Candidate’s ID No:   ____________________________________

 

Candidate’s Name:    ____________________________________

 

Teacher’s Name:       ____________________________________

 

 

 EXAMINATION

NOVEMBER, 2001

 

 

ADVANCED DIPLOMA OF BUSINESS

VBF303 – Law of Marketing

 

 

QUESTION & ANSWER BOOK

 

 

 

MARKS
MULTIPLE CHOICE	20
CASE STUDY 1A	5
1 B	5
1 C	5
CASE STUDY 2 A	7
2 B	7
QUESTION     3	5
QUESTION     4	6
TOTAL	60

 

 

 

 

INSTRUCTIONS:

 

 

1.         Do not use pencil.  Papers submitted in pencil will not be accepted for marking.

 

 

2.                     Should you wish to repeat an answer:

 

            Cancel the answer you do not wish the examiner to mark.

 

 

4.         You may remove the multiple choice answer sheet from your booklet, but ensure you write you name on it and place it back in the booklet when finished.

 

5.         This paper carries 60% of FINAL ASSESSMENT in this subject.  Semester assessment carries 40%.  You must pass both the exam and the semester assessment to pass the subject.

 

 

6.         Candidates may refer to a Foreign Language Dictionary provided that it is not annotated or does not contain definitions of words.  Electronic dictionaries are not allowed.

 

 

 

MULTIPLE CHOICE QUESTIONS

1 MARK EACH

CIRCLE ANSWERS ON THE SHEET PROVIDED

 

Circle the answer you feel is the most appropriate to the question or statement.

 

 

1                    In order for Goods to comply with the TPA implied condition of fitness for purpose they must:

 

a                    be chosen by the buyer

b                    carry a recognised brand name or trademark

c                    always fit the person buying the item

d                    none of the above

 

 

2                    The Trade Practices Act :

 

a                    works in addition to any individual rights a consumer may have

b                    protects consumers against the purchase of goods and services sold only by partnerships and sole traders

c                    never includes rights against an importer

d                    only helps consumers who already have a written guarantee

 

 

3                    Misleading and deceptive advertising legislation:

 

a                    does not apply to oral claims made by sales staff

b                    does not cover “half-truths” or omissions made by sales staff

c                    does not include brochures and sales catalogues

d                    none of the above

 

 

4                    Pyramid selling :

 

a                    is legal in Victoria but not in the Commonwealth

b                    is legal as long as you do not have to pay to enter the scheme

c                    is banned because of its exploitative nature

d                    is legal in Egypt

 

 

5                    In any bailment, a bailor can :

 

a                    transfer possession and ownership of the goods

b                    transfer possession and control of the goods

c                    demand any sum of money they want for the use of the goods

d                    transfer only goods that the law allows to be hired for valuable consideration

 

 

6                    Copyright in a posthumously published photograph published in 1999 will lapse in:

 

a                    2099

b                    2039

c                    2999

d                    2049

 

 

7                    Monica tells Bill her life story. Bill writes it down and publishes it in his own words. Who owns the copyright :

 

a                    Bill

b                    Monica

c                    Bill & Monica

d                    Bills publisher

 

 

8                    Trademarks are capable of protection :

 

a                    for 50 years

b                    as long as the product is manufactured

c                    indefinitely

d                    death plus 50 years

 

 

9                    Patents protect :

 

a                    inventions

b                    inventions and designs

c                    all Australian ideas

d                    computer programmes

 

 

10                Design protection covers :

 

a                    house plans

b                    stamp designs

c                    dress making patterns

d                    none of the above

 

 

11                Trademark registration can be refused or revoked :

 

a                    if there is prior use by another party

b                    when the owner goes bankrupt

c                    when the user uses the mark for over 50 years

d                    of the applicant is not an Australian citizen

 

 

12                Bait advertising occurs :

 

a                    when customers are attracted by offers when there is no intention to supply the goods or services 

b                    when customers are attracted by advertising special prices for goods which are not available

c                    when unsolicited goods are sent to consumers

d                    when free services are offered with the purchase of certain goods

 

 

 

