1.5.4

Legislation & Business 2

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Consumer Law

These are laws that are designed to protect customers against unfair treatment by businesses. They include laws involving faulty goods, dishonest advertising and warranties. Consumer law protects consumers by:

Not fit for purpose

Not fit for purpose

  • A product must be able to do what it was sold to do.
    • Businesses cannot sell a car with a faulty engine if they advertised for sale a working car.
Trade descriptions

Trade descriptions

  • Trade descriptions are how a business describes a product and the product’s benefits. Consumers are protected because businesses must tell the truth about their products and services.
    • Red Bull does not give you wings. In 2014, Red Bull was sued by a man in Australia who said that he had bought the drink for the past 10 years on the grounds that it gives you wings and 10 years later he had no wings.
    • This may seem like a joke but Red Bull was forced to pay out AUD13 million in compensation.
Satisfactory quality

Satisfactory quality

  • A product must be of satisfactory quality.
    • Consumers will be protected if they are sold a chair that breaks after sitting on it once.
  • This impacts businesses because of the potential costs associated with consumer laws and consumer protection.
    • Asda pays £2 on top of any refund to customers who buy faulty products from them to compensate for any inconvenience or extra travel costs.
Consumer laws (legislation)

Consumer laws (legislation)

  • Consumer laws also impact businesses by forcing a focus on product and service quality. Countries with stronger consumer protection laws may lead businesses in that country to produce higher quality products.
  • For example, Volvo and Audi car dealerships only sell used cars after a rigorous quality check. They then label these cars as “Approved”.

The Impact of Legislation on Businesses

Legislation (laws) often changes and this can affect businesses.

New practices

New practices

  • Businesses may have to introduce new practices or change their operations in response to new legislation.
  • For example, working time directives enforce break periods for workers at certain intervals. McDonalds or Burger King may have to change their workers’ shift patterns if working time directives change.
Increased costs

Increased costs

  • Businesses may experience an increase in costs because of new legislation.
    • For example, if the national minimum wage rises, businesses that employ lots of low paid workers may have to increase a lot of their workers’ wages.
    • However, this may make businesses less price competitive. This is likely to hit manufacturing businesses harder because consumers are unlikely to import a burger from China or Taiwan, but they may do the same for a car or clothes if they were cheaper
Jump to other topics
1

Investigating Small Business

1.1

Enterprise & Entrepreneurship

1.1.1The Dynamic Nature of Businesses1.1.2Risk & Reward1.1.3The Role of Business Enterprise1.1.4The Role of Business Enterprise 21.1.5The Role of the Entrepreneur1.1.6End of Topic Test - Dynamic Nature of Business1.1.7Grade 9 - Dynamic Nature of Business
1.2

Spotting a Business Opportunity

1.2.1Customer Needs1.2.2Market Research1.2.3Market Segmentation1.2.4The Competitive Environment1.2.5Primary & Secondary Market Research1.2.6End of Topic Test - Business Opportunities1.2.7Application Questions - Business Opportunities1.2.8Exam-Style Questions - Market Segmentation1.2.9Diagnostic Misconceptions - Competition
1.3

Putting a Business Idea into Practice

1.3.1Business Aims1.3.2Business Objectives1.3.3Business Revenues & Costs1.3.4Costs - Calculations1.3.5Revenue - Calculations1.3.6Business Profits & Break-Even Analysis1.3.7Profits & Losses - Calculations1.3.8Interest - Calculations1.3.9Cash & Cash Flow1.3.10Cash & Cash Flow 21.3.11Cash Flow - Calculations1.3.12Sources of Business Finance1.3.13End of Topic Test - Business in Practice1.3.14Grade 9 - Business in Practice1.3.15Exam-Style Questions - Business in Practice1.3.16Diagnostic Misconceptions - Profit1.3.17Diagnostic Misconceptions - Company vs Business1.3.18Diagnostic Misconceptions - Economies of Scale1.3.19Diagnostic Misconceptions - Cash Flow1.3.20Diagnostic Misconceptions - Break-even1.3.21Diagnostic Misconceptions - Fixed Costs
1.4

Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses1.4.2Limited Liability1.4.3Franchising & Not-For-Profits1.4.4Business Location1.4.5The Marketing Mix1.4.6Business Plans1.4.7End of Topic Test - Effective Business1.4.8Application Questions - Effective Business1.4.9Exam-Style Questions - Business Plans
1.5

Business Stakeholders

1.5.1Business Stakeholders1.5.2Technology & Business1.5.3Legislation & Business1.5.4Legislation & Business 21.5.5The Economy & Business1.5.6External Influences1.5.7End of Topic Test - Business Stakeholders1.5.8Grade 9 - Business Stakeholders1.5.9Diagnostic Misconceptions - Recessions
2

Building a Business

2.1

Growing the Business

2.1.1Business Growth2.1.2Finance2.1.3Changes in Business Aims & Globalisation2.1.4Ethics & Business2.1.5The Environment & Business2.1.6End of Topic Test - Growing a Business2.1.7Application Questions - Growing a Business2.1.8Exam-Style Questions - Business Growth
2.2

Making Marketing Decisions

2.2.1Product2.2.2Product Life Cycle2.2.3Price2.2.4Pricing Methods2.2.5End of Topic Test - Product & Price2.2.6Grade 9 - Product & Price2.2.7Promotion & Advertising2.2.8PR & Sales Promotions2.2.9Sponsorship & Product Placement2.2.10Promotional Mix2.2.11End of Topic Test - Promotion2.2.12Application Questions - Promotion2.2.13Exam-Style Questions - Promotional Mix2.2.14Place & Wholesalers2.2.15Direct to Consumer2.2.16E-commerce & M-commerce2.2.17Diagnostic Misconceptions - Decreasing Price2.2.18Diagnostic Misconceptions - Advertise vs Promote2.2.19Diagnostic Misconceptions - Social Media
2.3

Making Operational Decisions

2.3.1Job Production2.3.2Batch & Flow Production2.3.3Working with Suppliers2.3.4Effective Supply Chains2.3.5Just In Time & Just In Case2.3.6Managing Quality2.3.7Total Quality Management2.3.8The Sales Process2.3.9End of Topic Test - Operational Decisions2.3.10Grade 9 - Operational Decisions2.3.11Exam-Style Questions - Managing Stock2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4

Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions2.4.2Gross Profit - Calculations2.4.3Net Profit - Calculations2.4.4Rate of Return2.4.5Rate of Return - Calculations2.4.6Research & Financial Data2.4.7Marketing Data2.4.8Percentage Change - Calculations
2.5

Making Human Resource Decisions

2.5.1Organisational Structures2.5.2Organisational Structures 22.5.3Recruitment2.5.4Effective Recruitment2.5.5Training a Workforce2.5.6Motivating a Workforce2.5.7End of Topic Tests - Human Resources2.5.8Application Questions - Human Resources2.5.9Exam-Style Questions - Human Resources2.5.10Diagnostic Misconceptions - Owners vs Shareholders2.5.11Diagnostic Misconceptions - Internal Recruitment2.5.12Diagnostic Misconceptions - Employee Motivation

Practice questions on Legislation & Business 2

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    If a chair breaks on the first use, a customer can claim a refund on the grounds of which consumer law?Multiple choice
  2. 2
    What are 3 ways consumer law protects consumers?Fill in the list
  3. 3
    How might McDonald's be negatively impacted if a law change meant that workers now must have a break of 30 minutes every 3 hours?Multiple choice
  4. 4
    New legislation may lead to:True / false
  5. 5
    If a new legislation results in an increase in the national minimum wage, what will happen to the costs of a business with many minimum wage workers?Multiple choice
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Legislation & Business

The Economy & Business