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  • 1. Competition & Consumer Law in Australia Small Businesses------------------------------------------
    Peter McLaughlin
    Director
    redchip Lawyers
  • 2. Overview:
    • Introduction to the Australian Consumer Law
    • 3. Consumer Protection:
    • 4. Consumer Guarantees
    • 5. Lay-by agreements
    • 6. Unfair contract terms
    • 7. Avoiding Unfair Business Practices
    • 8. Misleading or Deceptive Conduct
    • 9. False or Misleading Representations
    • 10. Unconscionable Conduct
    • 11. Representations About Country of Origin
    • 12. Information Standards
  • Introduction to the Australian Consumer Law
    • Replaces previous Federal and State legislation to create uniform law – standard terms and definitions
    • 13. Introduces new law on unfair contracts
    • 14. New national consumer guarantee provisions
    • 15. New national lay-by provisions
    • 16. Structure of the ACL
    • 17. The Act renamed the Trade Practices Act (Cth) 1974 as the Competition and Consumer Act 2010 (Cth)(CCA).
    • 18. Uniformity under the ACL across Australia:
    • 19. Consumers have the same protections
    • 20. Businesses have the same responsibilities and obligations
  • Consumer Guarantees
    • Previously implied warranties had to be enforced as breach of contract – now a breach of the ACL
    • 21. Guarantees now automatically provided regardless of any warranty
    • 22. Suppliersguarantee goods:
    • 23. Manufactures guarantee goods:
    • 24. Express warranties
    • 25. Spare parts and repair facilities
    • 26. Service providers guarantee services
  • Which goods are covered?
    • All goods purchased for less than $40,000
    • 27. If goods cost more than $40,000 but are used for household or domestic purposes
    • 28. Vehicles and trailers
    • 29. Applies to second hand and ‘seconds’
  • What goods are not covered?
    • Bought before 1 January 2011
    • 30. One off sales (garage sales)
    • 31. Auction sales (where the auctioneer is agent for supplier)
    • 32. Business purchases costing more than $40k
    • 33. Goods you buy to on-sell
  • What are the guarantees?
    • The goods will be of an acceptable quality
    • 34. The goods will be fit for their purpose
    • 35. The description of the goods in any catalogue is accurate
    • 36. The goods will match any sample or demonstration model
    • 37. Suppliers and manufacturers will honour any express warranties
    • 38. The goods will have clear title and be free of hidden securities
    • 39. Manufacturers or importers will provide spare parts and repair facilities.
  • What if the product fails?
    • If a product fails to meet a consumer guarantee, consumer may be entitled to a replacement, repair, refund or other remedy
    • 40. But not if consumer changes their mind, damages the goods or were told about any defects before purchase
    • 41. Remedy depends on whether major or minor issue
  • Minor problems
    • Problems that can normally be fixed or resolved (eg repairing stitching on clothing)
    • 42. Supplier can choose refund, repair or replacement
    • 43. Supplier must have a chance to fix the problem
  • Major problems
    • If there is a major failure with the goods, the consumer can:
    • 44. reject the goods and get a refund
    • 45. reject the goods and get replacement, or one of similar value if reasonably available, or
    • 46. keep the goods and get compensation for the drop in value caused by the problem
  • Major problems
    • Major problem with a product when:
    • 47. you would not have purchased the product if you had known about the problem.
    • 48. the product is significantly different from the description, sample or demonstration model you were shown.
    • 49. the product is substantially unfit for its normal purpose or for the purpose told to supplier (eg ski jacket is not waterproof)
    • 50. the product is unsafe (eg electric blanket with faulty wiring)
  • Returning/rejecting goods
    • Only applies if major problem
    • 51. Must reject within a reasonable time
    • 52. Consumer must return unless cost is significant – if so supplier must collect
    • 53. Consumer must show proof of purchase
    • 54. Original packaging not required
  • Guarantees for services
    • Services costing less than $40,000
    • 55. Services costing more than $40,000 but used for household or domestic purposes
    • 56. A supplier must supply services;
    with due care and skill
    which are fit for their purpose
    within a reasonable time
  • 57. Services - dealing with problems
    • Minor - supplier can choose to refund or repair (free of charge and in reasonable time)
    • 58. Major – consumer can cancel the services and get refund or seek compensation for difference in value
  • Business transactions
    • Suppliers can limit liability where not for household or domestic purposes to:
    - replacing or repairing
    - reimbursing for replacement or repair
    - re-supplying services
    - reimbursing for re-supply
  • 59. Lay-By agreements
    • A 'lay-by' is essentially a contract where you pay for a product over a period of time rather than upfront.
    • 60. A lay-by agreement must be in writing and specify all the terms and conditions, including any termination charge. 
    • 61. The trader may charge a termination fee (if a lay-by agreement cancelled) of not more the trader’s ‘reasonable costs’ relating to the agreement.
    • 62. If cancelled all amounts paid must be refunded except for the termination charge. 
    • 63. Trader can only terminate for breach of the agreement
  • Avoiding Unfair Business Practices:
    Unfair Contract Terms (ACL ss 23-28)
    • Unfair contract terms in standard form contracts are void.
    • 64. Consumer contracts  entered into on or after 1 July 2010 and to the terms of existing contracts that are renewed or changed on or after 1 July 2010.
    • 65. 3 part test of unfairness
    • 66. Must look at contract as a whole
    • 67. A term is unfair if:
    • 68. Would cause significant imbalance between the parties;
    • 69. Not reasonably necessary to protect legitimate business interest; AND
    • 70. Would cause detriment if used