1. Statutory guarantees
The Australian Consumer Law ensures goods and services come with guarantees of quality and safety, and provides remedies for consumers when these guarantees are not honoured.
What is a consumer?
The ACL defines a consumer as someone who acquires goods or services “of a kind ordinarily acquired for personal, business or household use or consumption”. If the acquired goods or services are not of that kind, a person may still be considered consumer under the ACL if the value of the goods or services was less than $100,000.
However, a person is not considered a consumer if they, for instance, acquire goods to resupply them, or to transform them during production, manufacturing or repair.
Sale of goods
Goods must be of “acceptable quality”, which means they must be:
- fit for all the purposes for which goods of that kind are commonly supplied;
- acceptable in looks and finish;
- free from defects;
- safe; and
- durable.
Goods must also:
- match all descriptions (for example, in advertising and on packaging);
- come with full ownership and undisturbed possession;
- not carry hidden debts or fees;
- have any extra promises met by the supplier (such as lifetime warranties); and
- have spare parts and repair sites reasonably available (unless a consumer is told otherwise).
Guarantees on products also apply to bundled products and services, sale items, items bought online from Australian businesses, and second-hand products bought from businesses (considering age and condition).
Supply of services
In the supply of services, there is a guarantee that the services will be carried out with due care and skill. There is also a guarantee that the services will be reasonably fit for the purpose expressed by the consumer to the supplier, or the services “will be of such a nature, and quality, state or condition that they might reasonably be expected to achieve” the result expressed by the consumer to the supplier.
Services must also be delivered in reasonable time (if no timeframe has been agreed upon between the parties).
When do consumer guarantees not apply?
Guarantees also do not apply to goods and services if a consumer, for example:
- received what they requested but changed their mind, found it cheaper elsewhere, or had no use for it;
- misused the goods and caused a failure;
- knew of a failure before they bought the goods; or
- requested a service be done in a manner against the advice of the provider.
Guarantees for services do not apply to services including those provided:
- professionally by a qualified architect or engineer;
- under a contract to transport or store goods for the purpose of a business, trade, profession or occupation; or
- under a contract of insurance.
Remedies
If a guarantee is not met, the type of remedy available to a consumer will depend on whether the failure of the good or service is considered to be major or minor. A major failure is when:
- the consumer would not have bought the good or service had they known about the failure (this could be a standalone major failure, or be made up of multiple minor failures);
- the good is significantly different from its description;
- the good or service is not fit for purpose (and cannot be easily made to be fit for purpose within a reasonable timeframe);
- the product or service does not do what you wanted it to when you purchased it or meet your specific purpose (and this cannot easily be fixed within a reasonable timeframe); or
- the use of the good or service is unsafe, or creates an unsafe situation.
If there is a major failure regarding a good, a consumer has the right to, among other things, a replacement or refund. A replacement good must be identical to the original supplied, and a refund should be of the amount paid and in the form it was paid.
If the major failure is regarding a service, the contract may be cancelled, and a refund or compensation sought for the negative difference in the value of the services provided compared to the price paid.
For a minor failure with goods, a business may offer a repair instead of a replacement or refund.
If a person suffers loss or damage due to a breach of a guarantee, the person is entitled to claim compensation. Likewise, a person injured due to a breach of a guarantee, may make a claim for compensation.
2. Safety standards
The Australian Consumer Law contains a range of safety safeguards for consumers. These include:
- the making of mandatory standards for the safety of goods;
- bans on providing goods or product related services that present a safety risk;
- recalls on goods that present a safety risk;
- rights to recourse if goods or services are unsafe; and
- mandatory safety reporting.
There are also protections in State legislation.
The Australian Consumer Law makes it an offence for a person to send a credit or debit card a recipient has not asked for it, unless the card is to renew or replace a card held under an existing agreement.
A person must not assert a right to payment for goods or services that the recipient has not requested, unless there is reasonable cause. This includes sending a bill or invoice for unrequested goods or services. The person seeking payment is responsible for demonstrating that they have reasonable cause.
A person who receives unsolicited goods is not liable to pay for them, or for any loss or damage to the goods (unless the damage was caused by a wilful and unlawful act). If the goods are not claimed by the sender within three months, the sender cannot take action to recover them, and the goods lawfully become the recipient’s property. This period reduces to one month if the recipient has notified the sender that the goods are unsolicited, and given an address for their collection. This entitlement to the property does not apply in situations such as when the recipient knew, or might reasonably be expected to have known, that the goods were not intended for them.
A person who receives unsolicited services is not liable to pay for them, or for any loss or damage associated with them.
4. Unsolicited consumer agreements
An unsolicited consumer agreement is an agreement (made by phone or in person) between a dealer and consumer, to supply goods or services to the consumer, and the consumer did not invite the dealer to phone or meet them at a place to make such an agreement. Further, the total price payable under the agreement must be either unascertainable at the time the contract is made, or be at least $100 (if the price can be ascertained).
The Australian Consumer Law regulates the making of such unsolicited consumer agreements, including by:
- restricting the hours during which a dealer may call on a person to negotiate;
- requiring a dealer to:
- disclose their identity when calling on a person, and the purpose of the call;
- leave a premises immediately if requested by the occupier or prospective consumer, and not contact the prospective consumer to attempt a renegotiation for at least 30 days; and
- provide information about a person’s right to terminate an agreement; and
- making a supplier liable if a dealer contravenes provisions related to an agreement.
If you believe your rights under the Australian Consumer Law have been infringed, Gibbs Wright can help.
Call us for a no-obligation consultation.
