Statutory Guarantees and Liability under Australian Consumer Law

This document discusses the statutory guarantees available to consumers under Australian Consumer Law (ACL) and the liability of businesses in case of defective products. It also highlights the illegal business practices that contravene ACL.

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Part (a)
In accordance with Australian Consumer Law (ACL), there are certain statutory guarantees
available to consumers. In the given scenario, The customer would be considered under ACL
as the definition under s. 3 is satisfied. One of the implicit statutory guarantees available to
the consumers is that the produce must be of acceptable quality (s. 54). In case there is any
defect in the product, the customer can claim remedy under ACL from the retailer despite the
defect being at the end of manufacturer. The retailer cannot deny claim under ACL for selling
defective goods and hence would need to replace or refund. Therefore, advice provided by
Marcus in this case is incorrect as he would be liable under ACL. Hence, either replacement
or refund should be provided.
Part (b)
The business model of Slacker is illegal since it contravenes with the provisions of Australian
Consumer Law 2010. The arrangement in place by Slacker would not be termed as a hire
purchase agreement but a Lay-by agreement. In a lay-by agreement, the customer tends to
make the purchase of the product and pays the money in instalments before receiving the
possession of the concerned product. It is noteworthy that in such agreements if the customer
fails to make the necessary instalments, then the lay-by agreement would be cancelled. In
such a scenario, the seller needs to refund all the instalments paid by the customer after
retaining any pre-determined termination fee. Considering that Slacker tends to retain all the
instalments on cancellation , hence this is an illegal practice.
Part (c)
In accordance with Australian Consumer Law (ACL), there are certain statutory guarantees
available to consumers. In the given scenario, The customer would be considered under ACL
as the definition under s. 3 is satisfied. One of the implicit statutory guarantees available to
the consumers is that the produce must be of acceptable quality (s. 54). A key aspect of
acceptable quality is that the product should be fit to use for the purpose that it would be
normally assumed to be used for. The product in the scenario presented is Bar-B-Que seat. It
would be reasonable to assume that a seat should be suitable for sitting purpose even if not
suitable for bouncing. Considering that the seat tends to crack when a person with more than
90kg weight tends to sit, it is evident that the product is not of acceptable quality.This is
because 90kg limit is relatively smaller considering the general population in Australia as a

significant proportion of customers would exceed this weight. Further, on account of the seat
breaking, the pole potentially can cause serious injury. The liability for this damage that the
customer would incur on account of the faulty product would fall on Slacker. Thus, besides
providing the refund on the product , Slacker would also need to give damages. Hence, it is
better that Slacker withdraws the product to avoid the above mentioned consequences under
ACL.