Australian Consumer Law & Guarantees

This assignment delves into the intricacies of the Australian Consumer Law (ACL) with a particular focus on consumer guarantees. It examines the ACL's provisions, relevant case law such as TPG Internet Pty Ltd v Australian Competition and Consumer Commission, and real-world examples to illustrate the application of these legal principles. The analysis also covers advertising standards and potential legal ramifications for misleading or deceptive conduct in marketing. The document aims to provide a comprehensive understanding of consumer rights and protections under the ACL.

Running Head: Law 1
Law

Law 2
Answer 1
Part A
Issue: whether Mary and Lianne enter into any contract through E-mail and is there valid offer
and acceptance present in the contract?
Law: in last few years, Court recognized the concept of entering into contract through e-mails
and validity of the E-mail contracts. There are number of cases related to E-mail contracts which
are decided by the Court such as Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd 1and
Stellard Pty Ltd v North Queensland Fuel Pty Ltd. Both the cases involve the situations in
which Court considers the validity of exchanged E-mails between the parties and also whether
there is any binding contract or not2.
In general contracts it is necessary that essential elements of the contract must be present, and
some of these essential elements are stated below:
 Offer- offer can be considered as definite promise which is made by one person to
another person. There is no particular form of offer and it can be made either orally or in
writing. However, offer can be constituted through the conduct of the parties also. It is
not necessary that offer can be made to specific person only it can be made to the world
at large.
 Acceptance- another important element of contract is acceptance. Acceptance is the
statement through which person to whom offer is directed agreeing to the offer. It is
necessary that offer is accepted by that person only to whom it is directed. However, after
giving acceptance parties are bound by these acceptances and it is not possible for parties
to cancel the contract. Acceptance must be given by offeree only in context of offer made
1 VANTAGE SYSTEMS PTY LTD -v- PRIOLO CORPORATION PTY LTD, [2015] WASCA 21; 47 WAR 547.
2 Ready, K. (2015). Email contracts – Who, What, When and Where – The formation of binding agreements through
email exchanges, <
http://www.mondaq.com/australia/x/431732/Contract+Law/Email+contracts+Who+What+When+and+Where+Th
e+formation+of+binding+agreements+through+email+exchanges>, Accessed on 23rd September 2017.

Law 3
by offeror. This can be understood through case law Crown v Clarke, (1927) 40 CLR
2273.
For effective acceptance, it is necessary that acceptance must be communicated to the
offeror. If acceptance is given through E-mail then provisions of Electronic Transaction
Act 1999 are applied. Section 14 of the Act states, time of receipt of acceptance is
considered as that time when mail related to acceptance send by offeree reach the
information system of offeror. It means that offer is accepted by the offeree at the time
when mail of acceptance send by offeree enters in the mail box of offeror4.
 Intention to create legal relations5: it is necessary for valid contract that parties intend to
create legal relatiosn at the time of formation of the contract. in other words, parties must
intend to bound themselves under the terms of the contract. this can be understood
through case law Air Great Lakes Pty Ltd v KS Easter, (Holdings) Pty Ltd, Supreme
Court of New South Wales [1989] 2 NSWLR 3096.
 Consideration7: consideration can be considered as price paid for promise made by one
party to the other party. In other words, it is the price which is asked by the promisor in
exchange of promise. It is necessary that consideration must be moved from one party to
another party who made the promise. This can be understood through case law Coulls v
Bagots Executor & Trustee Co Ltd, (1967) 119 CLR 4608.
3 Crown v Clarke, (1927) 40 CLR 227.
4 Electronic Transaction Act 1999- Section 14.
5 ACL, Intention, < https://www.australiancontractlaw.com/law/formation-intention.html>, Accessed on 23rd
September 2017.
6 Air Great Lakes Pty Ltd v KS Easter, (Holdings) Pty Ltd, Supreme Court of New South Wales [1989] 2 NSWLR 309
7 ACL, Consideration, < https://www.australiancontractlaw.com/law/formation-consideration.html>, Accessed on
23rd September 2017.
8 Coulls v Bagots Executor & Trustee Co Ltd, (1967) 119 CLR 460.

