Group Case Study: Australian Consumer Law, Remedies, and Penalties

This case study analyzes a scenario involving Australian Consumer Law, focusing on the rights of a gift recipient (Betty) who received a defective bottle of wine. The analysis examines whether Betty, despite not directly purchasing the product, can exercise consumer rights under the Australian Consumer Law. The case study applies relevant sections of the Competition and Consumer Act 2010, specifically addressing consumer guarantees regarding acceptable quality and goods matching their description. It explores the remedies available to Betty, such as seeking a refund or replacement, and the potential penalties the manufacturing company might face. The analysis concludes with the remedies Betty is entitled to, including a refund and potential damages for any resulting ill health, based on breaches of consumer guarantees.

BUSINESS AND LEGAL ENVIRONMENT

INTRODUCTION
 The Australian Consumer Laws is comprised
in the Schedule 2 to the Competition and
Consumer Act 2010 (Austlii, 2019).
 The matters governing the rights of
consumers, the consumer guarantees,
remedies and penalties are stated therein.
 The law is applicable on Australian
manufacturers, suppliers and the importers.

ISSUE 1
 Whether the recipient of
the gifts have rights
against the suppliers?
 In the given case, Betty
receives a gift from her
son which she founds to
be defective and not as
per the mentioned
specifications.

RULE 1
 Section 266 of the act states the recipient
of gifts to exercise rights in same capacity
as consumers of direct purchase (Australian
Competition and Consumer Commission,
2019).
 Section 273 states the action against
manufacturer be taken within 3 years of
awareness of defect of the products.

APPLICATION 1
 As per Section 266, Betty can exercise the
rights though she did not purchased the wine
bottle directly.
 As per the Section 273, she must inform of the
defect goods to the company manufacturing in
writing.
 The action must be taken within 3 years of
knowledge of defect.

ISSUE 2
• What are the available
remedies to Betty and
penalties that may be
sustained by the company?
• In the given case, Betty has
not received the goods as per
the description and the
consumption has led to ill
health.

RULE 2
 Section 54 describe the consumer
guarantees that the goods must be
adhered to the acceptable quality
(Australian Government, 2018).
 The acceptable quality denotes free
from defects, durable to be consumed,
fit, durable in finish and safe.

RULE 2
 The consumer guarantee in the section
56 states that the goods must be as
per the description.
 The consumer guarantees are
applicable for the goods and services
costing less than $40,000.

RULE 2
 Section 236 provides damages for defective goods.
 Section 138 of the act makes the manufacturer
liable towards the consumer of the goods.
 Section 143 of the acts further states that the said
action must be commenced within 3 years of the
awareness of such a defect.
 Section 151 lays down maximum penalty of $
1000000 for the body corporates (Consumer Affairs
Victoria, 2019).

APPLICATION 2
 Consumer guarantees under section 54
and 56 have been breached as wine was
not of acceptable quality and verbal
description did not meet actual contents.
 Betty can seek damages under Section
236 by asking refund or replacement of
goods.

CONCLUSION 2
 Betty is entitled to refund from the
manufacturing company.
 Betty can seek damages for ill health as
well.

REFERENCES
 Austlii (2019). Competition and Consumer Act 2010 - Schedule 2. Retrieved
from: http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/
sch2.html#_Toc6928463
 Australian Competition and Consumer Commission. (2019). Consumer
Guarantees-A guide for consumers. Retrieved from:
http://www.afta.com.au/uploads/292/consumer-guarantees-a-guide-for-
consumers_0.pdf
 Australian Government (2018). Australian Consumer Law and your
business. Retrieved from: https://www.business.gov.au/products-and-
services/fair-trading/australian-consumer-law-and-your-business
 Consumer Affairs Victoria. (2019). Product safety and information
penalties. Retrieved from: https://www.consumer.vic.gov.au/products-and-
services/business-practices/penalties/penalties-australian-consumer-law-
competition-and-consumer-act-2010-schedule-2/penalties-product-safety-
and-information