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Acl small business v2


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Acl small business v2

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