Australian Consumer Law Case Study

This legal report analyzes a case involving a breach of the Australian Consumer Law (ACL). The report examines several issues, including whether Chong is a consumer under the ACL, whether Jason breached the law by advertising a used truck as new, and whether a waiver clause in the purchase agreement is valid. The analysis delves into relevant sections of the ACL, including sections 3, 18, 29, and 90, and considers relevant case law such as Australian Competition and Consumer Commission v Bunavit Pty Ltd, Bevanere Pty Ltd v. Gaetan Djino Lubidineuse & Ors, Houghton v Arms, and Butcher v Lachlan Elder Realty Pty Ltd. The report concludes that Jason breached multiple provisions of the ACL through false and misleading representations and deceptive conduct, allowing Chong to potentially cancel the contract and seek remedies.

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Cover Page
Name of the student
Student ID
word count

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Contents
Solution.......................................................................................................................................................3
Issue 1.........................................................................................................................................................3
Applicable Law.......................................................................................................................................3
Application of Law..................................................................................................................................3
Conclusion...............................................................................................................................................3
Issue 2.........................................................................................................................................................4
Applicable law.........................................................................................................................................4
False and misleading representation....................................................................................................4
Application of law...................................................................................................................................4
Conclusion...............................................................................................................................................5
Issue 3.........................................................................................................................................................5
Applicable law.........................................................................................................................................5
Application of law...................................................................................................................................5
Conclusion...............................................................................................................................................5
Issue 4.........................................................................................................................................................5
Applicable law.........................................................................................................................................6
Application of law...................................................................................................................................6
Conclusion...............................................................................................................................................6
Issue 5.........................................................................................................................................................6
Applicable law.........................................................................................................................................6
Misleading and Deceptive conduct......................................................................................................6
Application of law...................................................................................................................................7
Conclusion...............................................................................................................................................7
Reference List.............................................................................................................................................8

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Solution
Issue 1
Is Chong a consumer under the Australian Consumer Law?
Applicable Law
The law dealing with the Australian Consumer Law (ACL) is applicable in the given scenario.
The ACL is framed for the protection of consumers. Section 3 of the ACL defines a consumer.
As per section 3, a person purchasing goods is considered to be a consumer provided:
i. The max amount of the goods so purchased must not exceed $ 40,000;
ii. However, if the goods are purchased for more than $ 40,000, then such goods must be
acquired for:
a. The goods must be purchased for consumption/household/domestic/personal use;
b. The article is a vehicle/trailer which is required in the transport of goods on public
road.
But, if the goods are acquired for re sale or for use on trade/commerce, then, such action cannot
be carried out by a consumer. In Bevanere Pty Ltd v. Gaetan Djino Lubidineuse & Ors (1985)
the scope of section 3 was explained. ( Bailey, 2016)
Application of Law
It is submitted, that Chong is intended to buy a truck for his construction business and he buys a
white 6 wheel Hino Tipper priced at $55,000.
As per section 3 of ACL, since the price of the truck is more than $ 40,000 then Chong must not
be considered as a consumer. But, as per section 3 (1) (b)- (c), the truck is acquired by Chong for
consumption and the same is to be used in the transport of goods on public roads. Thus, it does
not make any difference whether the amount is less than $ 40,000 or not.
Conclusion
So, Chong is a consumer as per section 3 of ACL.

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Issue 2
Did Jason breach any law when he advertised a used truck as brand new?
Applicable law
Now, once the purchaser falls in the category of the consumer there are few actions which are
prohibited to undertake by the seller of the goods.
False and misleading representation
Part 3-1, Division 1 of ACL (section 29) submits that no manufacturer must indulge in any act or
promotion of goods that results in any kind of false and misleading representation upon the
consumer. Some of the representations that are considered to be false and misleading include:
i. That the goods so supplied are of certain value, quality, style, composition, model,
quality, grade or of any previous use;
ii. That the goods supplied are new;
iii. A representation that certain person has confirmed the purchase of goods;
iv. That the goods has certain kinds of benefits
v. About price, repair facility, origin,
vi. A representation that certain guarantee, warranty is excluded. In Australian
Competition and Consumer Commission v Bunavit Pty Ltd [2016], violation of
section 29 (1) (m) was taken into consideration. (Hannebery and Sapountsis, 2016)
If any seller is found to be in contravention of section 29 of ACL must face pecuniary penalties.
In Kailash center for personal development Inc, v Yoga Malik Pty limited (2003), the scope of
section 29 of ACL was analyzed. ( Davidson, 2015)
Application of law
Now, when Chong purchased the truck from Jason then there are few representations that are
made by him. That is:
i. The truck is almost new, is in immaculate condition with no mechanical fault.