Law 4
It must be noted that, E-mail contract also include these essential elements that are offer,
acceptance, consideration, and intention to create legal relations. However, if valid offer and
acceptance is present in the E-mail negotiations then it can be considered as valid contract. This
can be understood through case law McHugh JA in GR Securities Pty Ltd v Baulkham Hills
Private Hospital Pty Ltd.9 In this case, McHugh stated even though e-mail negotiations
specifically stated that formal contract must be executed then also parties immediately bound
with the contract if valid offer and acceptance are present in the contract10.
Application: in the present case, both Mary and Lianne negotiated through E-mail and all the
essential elements of valid contract are present in this case such as offer is given by Mary
through advertisement to the world at large. Later, Lianne accept the offer given by Mary
through E-mail send by Lianne to Marry.
It must be noted that acceptance is considered as valid acceptance because section 14 of
Electronic Transactions Act 1999 states offer is accepted by the offeree at the time when mail of
acceptance send by offeree enters in the mail box of offeror. In this case, Mary reads the
acceptance mail after 5 hours because of the electricity fault. Therefore, time of receipt of
acceptance is the time when E-mail enters in the mailbox of Mary.
It must be noted that consideration of $10000 is present in the case, which can be considered as
prima facie evidence of intention of parties to create legal relations.
In Case law Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd11, court held that
parties are bound by the contract related to sale of land which was entered between the parties
9 Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622.
10 Mcleod, I. Email correspondence a valid and binding contract, court confirms, <
http://www.findlaw.com.au/articles/5751/email-correspondence-a-valid-and-binding-contract-.aspx>, Accessed
on 23rd September 2017.
11 Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd
[2015] QSC 119 (14/11998).

Law 5
through E-mail. Contract was binding because valid offer and acceptance is present in the
contract.
In this case also, both offer and acceptance are present. Therefore there is valid contract between
the parties because it is not possible to cancel the contract after accepting the contract.
Conclusion: valid contract exists between the parties, and both Mary and Lianne are bound with
the terms of the contract.

Law 6
Part B
Issue: Whether any terms of the contract are breached by the Mary, and if Mary breach the terms
of the contract then what rights are available to the Lianne against such breach?
Law: in Australia, consumer law is developed for the purpose of protecting the interest of
consumers and also promotes fair dealings with the consumer. Trader who is engaged in the
trade or commerce must compile with these guarantees while dealing with the consumers.
Guarantees provided by ACL are statutory guarantees and it cannot be excluded by any person12.
Following are some guarantees which are provided by the ACL to the consumer:
 Guarantee related to express warranty- it is the duty of trader to comply with all the
express warranties given by trader at the time of formation of contract. This guarantee is
stated under section 559 of ACL. As per this section if any warranty is given by supplier
and manufacturer that goods and services provided are compile with express warranty
then such goods and services must be compile with that express warranty13.
 Guarantee to perform duties with due care and skill- this guarantee is stated under section
60 of the Competition and consumer Act and as per this section trader who supplies
goods and services in trade and commerce must fulfill their obligations with due care and
skill14.
 Guarantee related to specified purpose- this guarantee is stated under section 61 of the
ACL, and as per this guarantee if consumer before entering into contract specifically
stated any purpose for which he acquired such goods and services, then it is the duty of
12 Austlii, Paterson, Jeannie Marie --- "The New Consumer Guarantee Law and the Reasons for Replacing the
Regime of Statutory Implied Terms in Consumer Transactions" [2011] MelbULawRw 8; (2011) 35(1) Melbourne
University Law Review 252, < http://www.austlii.edu.au/au/journals/MelbULawRw/2011/8.html>, accessed on 23rd
September 2017.
13 Competition and Consumer Act 2010- Schedule 2- Section 59
14 Competition and Consumer Act 2010- Schedule 2- Section 60.

Law 7
trader to ensure that goods and services met with that specific purpose. In other words,
trader ensures that result of the services and product meets the desired result of
consumer15.
If trader fails to meet statutory guarantees provided by ACL, then consumer has right to cancel
the contract, if services are not consumed then seek refund, and consumer can claim for
compensation for breach of statutory guarantees16.
Application: in this case, Lianne specifically asked for Malaysian cuisine and large space for
dancing at the time of entering into contract. Later, Mary fails to provide Malaysian cuisine and
also dance floor is very small. In this case, Lianne has right to seek compensation because Mary
breach his statutory guarantees stated under section 59, 60, and 61 of the ACL. In this Mary
breach express warranties provided to Lianne. This can be understood through case law Norman
Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCATA 04717. In this case, tribunal
stated that money back guarantee can be considered as express warranty.
In this case, Lianne does not receive desired result from the services for which she paid.
Therefore, Lianne has right to claim compensation from Mary for breach of consumer guarantees
under ACL. However, Lianne cannot terminate the contract because services are already
consumed.
Conclusion: Lianne can claim remedies for breach of statutory guarantee under ACL.
Answer 2
15 Competition and Consumer act 2010- Schedule 2- section 61.
16 ACCC, Consumer guarantees, < https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-
guarantees#consumer-guarantees-on-products-and-services>, Accessed on 23rd September 2017.
17 Norman Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCATA 047.

