Australian Consumer Law Case Study: Chong v. Jason - Legal Analysis

This assignment presents a case study concerning a dispute between Chong and Jason, focusing on the application of the Australian Consumer Law (ACL). The case revolves around Chong's purchase of a truck for his construction business from Jason. The analysis addresses several key issues, including whether Chong qualifies as a consumer under the ACL, Jason's liability for misleading conduct by advertising used trucks as new and failing to disclose defects, the legality of a waiver clause in the agreement, and whether Jason can claim Chong waived his protections. The assignment meticulously applies relevant sections of the ACL, such as those related to consumer guarantees, deceptive conduct, and unfair contract terms, to determine Jason's breaches and potential liabilities. The conclusion is that Jason is liable for several breaches of the ACL, including misleading conduct and incorporating unfair terms in the contract, thus denying Chong his rights under the statutory guarantees. The assignment provides legal references to support the analysis.

Running head: BUSINESS AND CORPORATE LAW
Business and Corporate Law
Name of the Student
Name of the University
Author Note

1BUSINESS AND CORPORATE LAW
Table of Contents
Issue (a)............................................................................................................................................3
Rule..................................................................................................................................................3
Application......................................................................................................................................3
Conclusion.......................................................................................................................................3
Issue (b)...........................................................................................................................................4
Rule..................................................................................................................................................4
Application......................................................................................................................................4
Conclusion.......................................................................................................................................4
Issue (c)............................................................................................................................................5
Rule..................................................................................................................................................5
Application......................................................................................................................................5
Conclusion.......................................................................................................................................5
Issue (d)...........................................................................................................................................6
Rule..................................................................................................................................................6
Application......................................................................................................................................6
Conclusion.......................................................................................................................................6
Issue (e)............................................................................................................................................6
Rule..................................................................................................................................................7
Application......................................................................................................................................7

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Conclusion.......................................................................................................................................7
Reference List..................................................................................................................................8

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Issue (a)
Is Chong a consumer under the Australian Consumer Law?
Rule
According to section 3 of the Australian Consumer Law, a consumer is defined as a
person who purchases goods that cost of which must not exceed $40000. If the goods exceeds
over $40000 and such goods are obtained for personal, household or domestic purpose or for
consumption, the person shall be considered as consumers (Twigg-Flesner 2017). If a person
purchases the goods which includes a road trailer or a vehicle for transportation of goods on
public roads, such person shall be considered as a consumer under section 3 of the Australian
Consumer Law (ACL).
Application
In the given case, Chong purchased the truck from Jason that was priced at $55000 for
his construction business. As defined under section 3 of the Australian consumer law, any person
who purchases goods over $40000 and such goods include any vehicle or trailer used for
transportation of goods on public roads, the purchaser shall be considered as consumer under the
Australian Consumer law.
Chong purchased the truck for his construction business and it is obvious that the truck
shall be used for transporting goods related to his construction business on public roads, hence he
shall be considered as a consumer under section 3 of the ACL.

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Conclusion
Chong is a consumer under the Australian Consumer Law.
Issue (b)
Is Jason liable for a breach under ACL for advertising used truck as brand new?
Rule
The Australian Consumer law prohibits any person from engaging in deceptive or
misleading conduct and it unlawful for any business to make false statements that are deceptive
or misleading in nature (Brody and Temple 2016). If the seller fails to disclose any relevant
information related to the purchased goods or services, it shall also amount to misleading or
deceptive conduct under section 18 of the ACL as was observed in Trade Practices Commission
v Radio World Pty Ltd [1989]16 IPR 407. A conduct is determined as misleading or deceptive
based on the fact that the impression created by such conduct is inaccurate or false ( Twigg-
Flesner 2017).
Application
Jason advertised the used trucks as the new trucks, which creates an impression on the
consumers that the trucks are new. This amounts to deceptive or misleading conduct on part of
Jason. Further, while selling the truck to Chong, Jason stated that it has no mechanical fault,
despite his knowledge that the truck has oil leaks. The non-disclosure of information that is
relevant to the good or services sold also amounts to a misleading and deceptive conduct.

