Consumer

ACL S3, A consumer is when goods is :

1. <$40,000
2. >$40,000 but for personal or domestic usage.
3. Goods must not be used up or transformed in trade or
commerce.

Misrepresent
ation

Definition: Misrepresentation is a false statement of fact made

by one party to another to enter into a contract.
Was there a misrepresentation?
To establish an action of misrepresentation, a party must prove
that the representation is:
1) Is one of past or existing fact, not an opinion.
2) Is false
3) Was made to the party misled before or when the
contract was made, and
Was intended to induce and has indeed induced the party into
contract.
> Liability cannot be avoided by use of a disclaimer as
established in ACCC v Telstra Corporation GP (2007) 244
ALR 470
ACL
Needs 3 requirements:
s18
1. Business has engaged in conduct. Includes
acts, statements, promises, failure to do or say
something.
Slience is considered. (Henjo Investments V Collins
Marrickvile.)[Slience about restaurant limit]
2. The conduct was in trade or commerce
Must be in commercial context. Does not cover
political or academic statements.
Concrete Constructions (NSW) Pty Ltd v Nelson
(1990) where the advise from the foreman in
concrete constructions was not a conduct
engaged in trade or commerce
- Durant v Greiner (1990) where Greiners
statement was not made in trade or commerce

Prohibiting
Misleading
and
deceptive
conduct.
(General
Prohibitions)
Not limited
to consumer.
Can be
interested
members of
public and
other
businesses,
including
competitors.

3.Misleading and deceptive conduct

to lead astray or to lead into error, and deceive is
interpreted as to cause to believe what is false.
Supported by
- Taco company of Australia Inc V Taco Bell Pty
Ltd (1923) 42 ALR 177 where TCA was
engaging in misleading or deceptive conduct of
brand as TB started first.
- ACCC v Powerballwin.com.au PTY LTD (2010)
FCA 378, having false advertising to mislead
consumers.
- Henderson V Pioneer Homes Pty Ltd (no 2)
(1980) 29 ALR 597 (Had a low weekly
repayment rate in a large print but have a fine
print saying it last only 1 year. Misleading)
However, Exaggeration is a form of misleading or
deceptive conduct as supported by Given V Pryor

Unconsciona
ble conduct
Taking
advantage
of another
persons
special
weakness or
disadvantag
e

S20 :
Gener
al

Consequenc
es

Unconsciona
ble conduct
Goods and
services

S21

(1980) 30 ALR 189.

Was [name]s considered unconscionable conduct?
S 20 of ACL adopts the common law notion of
unconscionability, as established in Commercial
bank of Australia v Amadio (1983)
Thus, a person may be liable for unconscionable
conduct under s 20, where they take advantage of
another persons weakness.

No criminal penalties
ACCC may issue notices and warnings
Consumers or persons harmed may take legal action
or seek remedies, including :
Pecuniary Penalties : SS 224-231 (monetary)
Injunction SS 232-235
Damages S236
Compensation Order for injured persons S237-241
Declaration that contract is void, order to refund ,
repair and compensate, etc
S 21 of ACL further explains unconscionable conduct
with regards to supply or acquisition of goods and
services.
A party will have contravened s 21 of ACL if:
1) The business has engaged conduct
2) The conduct was in trade or commerce
3) The conduct was in connection with the supply
to, or acquisition of goods or services to, from
another person.
4) The other person was not a listed public
company
5) The conduct was unconscionable
S22 also has a list of similar matters that the court
may consider in deciding whether or not a business
has contravened ACL s 21 when AQUIRING goods or
services from a supplier.

