Charlie's Legal Options: Sales of Goods Act and Consumer Law

This report analyzes a legal scenario involving Charlie, EnviroPro Pty Ltd, and Clean Aqua Pty Ltd, focusing on the Sales of Goods Act 1958 (Victoria) and the Australian Consumer Law (ACL). The report examines whether Charlie has grounds for legal action against EnviroPro for selling a product unfit f...Read More

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Cover Page
Name;
Student ID;
tutorial day & time
Tutor’s name
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Contents
Solution............................................................................................................................................3
Issues............................................................................................................................................3
Law...............................................................................................................................................3
Application...................................................................................................................................5
Conclusion...................................................................................................................................6
Reference List..................................................................................................................................7

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Solution
Issues
i. As per Sale of Good Act 1958 of Victoria), is there any chance of Charlie succeeding
against Enviro Pro Pty Ltd?
ii. As per Australian Consumer Law, is there any chance of Charlie succeeding against
Clean Aqua Pty Ltd?
Law
In order to attract the provisions of the 1958 Act, it is necessary that there must be some kind of
sale and purchase that has taken place amid the consumer or non-consumer and the vendor or
supplier. Further, the sale and purchase of the goods must have taken within the business course.
But, the main question is who the consumer is and who is the seller as per the provisions of 1958
Act. As per section 3, a buyer is the person who buys or agrees to buy the goods and seller is the
person who sells and agrees to sell the goods. As per section 7, the both the buyer and seller are
considered to be cable to enter into contracts provided they are capable as per the law of
contract, that is, the parties are major as per the law of the country and are mentally competent.
Also, as per section 85 of the Act the goods supplied are consumer goods provided the goods are
mainly for dometic, household or for consumption purposes (Franzi, 1980)
Now, whenever any seller is selling the goods to the buyer then there is an obligation upon him
to comply with the provisions of Part 1, Division 2 of the 1958 Act. There are few conditions and
warranties that are defined which are:
i. Implied undertaking – section 17 – there is an implied undertaking the seller posses
the requisite title of the goods prior to its sale (Niblett v Confectioners' Material.
ii. Sale by description – section 18 – there is a statutory condition on the seller that if the
sale of goods is based on description then the goods must correspond with the
description and is held in Frank v Grosvenor Motor Auctions Pty Ltd.
iii. Quality to fitness – section 19 – Normally there is no implied condition or warranty
related to fitness. But, as per section 19 (1) of the Act, if the buyer has specified to the
seller the specification prior the purchase of the goods then the goods so sold must

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match the description and any variation is contravention of section 19 (1) and is
rightly held in Alpine Beef Pty Ltd v Trycill Pty Ltd .
Also, if the seller deals with the goods with the goods of that description, then there is
an implied condition that the goods must be of merchantable quality and is held in
section 19 (1) (b) and is held in Australian Knitting Mills Ltd v Grant.
Now, section 18 and section 19 cannot be excluded in any manner unless and unless the sale
is of non-consumer goods.
Further, there is yet another law that is enacted with the aim to provide relief to the consumers.
The same is Australian Consumer Law.
Part 3-5 of the ACL deals with the protections that are laid down in favor of the consumers. The
protections must be served by the manufacturers of the goods. A manufacturer is a person who
makes the product or whose name is on the goods so sold and also includes an importer of the
goods (section 7 of the ACL). Now, every manufacturer must supply goods which are non
defective in nature but of the goods are defective a per section 9 of the law then the consumer
has every right to sue the manufacture for damages. A good is defective by analyzing its
marketing, packaging, instruction, warning etc. (Commonwealth consolidated Act, 2017)
Further, there are few statutory guarantees that must be complying with. The same are:
i. As per section 54 of the ACL, the goods must be of acceptable quality. If the goods
does not contain any description then it become unmercantable and are of not
acceptable quality and is held in H Beecham and Co Pty Ltd v Francis Howard and
Co Pty Ltd .
ii. As per section 56 of the ACL the goods must correspond with the description of the
goods. If the description of the goods is on the packaging then the same must
correspond with the packaging of the goods and is held in Varley v Whipp.
iii. As per section 55, the goods must fit for the disclosed purposes;
The law is now applied to the facts of the case.

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Application
Issue 1
A technology is developed by Clean Aqua Pty Ltd which is a domestic appliance, Clean Aqua,
and is for residential use.
Thus, as per section 85 of the Act, the goods so supplied are consumer goods as they are for use
of domestic is household purposes.
Now, Charlie visits one of the seller, EnviroPro Pty Ltd, and grabs one of the sales person
wherein he specifies that he requires Clean Aqua for drinking purposes.
Now, since EnviroPro Pty Ltd is the retailer of Clean Aqua Pty Ltd, thus, as per section 17, he
has the requisite title to sell. Also, as per section 19 (1), Charlie has specified the requirements of
the products prior to the purchase and submitted that he is relying on the sales person judgment.
Thus, there is now an implied condition that the product so supplied by sales person must be fit
for the purpose. Also, Charlie has specified the goods description and EnviroPro Pty Ltd deals in
the product that is required by Charlie, thus, as per section 19 (1) (b), the goods must be of
merchantable quality.
But, the goods is supplied are not fit for the purpose acquired by Charlie as the product can only
be used for gardens, swimming pools, toilets, clothes and dish washers and is not suitable for
drinking purposes.
Thus, EnviroPro Pty Ltd is in violation of section 18 and section 19 of the Act.
Also, section 18 and section 19 terms cannot be excluded if the contract is a consumer contract.
Since the contract amid Charlie and EnviroPro Pty Ltd is a consumer contract thus, the sign that
excludes the liability of EnviroPro Pty Ltd is not valid in nature.
Thus, the liability of EnviroPro Pty Ltd cannot be excluded and Charlie can sue EnviroPro Pty
Ltd for his damages.
Issue 2

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It is submitted that the Clean Aqua is the product that is produced by Clean Aqua Pty Ltd and
thus as per section 7 of the ACL, it is the manufacture of the said product. Now, being the
manufacturer of the product it must comply with the statutory guarantees that are laid down in
the law.
Now, Clean Aqua Pty Ltd did not comply with section 56 of the ACL as the goods the
description of the goods is on the packaging but the same was not part of the Clean Aqua when
the same was purchased by Charlie (Varley v Whipp). Thus, there is violation of section 56
which will empower Charlie to sue Clean Aqua Pty Ltd for the damages that are sustained by
him.
Conclusion
Thus, Charlie has the right to sue both Clean Aqua Pty Ltd and EnviroPro Pty Ltd as they has not
comply with their statuary conditions under the ACL and the Sales of Goods Act 1958
respectively.

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Reference List
Legislation
Sales of Goods Act 1958
Consumer and Competition Act (2010) Schedule 2- Australian Consumer Law
Case laws
Australian Knitting Mills Ltd v Grant (1933)
Alpine Beef Pty Ltd v Trycill Pty Ltd [2010].
Frank v Grosvenor Motor Auctions Pty Ltd (1960).
H Beecham and Co Pty Ltd v Francis Howard and Co Pty Ltd [1921].
Varley v Whipp (1900).