13                Which of the following is not a criterion for valid appointment of agent by necessity?

 

a                    When the principal is unable to be contacted

b                    When the act is capable of being ratified

c                    When the agent holds the principal’s property

d                    When the agent is acting the principal’s best interest

 

 

14                Which of the following methods of appointment of agency are created impliedly?

 

a                    Co-habitation

b                    Necessity

c                    Estoppel

d                    All of the above

 

15                Which of the following is not true of appointment of an agent by ratification?

 

a                    The Principal must ratify the contract within reasonable time

b                    The Agent must state that they are acting for a Principal

c                    Ratification must apply to the whole of the contract

d                    The Principal must be uncontactable

 

 

16                Apart from duties Agents also have rights.  One of these is the right of lien.  This means:

 

a                    The Principal must indemnify the Agent for reasonable expenses incurred

b                    The Agent has the right to retain the Principal’s property in certain circumstances

c                    The Agent is entitled to receive commission

d                    The Agent has the right to delegate authority to a more experienced person

 

 

17                An agent appointed to carry out a particular task is called a:

 

a                    general agent

b                    special agent

c                    universal agent

d                    mercantile agent

 

18                The authority an agent has been given by their principal is called:

 

a                    apparent authority

b                    ostensible authority

c                    expressed authority

d                    implied authority

 

19                An agent will be personally liable on a contract if they:

 

a                    act within their authority

b                    disclose the name of their principal

c                    are appointed ostensibly

d                    they do not disclose the existence of their principal

 

20                The practice whereby a person, acting in concert with another, hinders or prevents the supply of goods or services by a third party to a corporation is called:

 

a                    a primary boycott

b                    a secondary boycott

c                    exclusive dealing

d                    price fixing

 

MULTIPLE CHOICE ANSWER SHEET

NAME ………………………………

 

 

1.	A	B	C	D
2.	A	B	C	D
3.	A	B	C	D
4.	A	B	C	D
5.	A	B	C	D
6.	A	B	C	D
7.	A	B	C	D
8.	A	B	C	D
9.	A	B	C	D
10.	A	B	C	D
11.	A	B	C	D
12.	A	B	C	D
13.	A	B	C	D
14.	A	B	C	D
15.	A	B	C	D
16.	A	B	C	D
17.	A	B	C	D
18.	A	B	C	D
19.	A	B	C	D
20.	A	B	C	D

 

Case Studies

 

Question 1

Part A

Leigh, Robert and Eugene are all students at the Swinburne School of Chemical Engineering. They are all very diligent students, taking their studies very seriously, but also have part-time jobs.

 

Leigh has worked for Ice Is Us, a ski and skate shop for the past 5 years, during which time he has built up a loyal clientele who value his expert advice.  Margaret, the Olympic ice skater is one of them.  She was in the shop recently to buy some speed skates.  Leigh didn’t have anything appropriate in stock, but explained that as he had some friends who were in the industry of manufacturing and distribution of speed skates, he could get them for her.  Margaret had a great deal of faith in Leigh so she simply instructed him to “Get me the best you can for $350.”  The following Saturday Margaret went to see Leigh at the shop where he gave her a pair of Powder Slice skates.  These are considered to be the best on the market, and generally retail for $400.  Leigh was able to procure them for $280.  Is he entitled to keep the $70 difference between the actual and the authorised cost?  Why/why not?

 

 

Part B

 

Rob’s part-time job is more relevant to his field of study.  He works for the international pharmaceutical company Morris, Dancer & Smiles.  His role involves the sourcing of new products.  Caitlin is a fellow student and friend of Rob’s.  Her particular interest is in natural health products.  She has recently developed a product which she calls the Multi-Dimensional-Mood-Alterer (MDMA), which is a herbal anti-depressant.  Rob was very eager to purchase the product for his company so without authority from his manager (who was away on holidays), he negotiated a deal with Caitlin for the exclusive rights to manufacture and distribute MDMA.

One week later Caitlin contacted Rob, saying she’d received a better offer from another company and that she had accepted it.

Is there any way for Rob to hold Caitlin to the contract?