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Conclusion
Jason is liable for infringing section 18 of the ACL for engaging into a misleading or
deceptive conduct.
Issue (c)
Is Jason liable for infringing ACL on inclusion of the waiver in the agreement?
Rule
According to section, 64 A Schedules 2 of the ACL the conditions, warranties implied,
the remedies, and the rights stipulated under the Australian Consumer Law cannot be excluded.
The ACl guarantees the consumers that the goods obtained must be of acceptable quality and
match with the description made by the seller. The manufacturer must comply with the express
warranty made with respect to the goods such as quality, performance, condition of the goods.
These guarantees cannot be excluded from the consumer transactions otherwise, it would amount
to a breach of the ACL (Corones 2014).
Application
Chong is a consumer under section 3 of the ACL; therefore, he is entitled to the
consumer guarantees that are stipulated under the Australian Consumer law. Under the statutory
guarantees, the consumers are protected if there is a defect in the goods or the goods do not
match with the description stated by the seller at the time of purchase. However, Jason did not
inform about the waiver to Chong and took advantage of the fact that Chong did not understand
English, and included the exclusion clause in the contract.

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Conclusion
Jason committed a breach of section 64 A Schedules 2 of the ACL by including a waiver
of the protection that Chong was entitled to under the statutory guarantees.
Issue (d)
Can Jason claim that Chong has waived his protection under the statutory guarantees at the time
of signing the agreement?
Rule
The ACL prohibits businesses from incorporating any unfair terms in a contract under
section 24 and 25 of the ACL that would cause detriment to the other party or is no reasonably
necessary to safeguard the legal interest of the party. Such term may cause significant imbalance
with respect to the rights and obligations of the parties to the contract (Daly and Scardamaglia
2017).
Application
Jason wrongly included a clause that disentitles Chong from the protection extended by
ACL taking advantage of the fact that Chong does not understand English. The term is
detrimental to Chong and was not necessary to safeguard his interest. Further, it creates a
substantial imbalance with respect to the rights and obligations of the parties as Chong becomes
disentitled from claiming a refund for the default in the truck.

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Conclusion
Jason cannot claim that Chong had waived his protection because Jason had wrongfully
included the clause taking advantage of Chong’s inability to understand English.
Issue (e)
Is Jason liable for breaching any other provisions of the Australian Consumer Law?
Rule
There are certain specific unfair practices in trade or commerce that is prohibited under
the Australian Consumer Law. Such trade practices include misleading or false representations
and causing harassments to the consumers under the Australian Consumer law. The consumers
are guaranteed with protection from any defect in the goods and have a right to refund or repair
the defected goods (Latimer 2016). The businesses are prohibited from incorporating any term
that is unfair or detrimental to the other party or creates imbalance between the rights and
obligations of the parties to the contract.
Application
Jason has committed a misleading or deceptive conduct by advertising used trucks as new
vehicles and by not disclosing about the defect in the truck to Chong. Apart from this, Jason has
committed a breach of section 24 that prohibits businesses from incorporating unfair terms in a
contract. Jason had wrongfully taken advantage of the Chong’s incapability of comprehending
English and incorporated a clause that waives the statutory guarantees stipulated under the
Australian Consumer Law, thus, engaging in unfair practice.

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Conclusion
Jason is liable for committing a breach of section 24 of the Australian Consumer Law.

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Reference List
Brody, G. and Temple, K., 2016. Unfair but not illegal: Are Australia's consumer protection laws
allowing predatory businesses to flourish?. Alternative Law Journal, 41(3), pp.169-173.
Competition and Consumer Act 2010.
Corones, S.G., 2014. Competition law in Australia. Thomson Reuters Australia, Limited.
Daly, A. and Scardamaglia, A., 2017. Profiling the Australian Google consumer: implications of
search engine practices for consumer law and policy. Journal of Consumer Policy, pp.1-22.
Howells, G. and Weatherill, S., 2017. Consumer protection law. Routledge.
Latimer, P., 2016. Protecting Consumers from Unfair Contract Terms: Australian Comparisons.
Trade Practices Commission v Radio World Pty Ltd [1989] 16 IPR 407
Twigg-Flesner, C., 2017. Consumer product guarantees. Routledge.