Week 10 - Consumer Law

Question 1

What is the rationale for legislative protection of consumers?

Answer 1

The whole idea of “buyer beware” doesn’t work as a general rule - “the untrained consumer is no match for the businessman”.

Question 2

What is the meaning of consumer? (According to s3 of the ACL)

Answer 2

Is anyone who acquires:

1. any type of goods or services that cost $40,000 or less OR
2. goods or services costing more than $40,000 if those goods or services are normally acquired for personal, domestic or household use or consumption

But if you are going to use/transform them for trade or commerce, you are not a consumer.

Question 3

What does section 18 of the ACL entail?

Answer 3

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

A person who has suffered a loss because a business contravened s18 can commence legal proceedings and seek one or more of the wide range of remedies offered by the ACL.
Or the business can lodge a formal complain with the ACCC, which can take legal action.

Question 4

The Australian Consumer Law is a part of what act?

Answer 4

The Civil Liability Act 2003 (QLD)

Question 5

Who else relies on s18 of the ACL besides consumers?

Answer 5

Interested members of the public and other businesses, including competitors (e.g. Eveready Australia Pty Ltd v Gillette Australia Pty Ltd)

Question 6

Is the intention of the business to deceive relevant?

Answer 6

No, it doesn’t matter if they meant to or not. If they are misleading or deceptive, then they have contravened s18.

Question 7

What 3 elements must be established before there is a contravention of s18?

Answer 7

1. The business has ‘engaged in conduct’ (making a statement, claim, promise or even silence, if you have a duty to tell)
2. The conduct was ‘in trade or commerce’ and
3. The conduct was ‘misleading or deceptive conduct or likely to mislead or deceive’

Question 8

How do courts decide if conduct is misleading or deceptive?

Answer 8

They use an objective test (Taco Company of Australia Inc v Taco Bell Pty Ltd)

1. It is necessary to identify what section/s of the public (could be the whole public) who will be mislead or deceived by this conduct
2. The matter is considered by reference to all who come within it, including the astute and gullible, the intelligent and dumb, the well/poor educated, men/women of various vocations

Question 9

What are the remedies to misleading or deceptive conduct?

Answer 9

• an injunction requiring the business to stop the conduct that is breaching the law: s232
• damages to those suffering loss or damage as a result of the contravention: s236
• orders requiring the business to establish compliance and education programs for its employees, or disclose specified information: 246

Question 10

What are the two types of unconscionability conduct prohibited by the ACL?

Answer 10

• unconscionable conduct generally: ACL s20, (“a person must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law”) and
• unconscionable conduct when supplying goods or services to, or acquiring goods or services from, a person other than a listed public company: ACL s21.

Question 11

What does s21 of the ACL state?

Answer 11

a person must not, in trade or commerce, in connection with:

(a) the supply of goods or services to a person (other than a publicly listed company) or
(b) the acquisition of goods or services from a person (other than a publicly listed company)

engage in conduct that is unconscionable.

Question 12

What does s22 of the ACL set out? (relates to unconscionable conduct)

Answer 12

Sets out a number of guidelines in relation to unconscionable conduct and the supply of goods or services, including:

• the relative strengths of the bargaining positions of the supplier and the customer
• whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services
• whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer by the supplier or a person acting on behalf of the supplier
• the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier;
• the extent to which the supplier’s conduct towards the customer was consistent with the other customers

Question 13

What are the penalties and remedies for unconscionable conduct?

Answer 13

• financial penalties - ss224

* have the contract, whole or in part, declared void - s243

Question 14

What are consumer guarantees?

Answer 14

The ACL implies into contracts for the sale of goods to consumers guarantees that:

• the goods are of acceptable quality: s 54;
• the goods are fit for any disclosed purpose: s 55;
• the goods correspond with their description: s 56.

The ACL implies into contracts for the supply of services to consumers guarantees that:

• the services will be rendered with due care and skill: s 60;
• the services, and any product resulting from the services, will be fit for any disclosed purpose: s 61.

Question 15

What is s56 of the ACL about? (correspond with description)

Answer 15

Where a person supplies goods by description, there is a consumer guarantee that the goods shall correspond with the description.

S56 also applies where the buyer has actually seen and examined the goods but the goods have been bought as corresponding to a description. e.g. you bought a DVD player because of it’s infra-red remote, but then the DVD doesn’t perform the function. That’s a breach of s56.

This section is about IDENTITY, not quality. Quality is s54.

Question 16

What is s55 of the ACL about? (fitness for disclosed purposes)

Answer 16

There is a guarantee that the goods supplied are reasonably fit for any disclosed purpose.

This guarantee will not apply if:
The consumer did not rely on the supplier’s skill or judgment when buying the goods or
it was unreasonable for the consumer to do so.

Question 17

What is s54 about? (acceptable quality)

Answer 17

There is a guarantee that goods supplied are of acceptable quality.
Goods are of acceptable quality if they are as:
a) fit for all the purposes for which goods of that kind are commonly supplied; and
b) acceptable in appearance and finish; and
c) free from defects; and
d) safe; and
e) durable;
as a reasonable consumer fully acquainted with the state and condition of the goods would regard as acceptable.

The consumer guarantee of acceptable quality does not apply where:

1) the consumer acquiring the goods examines them before the consumer agrees to the supply of the goods and the examination ought reasonably to have revealed that the goods were not of acceptable quality[s54(7)] or
2) the consumer caused the goods to become unacceptable quality [s54(6)].

Question 18

What are s60 and s61 about? (services)

Answer 18

• S60: There is a guarantee that services provided will be rendered with DUE CARE and SKILL
• S61 - Where the consumer makes known to the supplier any particular purpose for which the services are being acquired by the customer, there is a guarantee that the services and any product resulting from the services, will be reasonably fit for that purpose.

Question 19

What are some of the remedies for breach of consumer guarantees?

Answer 19

• asking for a refund
• asking for a replacement
• asking the supplier to repair the goods or for a resupply of the services

Question 20

What is manufacturers’ liability?

Answer 20

The ACL imposes strict liability on manufacturers of defective goods that cause person injury or property damage.

Strict liability means there is no need to prove negligence on the part of the manufacturer.

Question 21

What is s9 about? (manufacturers’ liability)

Answer 21

Goods have a safety defect if their safety is not such as persons generally are entitled to expect, having regard to:

• The way they have been marketed,
• Their packaging,
• Any mark used on the goods,
• Any instructions about using the goods,
• What might reasonably be expected to be done with the goods.

Question 22

If goods have a safety defect, the manufacturer may be liable to compensate:

Answer 22

• the individ. who is injured because of a safety defect (s138);
• anyone other than the injured individ. who suffers loss because of the safety defect (s139);
• anyone who used or intended to use goods damaged or destroyed because of a safety defect (s140);
• anyone who used or intended to use land or buildings damaged or destroyed because of the safety defect (s141).