 

Part C

 

Eugene’s works part-time at a nightclub as a bartender.  Recently, Anthony, one of his customers, collapsed from heat exhaustion and Eugene phoned an ambulance to take the him to hospital. 

Fortunately Anthony recovered, but was horrified to receive an account for $700 from the ambulance service two weeks later.  He decided that as Eugene had called the ambulance, he should be liable for the bill, so he took it into the nightclub and gave it to Eugene who is very concerned that he might have to pay for it.

Advise Eugene as to his rights.

 

Question 2

Part A

 

Lucy and George own a carpet cleaning business.  They are very eager to expand the business and make lots of money.  They have come up with a number of ideas in order to increase their business, but are completely ignorant as to any possible consumer law implications and decide to ask you for advice regarding the following:

 

i)          They plan to run an advertising campaign on television, offering free curtain cleaning to the first 50 customers that telephone their response to the advertisement.  They then plan to tell these customers that they have only just missed out, and that they are the 53rd caller.

 

ii)         In order to save money on expensive carpet cleansing solvents, Lucy and George have developed their own recipe for a carpet cleaner based on mixing a number of commercial laundry detergents. 

 

iii)        They claim their cleaning equipment is the same as that used by the Queen at Windsor Castle.  In fact the Queen doesn't clean her own carpets, but the cleaning staff at Windsor Castle do use the same equipment as Lucy and George.

 

iv)                 They plan to offer discounts, on completion of the job, to customers who give them the names and phone numbers of some of their friends.

v)                   

Explain the consumer law implications regarding the above promotional activities.

 

Part B

 

Zoe is a make-up artist who specialises in weddings.  Joane, who is getting married next month has hired her to apply her wedding make-up.

 

Joane explained to Zoe that she wanted a ‘natural’ look for her wedding, and also was allergic to ‘guano’ an ingredient found in many cosmetics.  Zoe reassured her that all of the products she uses are guano-free, and that Joane would have no problems with them.  As a result of this Joane also decided to order a few of the products.

 

Zoe arrived and Joane’s home on the morning of the wedding with her make-up kit and  the products that Joane had ordered.  Shortly after Zoe started applying Joane’s make-up she began complaining of a tingling sensation.  Zoe told her not to worry, and continued to apply the make-up.  Several minutes later, Joane’s eyes were stinging, and she told Zoe to stop work as her face felt as though it was on fire.  Zoe noticed that Joane was very red and starting to blister.  She quickly removed the cosmetics from Joane’s face, but by the time they had been removed, her face was so swollen, and she was in such pain that an ambulance was called to take Joane to hospital.

 

Zoe looked at the product’s label for the ingredients, but as this was written in German she couldn’t understand it.  She phoned the manufacturer to query this, and received a translation and, not surprisingly found ‘guano’ on the list.  A further investigation also revealed that the other products Joane bought contained guano.

 

Joane spent 2 weeks in hospital recovering, and planning her consumer revenge against Zoe and/or the manufacturer.

 

Explain the likely outcome of this case in relation to the Trade Practices Act.

 

Question 3 (5 marks)

 

The Trade Practices Act (1974) has two main aims.  One is consumer protection, the other is the protection of ‘competition’.  Discuss how the legislation protects the ‘competitive environment’.

 

 

Question 4  (6 marks)

 

Select EITHER of the following questions to answer.

 

Option A

Shannon, Sandra and Mathew are embarking on a new business venture selling fitness and sport gear called  'Up, Up and Away'. 

 

Being part way through their business course at Swinburne they are aware of the dangers of bad debts and decide to seek the advice of their trusted friend Claire. 

 

They employ Claire as Credit Controller and ask her to:

 

a)      outline a credit management policy for their business to minimise bad  debts               

 

b)      discuss what  procedures must be followed if a  credit check is to be undertaken

 

c)      Discuss the issues related to recovering a debt and the process undertaken to obtain a judgement

 

OR

 

Option B

 

a)      Explain the criteria necessary to register a patent for a product

 

b)      What types of works are covered by copyright

 

c)      Give examples of situations when work which is copyright protected may be used without fear of breaching the Copyright Act.