Analysis of Consumer Law Guarantees and Remedies in Australia

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Business Law
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Table of Contents
Introduction.................................................................................................................................................3
Q.1 Explain whether Betty is entitled to exercise Australia Consumer Law guarantees and how long does
she have to exercise her rights?..................................................................................................................4
Q.2 Provide advice to Betty what are the available remedies that she could apply under the Australian
Consumer Law and what are the possible penalties that Barossa Valley Mountain Wines Pty Ltd could
incur if there is deemed to be a breach of Australian Consumer Law?.......................................................6
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
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Introduction
Australian Consumer Law includes all the cases that are related to unfair contract terms, consumer
guarantees, misleading conduct, wrong conduct, manufacturers’ liability, and specific unfair practices.
Consumer according to the law is a one who purchases some products or acquires some services to
satisfy his personal or social needs. In order to protect the consumers from fraud or unfair trading by the
seller the government of the Australian country has framed Competition and Consumer Act, 2010. This
act has been enacted to support the consumer from all the kinds of frauds and illegal trading techniques
and to protect their rights from being exploited.
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Q.1 Explain whether Betty is entitled to exercise Australia Consumer Law guarantees and how long
does she have to exercise her rights?
The Competition and Consumer Act, (2010) applies to all the market areas in Australia. It protects the
relationships and the interests between the manufacturers, retailers, wholesalers, suppliers, and buyers.
Its main aim is to safeguard the interests of all the Australian citizens following the provisions of the
consumer protection act. It includes mainly the safety of the product and labeling, price monitoring,
mergers, acquisitions, unfair trading practices and many more. The Australian Consumer Law sets rights
for the protection of the consumer which are called consumer guarantee. These guarantees give the
consumer the right to repair, replace or refund and also compensation for the damages and loss caused
to the buyer and also consumer can cancel the services if it finds its fault in any case. When the
consumer buys some product or renders some services then some of the products include already
mentioned guarantees that the product will work according to the way the buyer has asked it to work.
The consumer guarantee should apply on
 The products which are of acceptable quality
 The product must be the same as described by the salesperson, in advertisement or promotion
 Gifts which are given to the other person with the proof of purchase
 Online goods and services which are brought from Australian businesses.
According to the Australian Competition and Consumer Act, 2010 the buyer is the person who purchases
some goods or acquires some services should not be of more than $40,000, for his personal use or that
product or service can be delivered to some other person with the permission or prior consent of that
person.
In the above-mentioned case study, it is clear that James has given bill to Betty as proof of purchase and
with the help of that proof she is able to demand for the refund from the seller. Now it should also be
seen in the above case that the product that is purchased must be consumed after taking into
consideration the expiry date or the manufacturing date of the product or the time period prescribed by
the seller at the time of purchase. If the product is consumed after the expiry of the product then the
refund should be asked within the time prescribed by the seller at the time of purchase or mentioned in
the invoice.
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As Per the Competition and Consumer act, 2010, the buyer of the product has the right to ask for the
refund in any case whether its warranty gets expired and there is no limited time set to ask for the
refund. Hence Betty is entitled to demand for the refund till any time and also the compensation for her
illness from the seller as the ingredients which were used in the wine were not good.
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Q.2 Provide advice to Betty what are the available remedies that she could apply under the Australian
Consumer Law and what are the possible penalties that Barossa Valley Mountain Wines Pty Ltd could
incur if there is deemed to be a breach of Australian Consumer Law?
According to the Competition and Consumer Act, 2010 provisions, if a supplier fails to provide the
product according to the demands of the buyer and provides the low-quality goods then the consumer
is entitled to the following remedies:
 Repair or Replacement,
 Refund, and
 Compensation for the loss,
 Cancellation of services.
If the product which a person has purchased has a minor problem, then that problem can be repaired
for free if the supplier agrees to it. But if the supplier cannot provide a free repair then being a
consumer he can ask for the replacement, refund or the compensation also. Also if the problem with the
product is very serious then the buyer can ask for the replacement of the product.
According to the application of the law, the buyer can also demand the refund. This is a remedy where
the buyer can demand refund for the products that are defective. This is the right of the consumer to
directly ask for the refund for the products and protects the consumer from being exploited by the
business. The consumer can also ask for the replacement of the defective products. For this it is
necessary the product be same as it was at the time of purchase. The consumer can also ask for
compensation if the product purchased by the consumer was unfair and hazardous for the consumers.
