Australian Consumer Law and B2B Contracts

This assignment delves into the application of the Australian Consumer Law (ACL) within Business-to-Business (B2B) contracts. It examines the relevance of implied terms like fitness for purpose in B2B settings and analyzes how the ACL's consumer protections extend to these transactions. The assignment also considers case studies, legislation, and scholarly articles to provide a comprehensive understanding of the legal framework governing B2B contracts under the ACL.

Consumer law

Advising Martin
Law of contract itself indicates the importance of adhering to certain legal terms and
conditions stated in a contractual agreement among two or more parties. It is basically an
intended arrangement among two or more parties where this procedure is duly enforceable by
law. A contract law thus shows a lawful binding among the parties who have decided to get into
an agreement. Although, there exists various type of contracts with a distinct nature of all and
together exists with certain enforceable clauses which is, specially to give it a legal alignment1.
Mainly there are two different type of contracts, on considering the formation of an agreement
which involves express and implied contracts. Express contracts are those which exists on the
basis of some expressively spoken or written terms. This is for instance to state about a person
selling his house at a certain amount and another person accepts to buy it within an agreed value,
with or without bargaining other related terms2. However, another type of contract namely
implicit contract relies on implied terms where one can relate to a very general instance of a
passenger sitting in the seat of a bus after buying its ticket. This together shows an agreed
contract among the bus chauffeur and the traveler.
Nature of consideration is referred to be yet another considerate aspect, on whose basis,
there exists bilateral and unilateral contracts where a bilateral contract seemingly involves two
distinct parties like a seller and a buyer intentionally getting into a contractual agreement3.
However, in unilateral contracts, there is a singly directed agreement where one is intended to
make an offer with no assurance of acceptance by another party. For example, an advertisement
1 Cuniberti, G., 2013. The international market for contracts: the most attractive contract
laws. Nw. J. Int'l L. & Bus. 34. pp.455.
2 Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
3 Taylor, D. and McNamara, N., 2014. The Australian consumer law after the first three years-is
it a success?. Curtin Law and Taxation Review. 1(1). pp.96-132.

in the newspaper, etc. Next is on the basis of execution where there exist executed and executory
contracts. Lastly, there exists a concerning aspect of validity, on whose basis, there exist total 5
distinct type of contacts, namely, valid, void, voidable, illegal and unenforceable.
Contractual elements thus play an important role, on whose basis, a legally binding
contract gets framed. There exists total 6 such elements, namely, offer, acceptance, consideration,
mutuality of compulsion, capability and a written instrument, which depends upon the agreed
terms of the contract4. Any violations in the contractual terms leads into a breached contract
which means any of the prespecified conditions have not been met or fulfilled and rather
dishonored. In such case, any of the involved parties may intend to impose on the prescribed
terms or consider recovering any financial harm, etc. Considering this, there are certain remedial
measures undertaken by the law to resolve such pertaining issues of contractual breach. These
are damages, specific performance and restitution or cancellation.
The present essay is based on the terminologies of Australian Consumer Law or ACL
where it is together based on 6 principal clauses. It is on considering its foremost section that
covers normal form customer along with the contracts of small businesses. Another division
states about its guaranteed protection of consumer rights at the time of purchasing products and
services5. Its third clause has together reflected it to be a nationwide law guaranteeing product
safety and implementation scheme with certain legal clauses that takes care of unsolicited
consumer agreements that covers telephonic and door to door sales, etc. It together involves
4 The application of the Australian Consumer Law to B2B transactions. 2017. [Online].
Available through: <https://www.holdingredlich.com/competition-consumer/the-application-of-
the-australian-consumer-law-to-b2b-transactions>.
5 Yip, M. and Goh, Y., 2017. Convergence between Australian common law and English
common law: The rule against penalties in the age of freedom of contract. Common Law World
Review. 46(1). pp.61-68.

simple countrywide rules for lay-by contracts along with the cases of forfeits, execution powers
and options for customer redressing, etc6.
ACL is applicable on the entire nation concerning all its states and regions and all
Australian businesses. It is duly administrated by the consumer protection agencies of Australian
states and territories along with the ACCC. Also, it is enforceable by all Australian law courts
and together involve the tribunals of all its states and regions7. This forum was suggested by the
Productivity Commission where they are expecting the ACL to deliver the benefits of $1.5 to
$4.5 billion. It is thus on referring to the present case of Martin where went to an electronic shop
to purchase a washing machine with some special features to wash gentle fabrics such as
Jockey’s silk, etc.
He specified this requirement to one of the sales assistance of the shop, Home Appliance
Haven, named Mandy who in turn suggested him to buy a machine called Genteel Mark II
washing machine that is specially meant for this purpose only. Martin on considering her
suggestion have stated about being unsure of this brand, where he never heard of it before.
Although, realizing Mandy’s assurance of having ample experience in this field, he agreed to buy
it for $1500 and proceeded to pay the amount at the cash counter. There, he was given a choice
of paying $200 extra for same day delivery or to wait for a week to get it delivered and Martin
agreed to make the extra payment on recalling his racing carnival on the very next day.
After pitying for the machine, he was together given a booklet of around 100 pages
specifying the terms and conditions of sale on his agreement of getting a hard copy. However, the
shopkeeper together gave a receipt with delivery instructions to Martin with a small note
attached to it, stating that there will be no choice of returning the product after 12 hours of
6 Latimer, P., 2016. Protecting Consumers from Unfair Contract Terms: Australian
Comparisons.
7 Paterson, J.M. and Brody, G., 2015. “Safety Net” Consumer Protection: Using Prohibitions on
Unfair and Unconscionable Conduct to Respond to Predatory Business Models. Journal of
consumer policy. 38(3). pp.331-355.