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ii. That a clause is inserted into the purchase agreement waiving his protection under the
ACL guarantees.
It is submitted that these representations of Jason are violation o section 29 of ACL. As per
section 29 (1) (m), he cannot represent the waiver of any guarantees provided under the ACL.
Thus, as per Australian Competition and Consumer Commission v Bunavit Pty Ltd , there is
violation. Also, by representing the truck as new, he make a misrepresentation as per section 29
(1) ((a-c).
Conclusion
So, Jason is in violation of section 29 of ACL when he advertised a used truck as brand new?
Issue 3
Did Jason breach the law when he included the waiver in the agreement?
Applicable law
It is specifically submitted under section 18 and section 29 of ACL that the liability raised under
section 18 of ACL cannot be excluded. Thus, if any seller includes a waiver term in the contract
then the same has no relevance.
Application of law
As per section 18 and 19 of ACL, no statutory guarantee can be excluded even if clause is
incorporated. Thus, Jason cannot claim that Chong waived his protection under the statutory
guarantees when he signed the purchase agreement.
Conclusion
Thus, even if Chong has signed the waiver clause, still the same is not applicable as per section
90 of ACL.
Issue 4
Can Jason claim that Chong waived his protection under the statutory guarantees when he signed
the purchase agreement?

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Applicable law
As per section 90 of the ACL, a consumer has no right to waive his rights under ACL by signing
a contractual agreement with the seller. If the seller persuades the consumer to do then he may
face civil and criminal charges and a penalty of $50,000 (body corporate) and $10,000
(individual). (Austi, 2016)
Application of law
As per section 90, no seller can persuade the consumer to waive his consumer guarantees
mentioned under ACL nor there any validity of the exclusion clause if made part of the contract.
Conclusion
Thus, Jason cannot claim that Chong waived his protection under the statutory guarantees when
he signed the purchase agreement.
Issue 5
Has Jason breached any other provisions of the Australian Consumer Law?
Applicable law
Misleading and Deceptive conduct
As per section 18 of ACL, no seller must act which results in misleading or deception of the
consumer. If the seller in a trade or commerce made any statement or act (which in the
knowledge of the seller is false and misleading) upon which the seller relied and because of such
reliance, if the consumer suffers losses, then the act of the seller is in vocalization of section 18,
provided the seller is aware that the consumer is relying upon his sense of judgment prior
entering into a contract with him. the scope of section 18 of ACL is analyzed in Houghton v
Arms [2006] and Butcher v Lachlan Elder Realty Pty Ltd [2004].
Violation of section 18 results in imposing fines (up to $1.1 million (corporations) and $220,000
(individuals); claim for damages,

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Application of law
Now, when Chong was purchasing truck from Jason, Jason submitted that the truck has no
mechanical fault but in reality he is aware that truck has oil leaks. Also, Jason is aware that
Chong doesn’t understand English and is mainly relying on the sense of judgment of Jason.
Thus, Jason intentionally deceives Chong by making false statements of facts and misled Chong.,
Thus, as per Houghton v Arms and Butcher v Lachlan Elder Realty Pty Ltd, Jason is on violation
of section 18 of ACL.
Conclusion
Thus, Chong can cancel the contract as Jason is in violation of section 18of the ACL. There is
false representation and deceptive conduct on the part of Jason and thus Chong has every rights
to terminate the contract.

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Reference List
Books/Articles/Journals
Bailey, J (2016). Construction Law, CRC Press.
Davidson, A. (2015) Social Media & Electronic Commerce Law, Cambridge University Press.
Case laws
Australian Competition and Consumer Commission v Bunavit Pty Ltd [2016],
Bevanere Pty Ltd v. Gaetan Djino Lubidineuse & Ors (1985).
Butcher v Lachlan Elder Realty Pty Ltd [2004].
Houghton v Arms [2006]
Kailash center for personal development Inc, v Yoga Malik Pty limited (2003).
Online Material
Austi (2016) Consumers and Contracts (Online). Available at:
http://austlii.community/foswiki/Archive/ACTLawHbk/ConsumersAndContractsAustralia
nConsumerLaw. Accessed on 15th September 2016.
Hannebery and Sapountsis (2016) Australian Consumer Law Update: Accc Cases Targeting
False Or Misleading Representations (Online). Available at:
http://www.davies.com.au/ip-news/australian-consumer-law-update-accc-cases-targeting-
false-or-misleading-rep. Accessed on 15th September 2016.