Module 1 - Contracts of sale

These activities explore financial decision-making and the contract of sale between a consumer and a retailer.

Learning outcomes:

• recognise that purchasing goods or services involves a contract with terms and conditions
• outline the steps they could take to remedy a dispute with a retailer.

Key concepts:

• Contracts
• Financial decision-making

Conceptual understandings:

• Buyers and sellers have responsibilities under, for example, the Fair Trading Act.

Activities

Through class discussion, explain that when we buy goods we enter into a contract with the seller that includes specific terms and conditions.

1. Consumer decision-making activity

Have the students complete the consumer decision-making activity and share their understanding of consumer rights as they explore the options, safeguards, and pitfalls Jay faces when he decides to buy a cell phone. Have them discuss the best outcome for the consumer. 

Consumer decision-making activity(external link)  — Jay buys a phone

Note on activity links and browser updates 

We suggest using an up to date browser to open the learning activity links. Go to Update your web browser(external link) for more information.

(external link)

2. Terms and conditions

Have the students choose an item they may wish to purchase online and go to a website where the item is available for sale. They must then locate the terms and conditions of sale that apply to the item they are considering purchasing.

Have the students identify:

• a positive term or condition of the sale
• a term or condition of the sale they didn’t understand
• a term or condition of the sale they consider to be unfair
• a term or condition of the sale that was interesting.

In small groups the students can feedback and discuss their findings, noting similarities and differences in the contracts of sale they investigated.

3. Unfair contracts terms

Discuss how contracts may sometimes be unfair. Have students list possible terms and conditions that could be unfair. They can then read through the information on the Commerce Commission fact sheet, Consumers and Unfair Contract Terms(external link) to find out what they can do should they believe a contract is unfair.

As a class exercise summarise why it is important that consumers understand the terms and conditions of a sale.

Discuss other information that consumers should seek before agreeing to a significant purchase. This includes:

• product information
• price comparisons
• the reputation of the retailer.

4. Disputes

Have the students view the Commerce Commission video clip It’s All Good – Episode 9 [2 mins 16] to introduce an example of a dispute about a contract of sale.

Separate the class into small groups and have them discuss this scenario.

You have saved up to buy your first car. The sales person at the local car yard assures you the car you have chosen to buy is in good condition and has no major defects. You buy the car but on your way home the engine starts to shudder and produces a lot of smoke.

You return to the car yard but the salesperson has disappeared and is not returning your calls. The manager of the car yard refuses to take any responsibility for the problems with the car. What legal rights do you have?

Students can visit the Ministry of Business, Innovation and Employment website which has a section on consumer rights(external link) . They can also view this Australian video, Consumer Guarantees – in Detail(external link) [6 mins 28 secs], before deciding on actions to take to resolve the issue. Have the groups explain why they think their chosen action/s would be effective, before writing a realistic ending for the scenario.

5. Reflecting on our learning

Have the students apply their new understandings of consumer rights by repeating the consumer decision-making activity(external link) . Have them discuss the best outcome for the consumer.