Law 8
Introduction:
Australian consumer law covers all the commercial dealings in the Australia with both private
and business consumers. It is necessary for those companies to take reasonable care that are
selling and promoting their goods and services through advertising. These organizations
accompanied with clients and media operators frame marketing strategies and activities for
advertising their goods. Organization must identify their clients and consider provisions of ACL
for the purpose of avoiding unconscionable dealing, misleading and deceptive conduct, and any
other conduct which is prohibited by ACL.
In other words, ACL protect not only the legitimate interest of the consumers but also ensures
fair dealings in Australia, and it is stated under Schedule 2 of Competition and consumer Act
201018. In this paper, provisions stated under ACL related to advertising and selling practices are
discussed and it also state the prohibition imposed on business organization by ACL while
advertising their goods and services. Lastly, paper is concluded by stating the brief conclusion
which summarizes the facts of this paper.
Online mode of advertising:
Business organizations use number of modes to publish their advertisement such as radio,
television, newspaper, etc. However, online mode of advertising is also the most important mode
now days because of the rapidly increase of online environment. Business organizations use this
mode for the purpose of promoting and selling their goods.it must be noted that provisions of
18 ACL, Consumer guanarntees, http://consumerlaw-staging.tspace.gov.au/files/2016/05/0553FT_ACL-
guides_Guarantees_web.pdf, Accessed on 23rd September 2017.

Law 9
ACL also applied on online mode, which means those organizations which publish their
advertisement through online environment are bound to follow the provisions of ACL related to
advertising and selling practice.
Provisions related to advertising and selling practices are stated under chapter 2 and chapter 3 of
ACL. These chapters deal with business conduct in commercial matters. In other words, if any
commercial transaction provide wrong information to other party then such matter falls under
chapter 2 and chapter 3 of ACL. It also states the conduct of business organization while
promoting and selling their products through advertising19.
Prohibition imposed by ACL:
As stated above, ACL protect the legitimate interest and rights of the consumer. For this purpose
ACL introduced section 1820 and section 29 of the Act for the purpose of prohibiting the
organization to engage in any conduct which is misleading and deceptive in nature. Section 18 is
considered as the most litigated provision in the ACL, and it is mainly introduced for the purpose
of protecting the rights of the consumer. Claim related to section 18 pleaded in all type of
jurisdiction and it is also merged with some other type of claim also. This can be understood
through example, contravention of section 18 can be considered as tort also. However, it must be
noted that if section 18 is brought by the plaintiff then usually party also state that section 29 is
also breached. Section 29 states false representation made to consumers for the purpose of
misleading and deceives the consumer. Organizations engaged in this conduct through various
modes such as by personal communication, through advertisement, etc.21.
19Legal Vision, Advertising and Marketing Series, https://legalvision.com.au/advertising-and-marketing-series-
illegal-conduct-in-advertising-and-marketing-under-the-australian-consumer-law/, Accessed on 23rd September
2017.
20 Competition and Consumer Act 2010- Schedule 2- Section 18.
21 Competition and Consumer Act 2010- Schedule 2- Section 29.

Law 10
Section 29 of the ACL states, it is completely illegal for business organizations to make any false
representation related to goods and services to any other party. This section can be compared
with section 18 and after comparison it can be concerned that approach of this section falls in the
context of section 18. The main aim of this section is to protect the consumers from those
suppliers who engaged in trade and commerce and falsely represent their goods to other parties.
Misleading and deceptive conduct include following behavior and factors:
 Party makes false representation and provides wrong information through advertisement
for the purpose of misleading the consumers.
 Consumer on the basis of wrong information and false representation enter into contract
with business.
 Important information in context of product and services provided by business is not
mentioned in the advertisement.
 False impression was created by the business on the customers.
In short, section 18 and 29 restrict such practices of business which mislead and deceive the
consumers and result in unfair dealings. It can also be said that these sections protect the
consumers and promotes fair dealings with consumers in Australia. Section 18 and 29 also
encourage the business to act in good faith and ensures interest of consumers as well.
Case law Australian Competition and Consumer Commission V TPG Internet Pty Ltd22 helps
in understanding the misleading and deceptive conduct related to advertisement and selling
22 Federal Court of Australia, (2012). TPG Internet Pty Ltd v Australian Competition and
Consumer Commission [2012] FCAFC 190 (20 December 2012),
<http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2012/190.html>, accessed on
19th September 2017.

