Question 1 For a transaction to be considered under the ambit of Australian Consumer Law (ACL), it is essential that there must a consumer present in accordance with the definition outlined in s.3(1) ACL. With reference to this section, a consumer may be one who is able to fulfil atleast one of the conditions outlined below (Austlii, 2017). The buying price of the goods that the buyer pays must not exceed $ 40,000; or The underlying goods that have been purchased by the buyer would be utilised for personal or domestic usage and not for commercial purposes The transactions that have been enacted by Sangita need evaluation based on the above definition of consumer which would highlight if Sangita for the underlying transaction can be labelledasaconsumerornot.Thiswouldfurtherprovideclarityonwhetherthese transactions would fall within ambit of ACL or not. Transaction A: In the given transaction, a rice cooker has been bought by Sangita which would be used by her Aunt, Shindu. Further, relevant details about the transaction clearly highlight that the use of rice cooker would be to prepare food for the family and not any commercial use. Besides, the price paid by the buyer Sangita for this product is $ 59.95. In wake of the domestic use and price not exceeding $ 40,000, it would be fair to conclude that Sangita is categorised as consumer for the purposes of ACL. Transaction B: In the given transaction, an electric drill has been bought by Sangita which would be used by her uncle, Ramdas. Further, relevant details about the transaction clearly highlight that the use of electric drill would be for normal household repairs and not any commercial use. Besides, the price paid by the buyer Sangita for this product is $ 69.95. In wake of the domestic use and price not exceeding $ 40,000, it would be fair to conclude that Sangita is categorised as consumer for the purposes of ACL. Transaction C: In the given transaction, an electric toothbrush has been bought by Sangita which would be used by her cousin, Pooja. Further, relevant details about the transaction clearly highlight that the use of electric toothbrush would be for personal use of Pooja and not any commercial use. Besides, the price paid by the buyer Sangita for this product is $ 49.95.
In wake of the domestic use and price not exceeding $ 40,000, it would be fair to conclude that Sangita is categorised as consumer for the purposes of ACL. Therefore in accordance with the discussion carried out above, it can be concluded that for the purposes of the three transactions highlighted, Sangita would be labelled as consumer and therefore the ACL provisions would apply to these trasnactions. Question 2 In accordance with ACL, there are a host of implied consumer guarantees that are extended to consumers and are contained in s. 51 to s. 59. However, all these are not relevant to the underlying transactions. The relevant ones are briefly discussed as follows. The goods that are supplied by the supplier should be of acceptable quality as per s. 54, ACL (Austlii, 2017). This would mean that the underlying goods must be of merchantable quality which has been explained during the case commentary related to Medtel Pty Ltd v. Courtney[2003] FCAFC151 case. The various aspects of this are that good must not have any defect, must be safe, appropriate for the purpose the underlying good is normally used and must be acceptable in finish (Gibson and Fraser, 2014). In accordance with s.56, the suppliers and manufacture must ensure that the goods must adhere to the underlying description that is contained in the product catalogues and advertisements (Austlii, 2017). If there is any deviation with regards to colour or size from the description that has been mentioned, then the consumer can get it remedied. Further, the manufacturer or supplier cannot limit their liability by citing that it was the responsibility of the consumer to physically inspect and verify if the product matches with the description or not (Davenport and Parker, 2014). In accordance with s. 55, the good sold must be fit for any specified purpose that the consumer may have highlighted while making the purchase (Austlii, 2017). In line with the verdict in theRyan v Great Lakes Council[1999] FCA 177 case. There exists an implicit consumer guarantee on the part of the supplier so supply goods that are fit for consumer usage when there is fulfilment of the conditions highlighted below.
