CRA 2015 Flashcards
Section 9
Implied term - goods supplied by the trader must be of satisfactory quality
S9(2) - OBJECTIVE TEST: quality must meet the standard that a reasonable person would consider satisfactory
S9(3) - goods must be satisfactory in:
(A) fit for all purposes
(B) appearance and finish
(C) freedom from minor defects
(D) safety
(E) durability
S9(4) - s9 doesn’t apply when: any defect was brought to the consumer’s attention before the contract (eg an examination before purchase where defect is revealed)
Section 10
Implied term - if a consumer makes known to the trader (expressly or implication) the purpose for which the goods are to be used, then the goods must be fit for that particular purpose.
The term ‘fitness’ requires that a product must absolutely be suitable for a particular role or task and the consumer relies on the trader’s skill and expertise.
S10(4) - this does not apply if the circumstances show that the consumer does not rely/it’s unreasonable for the consumer to rely on the skill or judgment of the trader
Section 11
Implied term - goods should match any description, model, or sample shown at the time of the purchase
S11(2) - applies to goods bought by sample, even if majority of goods match their description but some don’t. The noun ‘bulk’ (or ‘majority’) implies an unspecified number but a significant percentage of the entire order.
S11(5) - if goods change from their description in any way, it can not be enforced on a consumer without consent
Section 20
Short-term right to reject
The consumer has the right to communicate clearly to the trader that they reject the goods, and treat the contract as an end
Section 22 outlines the 30 day time limit to reject
Consumers must return goods and receive a full refund within 14 days in the same way the consumer paid, unless expressly agreed otherwise
Section 19 (14) and (15)
If a fault is discovered within 6 months of purchase, it is presumed to have been there since purchase/delivery, unless the trader can prove otherwise.
This only applies when the consumer exercises their rights to repair/replace/price reduction, NOT if they exercise the right to reject.
If the fault was discovered after 6 months, the burden is on the consumer to prove that the product was faulty at the time of the purchase/delivery. You have 6 years to take a claim to the small claims court.
Section 23
Right to repair or replacement
S23(2)(a) - if the consumer has the right to one repair/replacement of the goods within 6 months, the trader must do so within a reasonable time, without significant inconvenience to the trader
S23(2)(b) - the trader must bear the necessary costs in doing so
S23(3) - the consumer can’t exercise right of repair/replacement if impossible to do so or disproportionate to other remedies
Section 24
Right to price reduction or a final right to reject
Usually applies after the consumer has accepted a repair/replacement (s23), but repair/replacement was unsuccessful or didn’t conform to the contract
Consumer has the right to require trader to reduce the price by an appropriate amount or receive a refund (may be the full amount/price)
Section 28
Delivery
The trader is responsible for the goods until they are in the possession of the consumer. They’re also liable for the service provided by the couriers they employ.
If trader fails to deliver within 30 days, consumer has the right to terminate purchase and receive a full refund (even if timing of the delivery wasn’t essential)
Section 31
Prohibits traders from excluding/limiting their liability for s9, s10 and s11 for the supply of goods. Purported exclusions of liability by traders would be rendered wholly ineffective and inefficient under s31.
Section 49
Implied term - Reasonable care and skill
The standard of care is equivalent to what is expected in a claim of tort negligence.
While ‘reasonable care and skill’ is a relative concept in each case.
Section 50
Information which is said, or written, is binding where the consumer relies on it
Section 51
Where the price is not agreed beforehand, the service must be provided for a reasonable price
Section 52
Implied term - Applies where the contract does not expressly fix a time the service must be performed, or how the time is to be fixed
S52(2) - the trader must perform the service within a reasonable time
S52(3) - ‘reasonable time’ is a question of fact in each case
While ‘reasonable time’ is a relative concept in each case, the adjective ‘reasonable’ insists that the trader must perform the supply of the service within an appropriate time.
Section 55
Right to repeat performance
If exercised and not impossible, the trader must perform the service again, to the extent necessary to complete its performance in conformity with the contract.
S55(2) - the trader:
(A) must do so within a reasonable time and without significant inconvenience to the consumer
(B) must bear any necessary costs incurred in doing so, including labour and material
S55(4) - the question of what is a reasonable amount of time and what is significant inconvenience is decided by:
(A) the nature of the service
(B) the purpose of the service
Section 56
Right to price reduction
Reduces the price by an appropriate amount for the trader’s failure to perform the contract (may be a full refund) - service fell below the requisite standard
Must be received by the consumer within 14 days, and the consumer has 30 days to contact the trader about this price reduction.
Refund must given using the same means of payment as the consumer used when paying for the service.
S56(3) - a consumer who has right to repeat (s55) is only entitled to a price reduction (s56) when:
(A) completion by repeat performance is impossible
(B) trader is in breach of the requirements to do so within a reasonable time, and without significant inconvenience to the consumer
Section 57
Prohibits traders from excluding or limiting their liability for the supply of services for s49. Purported exclusions of liability by traders would be rendered wholly ineffective under s57.
Section 62
Unfair terms are not binding and cause significant imbalance to consumer’s rights.
Key contract terms may be assessed for fairness unless they are prominent and transparent.
S62(3) - doesn’t prevent consumer from relying on term if they choose to do so
Section 65
Bar on the exclusion or restriction of negligence liability
S65(1) - clauses that attempt to exclude/restrict liability for death or personal injury from negligence are invalid
S65(2) - consumer is not to be taken to have voluntarily accepted the risk merely because the person agreed to/knew about the term
CRA 2015
The CRA 2015 was introduced due to imbalance of power between the trader and consumer. It offers robust protection to consumers, ensuring that goods and supply of services meet statutory standards. This is though implying terms into contracts for the supply of goods and services. If any of these terms are breached by the trader, the consumer’s rights to reject the goods/services are enforceable under common law.