delivery. Martin received the product on the same day at around 5PM and used it on the very
next day at same time and hung the washed cloths to dry, all night. The very next morning, that is
after two days of purchasing, he found that all his silk cloths were shrunken and got devastated at
this fact. As a result, to which, he rang the showroom to complain about it where they asked him
to go through the condition number 250 of the booklet, given to him. In whose accordance,
Martin was required to pay a processing fee of $3000 prior to requesting for refund and in case,
it gets approved, he will be again required to pay an administration fee of $500.
It is therefore on considering the above case of Martin and advising him onto the same, it
is required to understand the contractual agreement that took place among them. This reflected a
principal existence of purchase agreement among Martin and Home Appliance Haven where
Martin is now feeling to get cheated after buying the machine, recommended by one of their
sales assistant. This necessitates to relate the given instance with that to some other factual cases
like Rasell & Anor V Garden City Vinyl and Carpet Centre Pty Ltd where this case has together
reflected a similar case to that of Martin as specified above where the buyer after purchasing a
carpet of worth $13180 faced an issue of watermarking8. Later, on appealing the court for justice,
the defendant party who sold the carpet to the consumer specified the actual cause behind it by
stating it a natural phenomenon of their manufacturing process. This twisted the entire case
where the purchaser argued for not informing this prior to buying the product and hence won the
case.
Another case law, Carpet Call Pty Ltd v Chan has together proved a deceived action of
the carpet company where they took a misleading approach for selling a high-priced carpet of
worth $40,000 to Chan. It is because the sold product did not meet his expectations for personal
usage and he later found to get cheated where despite of clarifying his exact requirement, they
tried fooling him and succeeded. Although, the court took a decision in favor of Chan and
applied the clauses of Section 52 on the defendant9. On relating both these cases with that to the
8 Oliver, J., 2014. When consumer goods turn bad: Mandatory reporting under the'Australian
Consumer Law'. Proctor, The. 34(2). pp.18.
9 Advertising and selling guide. 2017. [Online]. Available through:
<https://www.accc.gov.au/publications/advertising-selling/advertising-and-selling-guide/

given case of Martin, it can be said Martin can be precluded from getting refund after his
complain that took more than 12 hours and hence does not met the company’s norms. However,
on referring to the requirement of paying additional processing as well as administration fee,
Martin can hereby take assistance of consumer law court for a remedial judgement.
It is therefore on considering some prominent clauses of Section 54 and 55 of ACL, it has
been found that both of these are applicable in the present case of Martin where under the clauses
of section 54, the goods sold to the client should be of acceptable quality in terms of being safe,
durable and restricted from any sort of flaws10. Also, it should be manufactured with fine
finishing to further sell it in an acceptable appearance. In addition to this, the clauses of section
55 states that the product purchased by the customer should be enough potential to meet out the
specific demand of the consumer. Whereas, this clause was duly breached by the seller called
Mandy. As a result, to which, Mandy is not required to pay any such additional costs and can
rather opt to get a free repair or exchange.
consumer-guarantees/what-are-the-guarantees>.
10 Fitness for purpose' terms implied by statute. 2017. [Online]. Available through:
<http://www.constructionlawmadeeasy.com/fitnessforpurposetermsimpliedbystatute>.

REFERENCES
Books and Journals
Cuniberti, G., 2013. The international market for contracts: the most attractive contract laws. Nw.
J. Int'l L. & Bus. 34. pp.455.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Latimer, P., 2016. Protecting Consumers from Unfair Contract Terms: Australian Comparisons.
Oliver, J., 2014. When consumer goods turn bad: Mandatory reporting under the'Australian
Consumer Law'. Proctor, The. 34(2). pp.18.
Paterson, J.M. and Brody, G., 2015. “Safety Net” Consumer Protection: Using Prohibitions on
Unfair and Unconscionable Conduct to Respond to Predatory Business Models. Journal of
consumer policy. 38(3). pp.331-355.
Taylor, D. and McNamara, N., 2014. The Australian consumer law after the first three years-is it
a success?. Curtin Law and Taxation Review. 1(1). pp.96-132.
Yip, M. and Goh, Y., 2017. Convergence between Australian common law and English common
law: The rule against penalties in the age of freedom of contract. Common Law World
Review. 46(1). pp.61-68.
Online
Advertising and selling guide. 2017. [Online]. Available through:
<https://www.accc.gov.au/publications/advertising-selling/advertising-and-selling-guide/
consumer-guarantees/what-are-the-guarantees>.
Fitness for purpose' terms implied by statute. 2017. [Online]. Available through:
<http://www.constructionlawmadeeasy.com/fitnessforpurposetermsimpliedbystatute>.

The application of the Australian Consumer Law to B2B transactions. 2017. [Online]. Available
through: <https://www.holdingredlich.com/competition-consumer/the-application-of-the-
australian-consumer-law-to-b2b-transactions>.