Law 11
practices in Australia. In this case,, TPG published advertisement under which company stated
that unlimited internet was given by the company for only $29.99. This scheme was named as
ADSL2+ broadband internet plan. In actual company charged hidden cost from their consumers
in the following form:
 Company charged $30 per month from consumers for bundling their home connections
with the internet connect.
 Company also charged 149.99 as set-up fee.
ACCC filed application against the company on the ground that company mislead and deceive
their consumers under this new scheme. Application was filed by ACCC in Federal Court in
which primary Judge stated that TPG was liable under section 18 and 29 of ACL and ACCC
succeeded in their application. After this decision, TPG appeal against this decision in Full
Federal Court and succeeded. Later, High court set aside the decision made by Full Federal court
on the ground that Full Federal Court failed to apply the principles of PUXU case correctly23.
Conclusion:
Chapter 2 and 3 of ACL deals with the advertising and selling practices related to commercial
contracts, and ACL also introduced section 18 and 29 for the purpose of prohibiting the
misleading and deceptive conduct of business organization. The main aim of these sections is to
promote fair dealings in Australia.
23

Law 12
BIBLIOGRAPHY
Website
Ready, K. (2015). Email contracts – Who, What, When and Where – The formation of binding
agreements through email exchanges, <
http://www.mondaq.com/australia/x/431732/Contract+Law/Email+contracts+Who+What+When

Law 13
+and+Where+The+formation+of+binding+agreements+through+email+exchanges>, Accessed
on 23rd September 2017.
ACL, Intention, < https://www.australiancontractlaw.com/law/formation-intention.html>,
Accessed on 23rd September 2017.
ACL, Consideration, < https://www.australiancontractlaw.com/law/formation-
consideration.html>, Accessed on 23rd September 2017.
Mcleod, I. Email correspondence a valid and binding contract, court confirms, <
http://www.findlaw.com.au/articles/5751/email-correspondence-a-valid-and-binding-
contract-.aspx>, Accessed on 23rd September 2017.
Austlii, Paterson, Jeannie Marie --- "The New Consumer Guarantee Law and the Reasons for
Replacing the Regime of Statutory Implied Terms in Consumer Transactions" [2011]
MelbULawRw 8; (2011) 35(1) Melbourne University Law Review 252, <
http://www.austlii.edu.au/au/journals/MelbULawRw/2011/8.html>, accessed on 23rd September
2017.
ACCC, Consumer guarantees, < https://www.accc.gov.au/consumers/consumer-rights-
guarantees/consumer-guarantees#consumer-guarantees-on-products-and-services>, Accessed on
23rd September 2017.
ACL, Consumer guanarntees,
http://consumerlaw-staging.tspace.gov.au/files/2016/05/0553FT_ACL-
guides_Guarantees_web.pdf, Accessed on 23rd September 2017.
Legal Vision, Advertising and Marketing Series, https://legalvision.com.au/advertising-and-
marketing-series-illegal-conduct-in-advertising-and-marketing-under-the-australian-consumer-
law/, Accessed on 23rd September 2017.
Federal Court of Australia, (2012). TPG Internet Pty Ltd v Australian Competition and
Consumer Commission [2012] FCAFC 190 (20 December 2012),
<http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2012/190.html>, accessed on
19th September 2017.
Case law
Norman Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCATA 047.
Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd Stellard Pty Ltd & Anor v North
Queensland Fuel Pty Ltd [2015] QSC 119 (14/11998).

Law 14
Coulls v Bagots Executor & Trustee Co Ltd, (1967) 119 CLR 460.
Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622.
TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190.
Crown v Clarke, (1927) 40 CLR 227.
VANTAGE SYSTEMS PTY LTD -v- PRIOLO CORPORATION PTY LTD, [2015] WASCA
21; 47 WAR 547.
Air Great Lakes Pty Ltd v KS Easter, (Holdings) Pty Ltd, Supreme Court of New South Wales
[1989] 2 NSWLR 309.
Statute
Competition and Consumer Act 2010- Schedule 2.
Electronic Transaction Act 1999.