiday package. This is an offer or gift also meant to bait people to joining the trip (Percival et al., 2013). Some companies also give prizes, for instance the described scenario may announce that traveling families that are composed of more than 5 individuals would receive a prize.

d. Effects of Representations and Breaches to Customer/ Consumer Protection laws

In many countries, misrepresentation laws and acts exist. They are meant to protect the rights of the consumers against any potential fraudulent or false representations that lead a customer into buying services or goods (Percival et al., 2013). These laws also allow customers to claim damages through legal means.

The legal settlements to misrepresentations or breaches to customer contracts maybe either damages or unwinding of the provided contract (Percival et al., 2013). Damages relates to refunds of money for instance in our example, if customers ended up paying for the cruise chip services and meals, the can claim refund from the company.

Unwinding of the contract can be done through nullification of the contract especially if the customer had not used the services or goods provided (Lieberman, Warner & Mayer, 2016). In our indicated brochure, if customer realizes that they will not receive services like free meals in the package, they may decide to terminate their subscription with the Summer Holidays Company Ltd

However, there are limitations to misrepresentation claims. In as much as there are legal means to recover ones lost funds, they can also have legal barriers to their claims (Lieberman, Warner & Mayer, 2016). In our discussion above, if a customer realizes that the holiday destination they are headed to do not have game parks but nevertheless goes ahead with the package, they may not be eligible for repayments. This means that they have affirmed the arrangement in spite of having knowledge of the misrepresentation.

It is therefore advisable that once a person realizes a breach in contract, be it the consumer or the provider or services, they should terminate the contract or sue for damages (Lieberman, Warner & Mayer, 2016). Waiting for time to elapse may lead to customers or consumers losing money and companies having bad reputation.

Many a ties the consumers believe that they are the only ones protected by the business laws. However, they should be aware that the same laws that protect them are the similar ones provided for the protection of the service provider of producer of goods (Kubasek, Brennan & Browne, 2016). In this light, consumers should be aware that some unscrupulous businesses may take advantage of certain clauses in regulations and customer ignorance to bait, misrepresent and defraud them

Limitation clauses and  Principles of Contract Law

The sample brochure as discussed in this text provides a perfect example of challenges faced by consumers in the realm of contract laws. To begin with, there are limitation clauses to the time or period required for consumers to subscribe to the services provided by the stated company (Kubasek, Brennan & Browne, 2016). The package provider indicate that potential customers must register before the 1^st of January 2017. Their refund period has also been noted as up to 1^st March 2017. This is legally proper depending on the available regulations in various territories.

Unfortunately, settlements and procedures to resolve disputes that may arise from this arrangement are not indicated in the brochure (Park, 2012). Consumer rights and laws require that the information document provided should highlight how the company intends to settle any damages and procedures to resolve any potential disputes.

The consumer/customer agreements in this particular scenario is rather a unilateral. This is because only the company is offering the rules of engagement (Dolzer & Schreuer, 2012). Best practice would be for both the package providers and subscribers to have a bi lateral kind of a brochure where the consumers also know their responsibilities in engaging in this arrangement.

The other notable provision by contract laws is that any illegal contracts or sections lead to a contract becoming void. This means that for instance in our example, the consumers may sue the company for providing them with false information in regards to certain services like swimming pool and goods like free meals (Dolzer & Schreuer, 2012). In this case, the initial contract becomes null and void.

Another point to understand in the law of contracts is impossibility. There are certain promised services that may not be accomplished because of unavoidable circumstances (Johnson, 2013). For instance, this package comes with the promise of free surfing and cruising in the ocean. Impossibility to this service may come in when for instance there is storm in the ocean and it is deemed unsafe for customers to enjoy such a service (Johnson, 2013). The law understands that at that instance, the consumer cannot claim redress or damages.

Finally, there are ambiguities that are created to benefit customers. Such kind of promises like offering subsidized fees for the first 100 subscribers to the holiday package may be ambiguous (Disch, 2016). This is because many people may be attracted to rushing into the payment while in fact the company does not realty mean reducing the package price (Johnson, 2013). It is also not possible for a consumer to note if the provider fulfilled the promise of reducing the fees or even if they were among the customers entitled to the subsidized payments.

In conclusion, the provided Summer Holidays Company Ltd brochure information have both efficient and unlawful sections. The terms and conditions are clear but the offers are inefficient in terms of their legality (Disch, 2016). It is advisable that the brochure is reviewed such that representations, advertising, offers and services promised are valid and existent. The brochure should also be bilaterally presented such that both the customers and the company are well aware of their legal mandates.

References

Appleman, J.A., Appleman, J. and Holmes, E.M., 2015. Excuses for Nonpayment and Defenses to Actions for Premiums (Vol. 5). Appleman on Insurance Law and Practice.

Clarkson, K., Miller, R. and Cross, F., 2014. Business Law: Texts and Cases. Nelson Education.

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Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Disch, L., 2016. Representation. In The Oxford Handbook of Feminist Theory.

Dolzer, R. and Schreuer, C., 2012. Principles of international investment law. Oxford University Press.

Johnson, L., 2013. Unsettledness Delaware Corporate Law: Business Judgment Rule, Corporate Purpose. Del. J. Corp. L., 38, p.405.

Kubasek, N.K., Brennan, B.A. and Browne, M.N., 2016. The legal environment of business: A critical thinking approach. Pearson.

Lieberman, J., Siedel, G., Warner, D. and Mayer, D., 2016. Business law and the legal environment.

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Percival, R.V., Schroeder, C.H., Miller, A.S. and Leape, J.P., 2013. Environmental regulation: Law, science, and policy. Wolters Kluwer Law & Business.

Rutledge, T.E., 2014. A Corporation Has No Soul—The Business Entity Law Response to Challenges to the PPACA Contraceptive Mandate.

Wild, J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.