Australian Commercial Law: ACL, Consumer Guarantees and Remedies

This essay provides an overview of Australian Consumer Law (ACL), focusing on consumer guarantees and remedies. It begins with an introduction to the ACL and its application to online transactions. The paper then analyzes several case studies involving purchases from Myers Stores, examining implied guarantees related to product descriptions, acceptable quality, and fitness for a specified purpose. The analysis includes relevant sections of the ACL, such as sections 54, 56, and 61. Furthermore, the essay discusses remedies available to consumers in cases of breach of the ACL, differentiating between major and minor failures and outlining options such as repair, replacement, refund, and contract cancellation. The legal effect of receipts as proof of purchase is also addressed, culminating in a conclusion that reinforces the ACL's role in protecting consumers in both online and offline transactions. The essay highlights the rights and protections afforded to consumers under the ACL and provides a comprehensive understanding of consumer rights and remedies.

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Australian Commercial Law

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Introduction:
Australian Consumer law (ACL) provides short but important introduction to the commercial
law in Australia. Various consumer guarantees are provided by the Australian Consumer Law,
and these guarantees are considered as the set of rules which are mainly implemented on goods
and services purchased by customers in context of ACL. In other words, various situations are
set out under these rules in which consumer has right to take remedy from the seller. These
guarantees are automatically applied on the purchase and there is no need of any voluntary or
extended warranty provided by a seller or manufacturer of goods and services (ACCC, n.d.).
It must be noted that, all these rights are applied on the purchases made by the consumers
through online mode also, which means in case consumer purchase the goods and services from
the online business of Australia then all these consumer guarantees applied. This essay defines
different areas of the ACL on the basis on case study. Structure of the paper is divided into four
sections and each section address different concept of ACL. Lastly, brief conclusion is provided
under which all the relevant provisions are summarized.
Transactions under ACL:
Section 3 of the competition and Consumer Act 2010- schedule 2 stated the meaning of
consumer and as per this section an individual is purchasing specific goods as a consumer if the
price paid or payable for the goods does not exceed $ 40000 or any other amount prescribed in
context of this paragraph. This section further states that goods purchased by person must be of
such nature as they purchased for personal, domestic or household use or consumption or the
gods related to any vehicle purchased mainly for the purpose of using it in the transport of goods
on public roads. All the rights stated under the ACL are applied on the consumer defined in this
section.
It must be noted that, if an individual purchased any product from online and such purchase fall
under section 3 of the ACL then al the consumers rights stated under ACL are applied on online
shopping also. In other words, if person purchased any goods from Australian online business
then all the consumer rights applied on them. However, these rights are also applied if person
buy products from an overseas online business.

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In the present case, Sangita purchased Diwali gifts for her family from the online store of Myers
Stores. In this all the products purchased by Sangita fall under section 3 of the ACL because the
entire product amounted less than $40000 and personal, domestic or household use or
consumption of the products are possible. Therefore it can be said that, transactions between
Sangita and Myers fall under the ACL and all the consumer guarantees are applied on these
transactions.
Implied Guarantees:
As stated under the ACL, goods purchased from an Australian seller are covered by the
consumer guarantee if such goods are new and second hand products, item for sale, goods
purchased from an online store of Australian seller. Therefore, all the consumer implied
warranties are applied on these transactions.
Following implied warranties are applied on the products purchased by Sangita from the online
store:
Product- Sangita purchased rice cooker for her aunt for $59.95, but when the product was
delivered her aunt found box of rice cooker but there was electric fry pan.
Advice- in this section 56 of the ACL stated the guarantee related to the supply of goods in
context of description. In case, goods are supplied to the person in lieu of trade or commerce
then goods supplied to the consumer must be match with the description, and the supply does not
occur in context of sale by auction. This section provides the guarantee that the supplied goods
must match with the description.
In the present case, Sangita can rely on guarantee provided to consumers under Section 56 of the
ACL because goods send by Myers does not match with the description stated by the seller. As
goods delivered by the seller are wrong because seller sends electric fry man instead of rice
cooker. Goods delivered does not match with the description given by sellers and description
stated on the box. Therefore, Myers breaches section 54 of the ACL (Alderman, n.d.; ACL, n.d.).
Product- Sangita purchased electric drill for her uncle for $ 69.95 and after using the drill for the
first time her uncle found that drill was hot and would not work.

