Australian Consumer Law

The Australian Consumer Law is the main law that protects the rights and interests of consumers and provides remedies for consumers in case of breach of the Australian Consumer Law.
The text of the Australian Consumer law consists of : * Chapter 1 — Introduction: a single set of definitions and interpretive provisions about consumer law concepts. * Chapter 2 — General protections: general protections, which create standards of business conduct in the market. Specifically, Chapter 2 includes: - a general ban on misleading and deceptive conduct in trade or commerce; -a general ban on unconscionable conduct in trade or commerce and specific bans on unconscionable conduct in consumer and some business transactions; and - a provision that makes unfair contract terms in consumer contracts void. * Chapter 3 — Specific protections: specific protections which address identified forms of business conduct. Specifically, Chapter 3 includes provisions: 0 - banning specific unfair practices in trade or commerce; 1 - dealing with consumer transactions for goods or services; - on the safety of consumer goods and product related services; - on the making and enforcement of information standards; and - on the liability of manufacturers for goods with safety defects. * Chapter 4 — Offences: criminal offences relating to certain matters covered in Chapter 3. * Chapter 5 — Enforcement and remedies: national enforcement powers and remedies relating to consumer law.

The main function of the Australian Consumer Law is to protect consumers against: * Unfair practices of traders * Unconscionable conduct of traders * Misleading or deceptive conduct * Specific false representations * Unfair practices ( Gibson, Fraser, 2011)

It also provides safety and information standarts, establishes liabilities of manufactures and products. The law is continuously developing in order to protect customers against unfair practices of manufactures. In the past the remedies for dissatisfied customers were stated only in the common law, which was unable to provide sufficient protection. However, on 1 January, 2011 The Australian Consumer Law commenced , which was a big movement towards the provision of adequate protection of customers. It is elaborate law and it is applicable nationally, in all states and territories and also to Australian businesses. The Australia Consumer Law now includes: * a new, national unfair contract terms law covering standard form contracts; * a new, national law guaranteeing consumer rights when buying goods and services, which replaces existing laws on conditions and warranties; * a new, national product safety law and enforcement system; * a new, national law for unsolicited consumer agreements, which replaces existing State and Territory laws on door-to-door sales and other direct marketing; * simple national rules for lay-by agreements; and new penalties, enforcement powers and consumer redress options, which currently apply nationally.
(www.consumerlaw.gov.au)