‘Goods’ refers to physical and tangible items. The supply of services is a performance by a person of a specific skill operating a business, which involves physically carrying out an act.
CRA 2015 implied terms issues
Balancing conflicting interests - goes against freedom of contract as the consumer possibly gains more power than the trader, imbalance is created. The parties have no input.
Rogers v Parish
S9 - all goods must meet the standard of quality under statutory terms
Grant v Australian Knitting Mills
S9 (3)(a) and s10 - there is no need to state the purpose of which goods are being used for, where goods are being used for their normal purpose
Crowther v Shannon Motor Co
S9 (3)(a) and s10 - the car supplied was not fit for its purpose
Bartlett v Sidney Marcus Ltd
S9 (4) - the seller brought the defect to the attention of the buyer, therefore the buyer could not assert any rights
Baldry v Marshall
S10 - goods must be fit for the purpose as specified
Griffith v Peter Conway
S10 (4) - if the buyer has a specific purpose for the good, they must be clear and say so to the trader. If they do not, there is no breach (as long as the good is fit for its normal purpose)
Re Moore v Landauer
S11 - goods must match their description, as the goods in this case did not, so the buyer was entitled to reject
Beale v Taylor
S11 - the product (car) did not match its description, amounting to breach of s11
Chapelton v Barry Urban District Council
S31 - the exclusion clause was not incorporated into the contract since it was a mere receipt given after the contract had been made
Thake v Maurice
S49 - the service (vasectomy) should have been performed with reasonable care and skill, as the surgeon breached their duty of care and fell below requisite standard when failing to warn about the risk of failure
Wilson v Best Travel
S49 - consumer’s claim was unsuccessful as the danger posed by the glass doors (that caused injury) wouldn’t cause reasonable holiday makers to decline from staying there
Phillips J: ‘The duty of care of a tour operator is likely to extend to checking that local safety regulations are complied with’, meaning they are not liable for the claimant’s injuries as their duty does not extend to checking the safety of the glass doors
CRA 2015 plan
Define - CRA 2015 was introduced due to…
- ‘Goods’ definition
Supply of goods
Implied terms:
S9 - satisfactory quality - Rogers v Parish
- s9(2) - objective test (reasonable person)
- s9(3)(a-e) - goods must be satisfactory in… - Grant v Australian Knitting Mills, Crowther v Shannon Motor Co, Bartlett v Sidney Marcus Ltd
- s9(4) - s9 doesn’t apply defects brought to consumer’s attention before contract formed
S10 - fit for purpose - Baldry v Marshall, Crowther v Shannon Motor Co
- s10(4) - doesn’t apply where consumer doesn’t rely/isn’t reasonable to rely on skill/judgement of trader - Griffith v Peter Conway
S11 - match description - Re Moore v Landauer, Beale v Taylor
- s11(2) - applies to samples
- s11(5) - if goods change from their description, can’t be enforced on consumer without consent
Apply…
Remedies for breach of implied terms (goods):
S20 - short-term right to reject
S22 - 30 day limit to reject
S19(14) and (15) - within 6 months of purchase, presumed to be there since purchase/delivery (only for repair/replace/price reduction, not reject)
S23 - right to repair or replacement
- s23(2)(a) - do so in reasonable time within the 6 months, without significant inconvenience to consumer
- s23(2)(b) - trader must bear necessary costs
- s23(3) - repair/replacement can’t be exercised if impossible or disproportionate to other remedies
S24 - right to price reduction or final right to reject
S28 (delivery) - trader is responsible until in possession of consumer and if not delivered within 30 days, consumer can terminate purchase and full refund
S31 - prohibits traders from relying on exclusion clauses - Chapleton v Barry Urban District Council
Apply…
Supply of services
Implied terms:
S49 - reasonable care and skill - Thake v Maurice, Wilson v Best Travel (Phillips J)
S52 - where contract doesn’t expressly fix a performance time for service
- s52(2) - within reasonable time
- s52(3) - what a ‘reasonable time’ is depends on the case
Apply…
S50 - info written/said is binding where consumer relies on it
S51 - reasonable price (where it hasn’t already been stated)
Apply…
Remedies for breach of implied terms (services):
S55 - right to repeat performance
- s55(2) - the trader:
- s55(2)(a) - reasonable time without significant inconvenience
- s55(2)(b) - must bear necessary costs, including labour and material
- s55(4) - ‘reasonable time’ and ‘significant inconvenience’ is decided by:
- s55(4)(a) - nature of the service
- s55(4)(b) - purpose of the service
S56 - right to price reduction
- s56(3) - consumer who has right to repeat (s55) can only get price reduction when:
- s56(3)(a) - completion by repeat performance is impossible
- s56(3)(b) - trader is in breach of requirements to repeat within a reasonable time and without significant inconvenience
S57 - prohibits traders from excluding/ limiting their liability
S62 - unfair terms are not binding to consumer
- s62(3) - doesn’t prevent consumer from choosing to rely on it
S65 - bar on exclusion or restriction of negligence liability
- s65(1) - clauses that exclude/restrict liability for death or personal injury are invalid
- s65(2) - consumer not expected to voluntarily accepted risk merely because of knowledge about it
Apply…
CRA 2015 implied terms issues
- Balancing conflicting interests - goes against freedom of contract as consumer possibly gains more power than trader (imbalance)
- Parties have no input
Conclusion - If there is a breach of any implied terms, consumer can exercise rights to reject/repair/replace/price reduction for goods, and repeat performance/price reduction for services.
Implied terms in CRA 2015
Supply of goods - s9,10, 11
Supple of services - s49, 52