1)There has been an express statement by the consumer directed towards the supplier or agent in relation to the good being suitable for a given use. 2)While making the purchase, the consumer tends to rely on the knowledge or expertise that the supplier has in judging if the chosen product is suitable for the intended use or not. 3)Underthegivencircumstances,theconsumercanreasonablyrelyonthe supplier’s knowledge. The transactions enacted in this case would have to be analysed keeping the above consumer guarantees into consideration. Transaction A: In the given transaction, a rice cooker has been purchased by consumer Sangita. However, on the delivery of the parcel, it was found out that despite the outside cover describing the product insider as “rice cooker”, the actual product insider was an electric fry pan. As a result, there has been a breach of the implied consumer guarantee dealing with the goods complying with their underlying description. In the given situation, the product ordered was a rice cooker and the parcel also allegedly contained the same. However, the contents inside did not comply with the description outside and that of the product demanded by the customer. Hence, in accordance with s. 56, there has been a breach in relation to the given consumer guarantee. Transaction B: In the given transaction, an electric drill has been purchased by consumer Sangita. However, the product does not functional properly which is apparent from the details highlighted whereby on usage there is a burning smell coupled with drill becoming hot and essentially dysfunctional. Considering the relevant details, it seems that the product provided in this case does not have merchantable quality. There seem to be inherent technical issues with the drill owing to which it malfunctions from the first instance itself. Hence, in accordance with s. 54, there has been a breach in relation to the given consumer guarantee. Transaction C:Based on the given facts, it is apparent that an electric toothbrush has been purchased by Sangita for her cousin Pooja. While interacting with the assistant during the online sales, Sangita enquired as to whether the toothbrush model chosen by her can be operated through both main power and battery. This was an essential feature for Sangita to make the purchase since she is aware that Pooja would like to take this around with her. Sangita received assurance from the assistant that the chosen model could be operated in both modes. The product when actually received highlighted that it could only operate on main
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
power and had no supporting mechanism for battery operations. This leads to a breach of the consumer guarantee as per s. 55, ACL. It is apparent that during the interaction with the assistant, Sangita clearly or explicitly highlights the desired use for which it was imperative that the brush could be operated on battery. Also, considering an online sale and limited knowledge of various electric toothbrush models, it was appropriate for Sangita to act on the advice of the assistant. Therefore, the consumer guarantee extended through s. 55 has been breached. In line with the discussion carried out above, it would be appropriate to conclude that in every transaction, a breach of the provision of ACL has taken place and hence the next question would focus on remedies that are available. Question 3 For the violation of the ACL provisions, consumer can avail remedies which are driven by whether these breaches can be remedied or whether these can be categorised as major failure as highlighted by s. 260, ACL (LegalVision, 2016). If breach belongs to type which can be remedied, the in such a case statutory right is available to the consumer to demand that the produce be repaired, replaced or refunded. When there is a major failure, then a statutory right is extended to the consumer whereby he/she potentially reject the product or choose an option between refund and replacement (Austlii, 2017). The below mentioned scenarios would constitute as a major failure (LegalVision, 2016) The consumer would have not gone ahead with the purchase had the issue been known There is significant deviation of the actual good from their underlying description. The underlying product is not safe to use and thereby poses a safety hazard. It is noteworthy that the remedies highlighted above are available to use only when the damage is not caused by the consumer or when the good has been passed into the possession of the consumer. The transactions undertaken by Sangita need to be analysed considering the remedies available for breach of consumer guarantees.
Transaction A: In the underlying transaction, it can be concluded that the good actually provided to the consumer differs greatly from the description highlighted on the box used to carry the same. On the box, it was written that there was a rice cooker inside but instead an electric fry pan was contained. The given situation would fall within the ambit of major failure. As a result, a refund can be demanded by Sangita or she may replace the electric fry pan with the rice cooker. Transaction B: In the underlying transaction, it can be concluded that the product i.e. electric drill fails to comply with minimum quality standards since it has manufacturing defects owing to which it does not function properly. The given situation would fall within the ambit of major failure. As a result, a refund can be demanded by Sangita or she may replace the current electric drill with a new electric drill of merchantable quality. Transaction C: In the underlying transaction, the electric toothbrush that has been provided does not serve the purpose. Also, it does seem appropriate to infer that Sangita would not have purchased the current electric toothbrush model if the online sales assistant had told her that the brush cannot operate with batteries. The given situation would fall within the ambit of major failure. Therefore, Sangita can ask for refund or a replacement for the current electric toothbrush with a model that can run on batteries also. Question 4 With regards to validity of any exclusion clause, the relevant clause is s. 64. This section highlights that a particular contractual term which seeks to either exclude, restrict or modidy the underlying liability that seller has to bear in case of breach of consumer guarantees extended by ACL, will be considered as void and hence non-enforceabe (LSCSA, nd). The exclusion clause that is highlighted on the Myers sale receipts is indicated below. “Myers Stores offer no refund, exchange or replacement for items purchased online.” It is pertinent that the exclusion clause printed on the ticket aims to waive the liability of the seller (Myers) in relation to any potential breach of consumer guarantees. Provided by ACL and hence would be considered as void. Hence, the presence of the above clause on the online receipts would make no difference to the applicability of remedies discussed in question 3.
References Austlii (2017)COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2 The Australian ConsumerLaw[online]Availableat http://www7.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/caca2010265/sch2.html [Accessed May 10, 2018] Davenport, S. & Parker, D. (2014)Business and Law in Australia2nded.Sydney:LexisNexis Publications. Gibson, A. & Fraser, D. (2014)Business Law8thed. Sydney: Pearson Publications. LegalVision (2016)What Happens if I Don’t Meet the Consumer Guarantees?[online] Available athttps://legalvision.com.au/breaching-consumer-guarantees/[Accessed May 10, 2018] LSCSA (nd)Exclusion Clauses and the Australian Consumer Law[online] Available at https://www.lawhandbook.sa.gov.au/ch10s02s06s01.php[Accessed May 9, 2018]