A contract is an agreement which is made between two or more parties and it must be enforced legally. A contruct is concluded when an offer is made by one party to another one and the other party accepts it. There is no particular definition for a ‘standard form contract’, however, standard form contract is usually made by one party and is not the subject of discussion between two parties. They are normally used for supply of goods and services to consumers in various industries. The contract is considered to be unfair if its terms are treated as if they have never existed. Under the Competition and Consumer Act(2010), a ‘consumer contract’ is a contract for: > the supply of goods or services or
> the sale or grant of an interest in land to an individual who acquires it wholly or predominantly for personal, domestic or household use or consumption. Under Sch 2, s. 24(1) of the Act and s. 12BG of the ASIC Act, states that a term of a consumer contract is unfair if it: > would cause a significant imbalance in the parties’ rights and obligations arising under the contract and > is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term and > would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on. All three limbs of the unfairness test must be proven, on the balance of probabilities, to exist for a court to decide that a term is unfair. The unfair contract terms laws for consumer goods and services are enforced by both Commonwealth and state and territory consumer protection agencies. The courts determine whether the term of a contract is unfair and make decisions about the redress of loss or damage suffered by consumers. Sometimes tribunals can perform the same functions. In division 1 of Part 3-2 of the Australian Consumer Law can be found the rights of the consumer to guarantees, which are provided by manufactures and supplies about their goods and services. All goods must be of an acceptable quality which means that they are fit for a particular purpose for which they are supposed to be used, their appearance is good, they are without any defects and also safe and durable. The suppliers must fix the problems in goods if they do not meet a consumer guarantee even in case when there is no extended warranty or if the warranty has expired. Suppliers are also responsible for all promises made to consumers. “Express warranties” are often given by suppliers or manufactures, which means that they make additional promises about quality, characteristics, state and condition of their goods. For example, a supplier may tell the customer that the chair will last for 5 years, and that will mean that he/she guarantees that this good will satisfy this warranty. If this chair fails to meet consumers guarantee, then the consumer will have the right for a remedy. There exists another warranty which is called “warranty against defects”, which means that suppliers and manufactures guarantee that any defects in the product they provide will not appear during a particular period of time, otherwise they will be responsible for either its repair or replacement. A warranty against defects must be done in a written form. Also consumers can get any compensation, which will cover their loss. The explanation and codification of a more exact guarantee of “acceptable quality” as well as the provision of remedies for consumers are two of the most important changes that were introduced into the Australian Consumer Law and they make consumers guarantees more clear. As it was mentioned before, the Australian Law is moving to over protect consumers but until 1974 it was very difficult for a consumer to have remedy against anyone but the immediate supplier of defective goods. There was no remedy available to the consumer against third parties under contract law because no contractual relationship existed between them and the consumer (Gibson, Fraser, 2011). However, nowadays if consumer suffered any damage because of defective goods, the manufactures are strictly liable. If the manufacturer or the supplier fails to fulfill the guarantees as laid in the law then there can be civil penalties to the tune of $50,000 for the company and $10,000 in case of individual (Clark, 2011). The consumer may elect to sue either their immediate supplier or the manufacturer directly (Gibson, Fraser, 2011). The remedies which consumers can be provided by law can be found in Part 4-5 of the Australian Consumer Law where the remedy is dependent on the gravity of a breach. The manufacturer of defective goods that cause personal injury or damage may be liable to compensate an individual who is injured (section 138), an injured third party, such as bystander (section 139), a person for damage to personal, domestic or household goods( section 140) and a person for damage to land, buildings or fixtures( section 141) (Gibson, Fraser, 2011). There is a section 18 in the Australian Consumer Law, which prohibits conduct by a corporation that is misleading or deceptive. The law can be broken if the company affects consumers thoughts and prevents him/her from making reasonable decisions by providing untruthful information about the price, quality or value of goods and services in advertisement, statement, quotation, representation or promotion of the company. In this case the conduct of the business will be considered misleading and deceptive even if it was unintentional. For example, if a real estate agent wants to sell the property and tells the potential customer that his/her flat will be overlooking the park with a school nearby but in reality there is neither park, nor school. Consumer who suffered loss because of breach of section 18 can bring a civil action. Section 18 is a catch-all provision and does not require the conduct be deliberate, so there are no criminal penalties (Gibson, Fraser, 2011). There is also a number of other 'unfair practices ' that are prohibited by the Australian Consumer Law such as offering gifts or prizes (section 32), misleading conduct as to the nature or manufacturing process of goods (section 33), misleading conduct regarding services (section 34), bait advertising (section 35), referral selling (section 49), accepting payment without intending to supply (section 36), coercion or harassment at place of residence (section 50), pyramid selling (sections 44-46), unsolicited credit cards (section 39), unsolicited goods and services (sections 40-41). These sections carry criminal penalties and civil remedies, therefore it must be established that the conduct was deliberate. The Australian Consumer Law introduces a national law on product safety. All goods have prescribed standard and it is prohibited to supply goods if they do not comply with this standard. The standards of product safety are related to such things as products performance, design, contents, its testing during and after manufacture process and also to the presence of necessary warnings and instructions, which help consumers to avoid risk of being injured. In the sections 195-204 offences related to supply of products that do not comply with a prescribed standard. Fines may be up to $1,1 million for a corporation and $220,000 for an individual, or civil pecuniary penalties up to similiar maximums. The Australian Consumer Law is improving and a number of changes were made related to the rights and remedies of consumers in order to provide them better protection. One of the reasons for the extension of consumer protection provisions is probably the aim to motivate companies to act fairly in their business. !!!? But for this law to work it is also necessary that consumers are aware of their rights and that will prevent them from being misleaded by suppliers.

References

Australian Consumer Law, Commonwealth of Australia, 2010, viewed on 23d August, 2012. http://www.consumerlaw.gov.au/content/Content.aspx?doc=the_acl.htm Clarke J. 2011, Australian contract and Consumer Law, viewed on 23d August, 2012. http://www.australiancontractlaw.com Gibson A., Fraser D., Business Law, Pearson Australia, 2011, pp. 549-633.

References: Australian Consumer Law, Commonwealth of Australia, 2010, viewed on 23d August, 2012. http://www.consumerlaw.gov.au/content/Content.aspx?doc=the_acl.htm Clarke J. 2011, Australian contract and Consumer Law, viewed on 23d August, 2012. http://www.australiancontractlaw.com Gibson A., Fraser D., Business Law, Pearson Australia, 2011, pp. 549-633.