ADDRESS
Unfair
contract
terms

S23

List of matters court can consider under S22(1)

To satisfy ACL s 23,
1) The contract is a consumer contract, defined in
S23(2)
2) The contract is a standard form contract
3) The term is unfair under S24(1)
- It cause a significant imbalance in the parties
rights and obligations arising under the
contract, (cos not negotiable.)
- It is not reasonably necessary to protect the
legitimate interest of the business
- It would cause detriment to the consumer. this
includes all forms of detriments not only

monetary
Supported by Director of consumer affairs Victoria V
AAPT Limited (2006) VCAT 1493 where the terms
permitted AAPT to immediately terminate the contract
is an unfair term.
Unfair Terms
Exemptions
ACL

S26

Misc. unfair
practices

S29 making false or misleading representations about goods

or services It must not make a false or misleading statement:
That the goods are of certain standard, quality, value, grade
composition style or model.
(Case: Hartnell V sharp Corporation of Australia Pty Ltd, a
number of advertisement sharp falsely claim is approved by
standard association of Australia, which was a false
representation of good of particular standard and were fined
$100,000.)

ACL 3-1

EXEMPTIONS
ACL s26 states that the unfair contract terms
provisions do not apply to
- Terms that define the main subject matter of
the consumer contact
- Terms that set the upfront price payable
under contract law
- Terms that are required or expressly permitted
by the law of the commonwealth or state
or a territory.

S30 - making false or misleading representations about sale of

land
S31 engaging in misleading conduct in relation to
employment
S32 - offering a rebate, gift, prize or other free item without
intending to provide it, or without intending to provide it within
reasonable time
S33 engaging in misleading conduct regarding the nature,
manufacturing process, characteristics, suitability for purpose
or quantity of any goods
S34 - engaging in misleading conduct regarding the nature,
manufacturing process, characteristics, suitability for purpose
or quantity of any Services
- Eg. For trip brochure still states 13 days trip even after
the trip is changed to a 11 days trip
Unsolicited
product
product sent
to buyer
without the
buyer
having

S35 engaging in bait advertising

Eg know that u will run out of stock soon, u still lure
customers into ur shop so that when run out, u can ask them
to buy another model

requested it
(S35 to S39)

S36 wrongly accepting payment when unable to supply the

product
S37 making false or misleading representations about the
profitability or risk of a home business
S39 - sending unsolicited debit or credit cards
S40 asserting a right to payment for unsolicited goods or
services
S43 asserting a right to payment for unauthorized entries or
advertisements
S44 participation or inducing someone to participate in a
pyramid scheme
S47 supplying goods or services with more than one
displayed price and not charging the lower price
S48 failure to specify a single price (eg, price including all
charges, fees, taxes, levies, etc) for goods or servies supplied
for personal domestic or household use or consumption
S49 offering a contingent rebate, commission or other benefit
in return for a referral
S50 using physical force, harassment or coercion in relation
to the supply of or payment for goods, services, or land

Consumer
guarantees
FOR GOODS
(PART 1)
ACL 3-2

When the contract relates to the supply of GOODS to a

consumer, the guarantees includes
S51 - A guarantee that the seller has title that is, the business
has the right to pass on to the consumer ownership of the
goods
S52 A guarantee that the consumer will have undisturbed
possession - that is, the consumers subsequent possession of
the goods will not be interrupted by the business or some other
person seekin g to recover the goods
S53 - a guarantee that there are no undisclosed securities
there is no security, charge or encumbrance that has not been
disclosed to the consumer

Consumer
guarantees
FOR GOODS
(IMPORTANT
)

S54 a guarantee that the goods supplied to a

consumer are of acceptable quality
- Acceptable quality means
a) Fit for all purposes that for which the goods of that
kind are commonly supplied. (milk must be fit for
drinking)
b) Acceptable in appearance and finish
c) Free from defects

d) Safe, AND durable

As a reasonable consumer fully acquainted with the state and
conditions of the goods would regard as acceptable having
regard to the following matters :
- The nature of the goods
- The price of the goods
- Any statements about the goods
-

Remedies for non-compliance with the guarantees

depend on whether the failure to comply with the
consumer guarantee was a major failure as defined in
S260
Not major failure, can remedy failure or recover all
reasonable remedy cost or reject goods (S259)
Recover damages from Goods for non-compliance with
S54 guarantees as to acceptable quality (S271)
S55 a guarantee that goods are reasonably fit for any
disclosed purpose and for any purpose for which the
SUPPLIER GUARANTEES THAT THEY ARE REASONABLY
FIT
-

Disclosed purpose particular purpose for which goods

are being acquired by the consumer, and the
consumer makes known to the supplier or
manufacturer. RELIED ON RECCOMENDATION.