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Advice- in this case, Sangita has right under section 54 of the ACL to get the goods of acceptable
quality. This section applies if any goods are supplied by seller to the buyer in lieu of trade or
commerce, but such goods must not be selling in context of auction. This section provides the
guarantee that the goods delivered to the consumer must be of acceptable quality. Clause 2 of
this section states that goods are considered as of acceptable quality if these goods are:
 Fit for the purpose for which such goods are supplied.
 Good is acceptable in context of its appearance and finishing.
 Goods do not contain any defects.
 Goods are safe and durable (ACCC, n.d.).
This can be understood through case law In Norton v Hervey Motors Ltd [1996] DCR 427 (DC).
In this case, court stated that minor defects in the goods are considered as good for breach of this
section.
It must be noted that there is an exception also which states that goods are of acceptable quality
if the supplier inform the consumer about the defective qualities of the product before the sale of
the goods, and in case goods are examined by the consumer before the sale.
In the present case, Sangita can take action against the Myers because Myers breach section 54
of the ACL and as per these section goods is not of acceptable quality if gods are not free from
defects. As per this section guarantee is provided to the consumer that the goods delivered to
them is of acceptable quality. Clause 2 of this section states that goods are considered as of
acceptable quality if these goods do not contain any defects. Therefore, in this case Myers
breaches section 54 of the ACL (ACCC, n.d.).
Product- in this Sangita purchased electric toothbrush for her cousin Pooja because she is always
worried about her teeth. Pooja purchased the brush for $49.95. While purchasing the product,
online sales assistant assured Sangita that toothbrush are also operated with batteries. Later she
found that toothbrush is only operated with main power switch and with batteries.
Advice- Section 61 of the ACL provides guarantee related to the goods must be fit for specified
purpose. As per this section, if any person sells goods to the purchaser in lieu of trade or
commerce and such consumer before purchasing the product either expressly or by implication

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inform the seller about any particular purpose for which product is required then guarantee is
present that goods must be fit for that specified purpose. Clause 2 of this section states that if
requirements stated under clause 1 is fulfilled then there is implied guarantee that the goods must
be of such nature and quality that it meets the purpose specified by buyer. This can be
understood through case law Campbell v Lane (No 2) [2013] QCATA 307. In this case, Court
stated that horse was so lame that it was completely worthless for the cost, and fails to meet the
specific requirement of the consumer which was specified by the consumer before entering into
purchase. Court made order that refund must be given to the consumer that is amount paid by
consumer in full which was accompanied with the tribunal fee spend by consumer.
In the present case, Sangita specifically stated her requirement and this requirement are assured
from the Sangita before purchasing the product. Online assistant clearly stated that toothbrush is
operated with batteries also and on the basis of this statement Sangita purchased the toothbrush.
In this seller breach section 61 of the ACL because as stated by this section, if any person sells
goods to the purchaser in lieu of trade or commerce and such consumer before purchasing the
product either expressly or by implication inform the seller about any particular purpose for
which product is required then guarantee is present that goods must be fit for that specified
purpose. Therefore, in these goods does not match with the specified purpose (Miller, Taperell &
Worsman, 2010).
Remedies in breach of ACL:
In case it is possible to provide remedy for the breach and there is not any major failure, then
consumer has right to get remedy in the form of repair, replacement or refund. If it is not possible
to provide remedy for the breach then consumer can take actions against the supplier for
recovering the reasonable cost incurred from the failure, reject the supplied goods, and cancel the
contract of sale.
In case goods are rejected by the consumer then supplier is required to provide refund, and
consumer also has right to claim for any foreseeable loss occurred because termination of
contract. In case it is not possible to provide remedy for the breach or there is major failure on
part of seller then consumer has right to reject the goods and choose either option of refund or
replacement, cancel the contract and recover compensation for any reduction in the value.