After the consumption of the product if the consumer suffers from some illness or had loss then he is
entitled to get the compensation from the supplier.
A consumer might be able to cover all the damages in certain cases. If in a case, the consumer directly
purchases the product from a manufacturer then the remedies will be directly asked from the
manufacturer only. The consumer is also having the right to cancel his services. The cancellation of the
service can be done before the fulfillment of the service due to some of the defects or where the low
price is found for the same service.
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Advice to the Betty, In the present case this is seen that Betty was provided wine which was not as
described and also its taste was different due to which she fell ill, hence for the defective wine which
was provided to her she is entitled to the refund as per the provisions of the Competition and Consumer
Act, 2010.
According to the Competition and Consumer Act, 2010, the penalties will be laid upon Barossa Valley
Mountain Vines Pvt. Ltd. for making a misleading presentation for the goods or deceptive conduct. The
penalties are monetary fines imposed and collected by civil court. Those penalties are:
 The maximum fines which are imposed on a corporation are $1.1 million and $220,000 for an
individual,
 Also, there may be injunctions or damages orders on companies or individuals.
In recent years, the Australian Competition and Consumer Act, 2010, professed that the current
penalties which are being imposed are inadequate to stop the businesses from engaging in misleading
conduct and deceptive conducts. Hence Under the new law, the maximum penalties imposed for
corporations will increase from $1.1 million to the greater of one of the following:
$10 million
3 x the amount of the benefactor
If in a case the amount of the benefit can’t be found out – 10% of the annual turnover.
The maximum penalty for individuals will also increase from $220,000 to $500,000.
Refer to the case Law: Australian Competition and Consumer Commission v H.J. Heinz Company
Australia Limited (No 2) [2018] FCA 1286-
In this case, the court found H.J. Heinz Company Australia Limited guilty for making false or misleading
presentations. The proceeding was in relation to a snack marketed for small kids. The court ordered the
company to set up a compliance program relating to consumer protection and or also a penalty of
$2.25m.
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Conclusion
This is seen that the Competition and Consumer Act, 2010, is the most important act which safeguards
the interest of the consumers and also the consumers should be aware of their rights and remedies
which can be used at the time of any misleading or deceptive conduct on the part of the businesses. This
also makes the businesses aware that if it will follow any unfair market practices then the penalties will
be imposed on the businesses.
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References
Australian Competition and Consumer Commission, (2018). Consumer law penalties set to increase.
[Online]. ACCC. Available at: https://www.accc.gov.au/media-release/consumer-law-penalties-
set-to-increase. [Accessed 12 September 2019].
Australian Competition and Consumer Commission, (2019). Consumer Rights & Guarantees. [Online].
ACCC. Available at: https://www.accc.gov.au/consumers/consumer-rights-guarantees.
[Accessed 12 September 2019].
Australian Competition and Consumer Commission, (2019). Legislation. [Online]. ACCC. Available at:
https://www.accc.gov.au/about-us/australian-competition-consumer-commission/
legislation#more-information. [Accessed 12 September 2019].
False or misleading claims, (2019). [Online]. Available at:
https://www.accc.gov.au/consumers/misleading-claims-advertising/false-or-misleading-claims.
[Accessed 12 September 2019].
Fines and Penalties, (2019). [Online]. Available at: https://www.accc.gov.au/business/business-rights-
protections/fines-penalties. [Accessed 12 September 2019].
Holley Nethercote Commercial & Financial Services Lawyers, (2019). Competition and Consumer
Law(Trade Practices) and Breaches. [Online]. Holley Nethercote Commercial & Financial Services
Lawyers. Available at: https://www.hnlaw.com.au/services/commercial-law/competition-and-
consumer-law/trade-practices-and-breaches. [Accessed 12 September 2019].
Legal vision, (2018). Breach of Consumer Guarantees. [Online]. Legal vision. Available at:
https://legalvision.com.au/breach-of-consumer-guarantee/. [Accessed 12 September 2019].
Lexology, (2018). Penalties for Australian Consumer Law breaches increase tenfold (if not more).
[Online]. Lexology. Available at: https://www.lexology.com/library/detail.aspx?g=2aa7c7ca-
a6d8-4e82-9d84-a70dadeacb46. [Accessed 12 September 2019].
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Case Law
Australian Competition and Consumer Commission v H.J. Heinz Company Australia Limited (No 2) [2018]
FCA 1286.
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