S55 does not apply where the consumer did not rely or
that it was unreasonable for the on the skill and
judgment of manufacturer or supplier.

Remedies for non-compliance with the guarantees

depend on whether the failure to comply with the
consumer guarantee was a major failure as defined in
S260
Not major failure, can remedy failure or recover all
reasonable remedy cost or reject goods (S259)
Recover damages from Goods for non-compliance with
S55 guarantees as to acceptable quality (S271)

Consumer
guarantees
FOR GOODS
(Part 2)

S56 guarantees that the goods correspond to their

description
S57 - guarantee that in a sale by sample, the good correspond
with the sample in quality, state and condition

S58 states that a guarantee by manufacturer is to ensure

repair facilities and spare parts for reasonable period after
supply of goods.
S59 - guarantee that manufacturer and supplier will comply
with any express warranties they have given
Consumer
guarantees
FOR
SERVICES

S 60 guarantee that services supplied to a consumer will be

rendered with due care and skill
S 61 guarantee that any services and product resulting from
the services will be fit for a purpose that the consumer made
known to the supplier
S62 guarantee that services will be supplied within a
reasonable time
(if there is no time stated in contract or previously agreed
upon)
S64 any terms of the contract that seek to exclude, restrict
or modify the guarantees is automatically void this should be
for both goods and services.
Basically Exclusion or limitation clause in favour of supplier is
voided.

Manufacture
rs liability

Exclusion or limitation clause in favour of manufacturer is void

under S276
Part 3-5 ACL impose range of obligations & liabilities on
manufacturers. This will cover where they have a liability under
the law of negligence e.g duty of care to neighbours
The term manufacturer includes any person who
a) Grows, extracts, produces, processes, or assembles
goods,
b) Holds himself out to public as the manufacturer of the
goods
c) Applies their name or trademark to goods supplied by
them
d) Permits another person to hold them out to public as
manufacturer of the goods
e) Imports goods into Australia if the actual manufacturer
of the good does not have a place of business in
Australia
If the manufacturer supplies defective goods in trade or
commerce, and the goods have a safety defect and the
individual suffers injuries because of the safety defect, the
manufacturer must compensate the individual ACL s138. The
consumer need not prove negligence or fault.
A consumer guarantee relating to the supply of goods has not
been complied with, the consumer has (in addition to any
rights against the supplier) the right to recover compensation
from the manufacturer. S271

 affected person may recover damages from manufacturer if

goods not of acceptable quality: s 271(1) ); orwhere goods
dont match description: s 271(4)
Damages against a manufacturer for breach of these
guarantees cover:(a) any reduction in the value of the goods(b)
any loss or damage that was reasonably foreseeable for breach
of the guarantee: s 272
Affected person is: a consumer person who acquires goods
from the consumer person who derives title to the goods
through the consumer: s 2(1)
Exclusions/modifications to statutory remedies are VOID: s 276
Manufacturer liable to indemnify supplier: s 274
Action
Against
manufacture
r
Against noncompliance

S271 If Consumer guarantee relating to supply of goods has

not been complied with, the consumer has the right to recover
compensation from the manufacturer. S271.
The manufacturer is not liable if the guarantee was not
complied with only because of a cause independent of human
control that occurred after the goods left the control of the
manufacturer.
affected person may recover damages from manufacturer if
goods not of acceptable quality: s 271(1) ); orwhere goods
dont match description: s 271(4)
Damages against a manufacturer for breach of these
guarantees cover:(a) any reduction in the value of the goods(b)
any loss or damage that was reasonably foreseeable for breach
of the guarantee: s 272
Affected person is: a consumer person who acquires goods
from the consumer person who derives title to the goods
through the consumer: s 2(1)
Exclusions/modifications to statutory remedies are VOID: s 276
Manufacturer liable to indemnify supplier: s 274

