Consumer Guarantees and Duty of Care in Australian Law

Running Head: C05119
1
CORP/ BUSS LAW: C05119
Student’s Name
Institutional Affiliation

C05119 2
QUESTION 1
ISSUES
1. Whether the product, the refrigerator, was consumer guaranteed under the Australian
Consumer Law.
2. Whether the Australian Consumer Law applies after the lapse of the frame of time given.
3. Whether the seller can rely on the manufacturer warranty.
4. Whether James is entitled to the replacement of the refrigerator.
RULES
Fundamental rights of consumers are protected under the Australian Consumer Law (ACL).
These rights are enforced regardless of any warranty provided by the manufacturer.
The general principles of the Common Law precedent and relevant to this case will also be of
essence in this case.
The general principles Australia Contract Law such as the offer, acceptance, consideration,
capacity and formalities, are important in this commercial transaction case.
ANALYSIS
1. Whether the product, the refrigerator, was consumer guaranteed under the Australian
Consumer Law.
According to Chapter 1 of the Australian Consumer Law (ACL), businesses must guarantee the
products they sell for products worth less than $40,000.
Under the Australian Consumer Law, all goods purchased by a consumer are covered under the
consumer guarantees embodied in Part 2 under Chapter 3 of the Australian Consumer Law. Any
business that supplies goods and services is mandated to ensure that all the relevant consumer
guarantees under the Australian Consumer Law are complied with.
Moreover, according to part 2 chapter 3 of the Australian Consumer Law, there are consumer
guarantees that are ab initio applied automatically which includes that:
a) The buyer will have the right to sell the goods.
b) The goods are of merchantable quality.

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c) The goods are fit for the purpose which it was bought.
d) The goods match their description.
2. Whether the Australian Consumer Law applies after the lapse of the frame of time given.
Australian Consumer Act was specially construed and with the intention of protecting the
consumer against warranties that would infringe his consumerism rights and to bridge the
difference in knowledge between the manufacturer and the consumer, the seller and the buyer.
Under the Australian Consumer Act, regardless of any warranty that the manufacturer can rely
on to escape liability, the consumer is still entitled to repair, refund or replacement even after the
time lapses (Grubb, 2018). This remedy is still likely to be available if the following conditions
should be satisfied subject to which the consumer will be entitled to a replacement (Grubb,
2018):
a) If the consumer asks the Australian Consumer Law to be applied or primarily regarded in
his case.
b) If it is proved that it is a manufacturing defect that rendered the refrigerator to stop
working.
c) If it is reasonable that the refrigerator should still be working quality when compared to
other ordinary refrigerators.
3. Whether the seller can rely on the manufacturer warranty.
The manufacturer warranty is also called the warranty against defects. The manufacturer cannot
escape liability on the reliance of a warranty that enables him to fail to perform in a contract that
he is party substantively. Every party to a contract has his/her obligations and duty to
performance of that relevant contract.
Furthermore, the manufacturer is under an obligation under the Australian Consumer Law to
supply goods, and in this case, refrigerator, that is fit for the purpose which it was intended, that
is of merchantable quality and that corresponds with its description.
4. Whether James is entitled to the replacement of the refrigerator.
The warranties of defect in products are guarantees made to the consumer during the time of
contract of sale or supply, that if the goods sold or supplied are defective, the manufacturer will
(Australian Competition and Consumer Commission., 2019).