In a consumer driven society, most Australians will involve themselves in trade and commerce in some form on a daily basis. Some of us might end up purchasing a product that does not meet our expectations, while not being aware of the laws that protect consumers in such an instance. The introduction of the Competition and Consumer Act (the Act) and incorporating the Australian Consumer Law (ACL) provides uniform legislative protections for all Australians, guaranteeing that a person is getting what they paid for, and that the product is of an “acceptable quality” to the consumer.
How are goods considered as “acceptable quality” in the ACL?
In the old Trade Practices Act, goods could be sold if they were of “merchantable quality”. This generally meant that goods bought were reasonable in description and price. The new Chapter 3, Part 3-2, s 54 of the ACL demands that commercial operators have to sell goods that are of an “acceptable quality”.
Goods of an “acceptable quality” are:
• fit for the purposes for which goods of that kind are commonly supplied
• acceptable in appearance and finish
• free from defects
• safe and durable.
The section still requires that goods match its descriptions, but the change from “merchantable quality” to “acceptable quality” may mean that goods that are of merchantable quality might not be considered as acceptable to a consumer, if for instance there is minor blemish in the appearance of a product.(1) However, if the blemish is brought to the consumer’s attention, it may be regarded as a good of “acceptable quality” to the reasonable person if a consumer is aware of the defect, and continues with the transaction.
What happens in the event of a breach of warranty or condition?
In Part 5-4, Division 1, Subdivision A, consumers can pursue an action if a supplier has failed to satisfy their guarantees. The ACL may consider a “failure to comply with a guarantee is a major failure” under s 260 in some of the following instances:
• the goods would not be acquired by a reasonable consumer fully acquainted with the nature and extent of the failure
• the goods did not match a description or a demonstration model
• the goods did not meet the standard that is expected of goods of that nature
• the supplier does not disclose that the goods are unfit
• the goods are unsafe.
Depending on the type of guarantee and nature of the breach, there are numerous remedies that a consumer may seek, although most consumers will seek a refund or the replacement of the goods. Suppliers in s 260 are required to remedy any defects in a reasonable time, and if they fail to do so, legal action can be initiated.
It should be noted that if a person seeks to take legal action against a supplier of the goods, they have indemnity protections by manufacturers of any costs that may be incurred. Furthermore, consumer protections are only available to goods or services less than $40,000, and if the good or service is greater than $40,000, it has to meet the criteria it is a good or service that is ordinarily acquired for personal, domestic, or household use, or consumption.
For anyone who needs advice on consumer issues, please seek the appropriate legal advice.
(1) Jacqueline Downes, ‘The Australian Consumer Protection – Is it really a new era of consumer protection’? (2011) 19 AJCCL 5, 19