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In this context, major failure includes:
 Goods and services are definitely not purchased by any reasonable consumer if they
know about the issue.
 Goods are completely different from the supply description, or sample or demonstration
model.
 Goods are not safe.
 If any other following situation occurred which is not possible to remedied easily within
reasonable period of time:
 Goods are not fit for the purpose for which they are supplied.
 Goods are not fit for the purpose specified by the customer before their purchase.
Product: rice cooker purchased by Sangita but at the time of delivery box of the cooker contains
electric fry pan.
Advice- this is the major failure because goods are completely different from the supply
description, or sample or demonstration model. Therefore, in this Sangita gets right to reject the
goods and choose either option of refund or replacement, cancel the contract and recover
compensation for any reduction in the value.
Product- Sangita purchased electric drill for her uncle and after using the drill for the first time
her uncle found that drill was hot and would not work.
Advice- in this case there is minor defects in the drill which provide remedy of repair,
replacement or refund.
Product- in this Sangita purchased electric toothbrush and while purchasing the product, online
sales assistant assured Sangita that toothbrush are also operated with batteries. Later she found
that toothbrush is only operated with main power switch and with batteries.
Advice- in this case, there is major failure because goods are not fit for the purpose specified by
the customer before their purchase. In this also, Sangita gets right to reject the goods and choose

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either option of refund or replacement, cancel the contract and recover compensation for any
reduction in the value.
Legal effect of receipts:
If receipts of the payments are available with the consumer then there is no need to show any
other proofs of payment made by purchaser to the seller, and purchaser gets the right to take
action on the seller on the basis of receipt of purchase. It must be noted that other proof is
required only when receipt of purchase is not available with the consumer (Barkeley law, n.d.).
Conclusion:
After considering the above facts, it can be said that Australian consumer law provides
protection to the consumers wither they purchased the product from shop or through online
mode. Various consumer guarantees are provided by the Australian Consumer Law, and these
guarantees are considered as the set of rules which mainly implemented on goods and services
purchased by customers in context of ACL. In other words, various situations are set out under
these rules in which consumer has right to take remedy from the seller.

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References:
ACCC. Consumer Guarantees. Available at: https://www.accc.gov.au/consumers/consumer-
rights-guarantees/consumer-guarantees. Accessed on 11th May 2018.
ACCC. Repair, replace, refund. Available at: https://www.accc.gov.au/consumers/consumer-
rights-guarantees/repair-replace-refund. Accessed on 11th May 2018.
ACL. Consumer Guarantees. Available at:
http://consumerlaw.gov.au/files/2015/09/consumer_guarantees_guide.pdf. Accessed on 11th
May 2018.
Alderman, P. Consumer guarantees under the ACL – some key changes. Available at:
https://www.lexology.com/library/detail.aspx?g=0f4421e5-527e-4e1b-9ab6-66871f00cec2.
Barkeley law. Receipts and proofs of payment. Available at:
https://www.law.berkeley.edu/business-services/getting-reimbursed/receipts-and-proofs-of-
payment/. Accessed on 11th May 2018.
Campbell v Lane (No 2) [2013] QCATA 307.
Competition and Consumer Act 2010- Section 3.
Competition and Consumer Act 2010- Section 54.
Competition and Consumer Act 2010- Section 56.
Competition and Consumer Act 2010- Section 61.
Miller, J. Taperell, G. & Worsman, M. (2010). Changes to Implied Terms under the Trade
Practices Act. Available at:
http://www.mondaq.com/australia/x/112964/Consumer+Law/Changes+to+Implied+Terms+und
er+the+Trade+Practices+Act. Accessed on 11th May 2018.
Norton v Hervey Motors Ltd [1996] DCR 427 (DC).

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