Manufacture
rs Liability
for Goods
with Safety
Defects

Manufacturer liable:
to compensate an individual if goods supplied by it have
a safety defect and the individual suffers injuries
because of the defect: s 138
to dependents of individual for loss as a result of injuries
to or death of individual caused by a safety defect: s
139
for loss of other goods ordinarily acquired for personal,
domestic or household use (s 140) or loss of land,
buildings or fixtures acquired for private use caused by
the defective goods ( s 141)
Goods have a safety defect if their safety is not such
as persons generally are entitled to expect having
regard to manner in which marketed, packaging,
instructions, warnings, etc: s 9(1)
Any exclusion of liability is VOID: s 150

Country of
origin

S225 ACL representation of country of origin.

Goods must be substantially transformed in Australia and more
than 50 % of the cost of production was incurred in Australia to
be able to say that the goods are Australian made.

Safety of
consumer
goods

Product safety Standards as to :

Performance, composition, contents, manufacture finish
of goods
Testing of the goods
Form and content of marking, warnings
Must provide goods that comply with relevant product safety
standards.
Bans
if concern about safety or that the goods could cause
injury then can place interim ban which last for 60days
and can be extended. Can also impose permanent ban.
Recalls
- if breach of above two then goods can be subject to a
recall
- business must recall the goods
- notify the public of the defect.
- Tell the public what the business is going to do.
- Repair , replace or provide a refund for the goods.
Safety warning notices
- Publish on the internet a notice that the goods are under
investigation.
- If business is aware that harm has be suffered through
the use of the goods then must inform the minister.

Consumer
Guarantees

Action against supplier of goods and services

Not major failure:
Non-compliance is not a major failure, the consumer can
require the business to remedy the failure with a reasonable
time ACL 259(2).
The business can remedy the non-compliance by :
Curing the defect in title (if any),
Repairing the goods,
Replacing the goods, or
Providing a refund: ACL s261.
Major failure:
The consumer can reject the goods (that is, return he goods for
a refund or replacement or require the business to pay to the
consumer the difference between the value of the goods and
the price paid for them: ACL S259(3)
Failure to comply with a guarantee is major failure if :
The goods are not of acceptable quality because they are
unsafe: ACL S260.
The consumer loses the right to reject the goods after return
the goods for refund or replacement if
The rejection period for good has ended the goods has been
lost destroyed or disposed of by consumer or the goods were
damaged after being delivered to consumer for reasons not
related to their state or condition at the time of supply.
The goods have been attached to any real property and they
cannot be detached or isoleated without damaging them: ACL
S262.
If consumer acquires goods from a supplier and gives them to
another person as a gift, the other person can exercise any
rights or remedies with would be available if they acquired the
goods from the supplier: ACL S266.
Similar Provisions apply to an action against a supplier of
services: ACL SS267-270

Consumer
Guarantee
summary

If not major Failure S259(2)

- consumer may require supplier to remedy the failure within a
reasonable time; if supplier does not remedy the failure,
consumer may reject the goods or recover all reasonable costs
in remedying the failure: s259(2)
If major failure occurs,
- consumer may reject goods or recover compensation for any
reduction in value of goods below the price paid: s 259(3))
In either case, consumer may recover damages for any
reasonably foreseeable loss or damage caused by noncompliance: s 259(4)
Similar remedies apply for breach of services
guarantees: s 267
Exclusions of statutory remedies are void: s64
Major failure: s 260 for goods and s 268 for services
A major failure occurs where goods/services:

would not have been acquired by a reasonable consumer

who was fully acquainted with the nature and extent of
the failure
-

Consequenc
es and
remedies

are substantially unfit for a purpose for which

goods/services of the same kind are commonly supplied
and they cannot be easily and within a reasonable time
be remedied to make them fit for such a purpose
are unfit for a disclosed purpose
are not of acceptable quality because they are unsafe

