Things businesses should know about the Australian Consumer Law
The Australian Consumer Law (ACL) is contained within a Schedule to the Competition and Consumer Act 2010 and is a uniform national law.
The ACL applies to any personal, domestic and household goods/services sold, hired or leased and any goods/services sold, hired or leased up to an amount of $40,000. Accordingly, the ACL and the consumer guarantees described within it, will apply to some business-to-business transactions.
Unfair terms in standard form consumer contracts void
A term of a consumer contract is void and cannot be enforced if it is a standard form contract and the term is unfair.
The ACCC has wide ranging powers to:
• issue substantiation notices requiring a person to produce information and documents supporting its claims or representations;
• issue infringement notices;
• seek pecuniary penalties of up to $1,100,000 for corporations and $220,000 for individuals;
• seek orders disqualifying a person from acting as a director;
• seek orders to redress loss or require refunds to be paid to customers; and
• issue public warnings.
The consumer guarantees under the ACL effectively provide that:
Products must be of acceptable quality, that is:
1. safe, lasting, with no faults
2. look acceptable
3. do all the things someone would normally expect them to do
taking into account what would normally be expected for the type of product and its cost.
1. match descriptions made by the salesperson, on packaging and labels and in promotions or advertising
2. match any demonstration model or sample the consumer asked for
3. be fit for the purpose the business told the consumer it would be used for and for any purpose that the consumer made known to the business before purchasing it
4. come with full title and ownership
5. not carry any hidden debts or extra charges
6. come with undisturbed possession, so no one has a right to take the goods away or prevent the consumer from using them
7. meet any extra promises made about performance, condition and quality, such as life time guarantees and money back offers
8. have spare parts and repair facilities available for a reasonable time after purchase unless the consumer was told otherwise.
1. be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage
2. be fit for the purpose or give the results that you and the business had agreed to
3. be delivered within a reasonable time when there is no agreed end date.
The ACL sets out in detail the remedies that are available to consumers against suppliers and manufacturers if the consumer guarantees are breached.
The remedies against suppliers distinguish between major failures that cannot be remedied and non-major failures. For a major failure, consumers will have an express right to reject the goods and elect a replacement or refund. Consumers also have a right to bring an action in damages for the reasonably foreseeable loss arising from the breach of the consumer guarantee.