Consumers harmed may take legal action and seek legal

remedies including :
1) Pecuniary penalties ss224-231
2) Injunction - ss232-235
3) Damages s236
4) Compensation order for injured persons ss237-241
Declaration that the contract is void, order to refund, repair or
compensate.
Remedies can be granted by a court for contravention of the
ACL include:
- Non-punitive orders including orders directing the
defendant to perform a community service, directing
them to establish compliance and education programs
for their employees, requiring them to disclose
information or requiring them to place an
advertisement.
- An adverse publicity order and
- An order disqualifying a person from managing a
corporation.
If not a major failure
- consumer may require supplier to remedy the failure within a
reasonable time; if supplier does not remedy the failure,
consumer may reject the goods or recover all reasonable costs
in remedying the failure: s 259(2)
if a major failure occurs:- consumer may reject goods or
recovacer compensation for any
reduction in value of goods below the price paid: s 259(3))
In either case, consumer may recover damages for any
reasonably foreseeable loss or damage caused by noncompliance: s 259(4)

Offences
and
penalties

ACL S151: Making false or misleading representations about

goods or services
ACL S152: Making false or misleading representations about
the sales of land
ACL S153 : Engaging in misleading conduct in relation to
employment.
ACL 154 : Offering rebates, gifts , prizes or other free items
without intending to supply.

ACL S155: Engaging in misleading conduct as to the nature of

goods.
ACL S156: Engaging in misleading conduct as to the nature of
services.
ACL S157 : Engaging in Bait Advertising.
ACl S158 : Wrongly accepting payment without intending to
supply or without intending to supply within a reasonable time.
ACL S 159 : Making misleading representations about the
business activities that can be carried on from home.

DEFENCES

ACL Part 4-1 sets out the defences available to a business

accused of contravening these prohibitions and committing
these offences.
A business will not be liable if :
The contravention was caused by a reasonable mistake of fact,
including a mistake of fact caused by reaonsable reliance by
the business on information supplied by another person. : ACL
207.
The contravention was due to the act of default of another
person, to an accident or to some other cause beyond the
control of the business and the business took reasonable
precautions and exercised due to diligence to avoid the
contravention ACL 208.
In relation to contravention commited by the publication of an
advertisement, it is a defence if the business can establish that
its business is to publish advertisements and that it received
the advertisement for publications in the ordinary course of
business and did not know and had no reason to suspect that
its publication would amount to a contravention ACL 209

Enforcement
and
remedies

Enforcement
Enforceable undertakings
If a business suspects that it might have contravened the ACL,
the business can offer the ACCC an undertaking that it will not
do it again and take steps to improve compliance. If it is
accepted by the ACCC the undertaking is court-enforceable.
ACL SS218
Substantiation notices
The ACCC can issue a substantiation notice to a business
seeking information about claims made by the business in the
marketplace to determine if they are genuine and whether
further investigation is necessary. ACL ss219-22
Public Warning Notices
The ACCC can issue a public warning notice about a business
where the regulator has reasonable grounds to suspect that
the business has contravened the aacl, or has refused or failed
to respond to a substantiation notice ACL 223
Legal Action
A consumer or any other person harmed as a result of a
contravention of the ACL by the business can commence a
legal action against the business seeking one or more of the
remedies below. An action can also be brought by the ACCC.
General Remedies
ACL part 5-2 sets out the remedies that can be granted by a
court for contravention of the ACL. These remedies include:
- Various pecuniary (that is, monetary) penalties: ACL ss
224-31,
- Various types of injunction ACL ss 232-5;
- An order that the business pay damages to any person
who has suffered loss because of the contravention ACL

S236.
A compensation order for injured persons ( on
application by either the injured person or the ACCC) or
non-party consumers ( on application by the ACCC). ACL
SS 237-41
An order declaring a contract void, varying a contract,
refusing to enforce a contract, ordering a refund,
ordering compensation, ordering repair of the goods,
ordering the provision of services or ordering execution
of an instrument relating to land. ACL S243
Various non- punitive orders including an order directing
the business to perform a community service, an order
directing the business to establish compliance and
education programs for its employees, an order
requiring the business to disclose information, and an
order requiring the business to place an advertisement:
ACL S246.
An adverse publicity Order ACL S247 and
An order disqualifying a person from managing a
corporation ACL S248.