Analysis of Contract and Consumer Law in Charlie's Legal Claims

This assignment presents a legal analysis of a case where Charlie seeks legal recourse against EnviroPro Pty Ltd and Clean Aqua Pty Ltd. The analysis focuses on the application of contract law principles, particularly the Sale of Goods Act (Victoria), and the Australian Consumer Law (ACL). The first part of the analysis examines whether Charlie can sue EnviroPro under general contract rules, considering a disclaimer posted by EnviroPro and the implied conditions of the Sale of Goods Act, specifically fitness for purpose. The second part evaluates Clean Aqua's liability under the ACL's strict manufacturer liability provisions, emphasizing consumer guarantees and the concept of a safety defect. The analysis considers the facts that Charlie purchased a water filtration system from EnviroPro, and the water produced was unfit for drinking, leading to illness and long-term health issues. The conclusion is that Charlie has a strong case against both companies based on breaches of contract and consumer guarantees.

Question 1.
Issue: In the present question, the issue arises if Charlie can sue EnviroPro Pty Ltd. under the
general contract rules which include the Sale of Goods Act, Victoria as a big sign has been
posted by EnviroPro Pty Ltd, which excludes their liability for any damages except the
replacement of goods that are proved to be faulty at the time of sale.
Rule: The Sale of Goods Act (Victoria) only applies to the sale of goods. In this legislation, a
distinction has been made between consumer and non-consumer contracts. In case of consumer
contents, this legislation provides that the terms that are similar to the terms that have been
implied by Trade Practices Act are applicable. This legislation is applicable only in case of the
contracts that have been made in Victoria. However there are similar legislations in place in
other States of Australia.
According to this legislation, a consumer contract has been described as a contract related with
the sale of goods that is less than $20,000 or is related with the sale of goods that are generally
acquired for domestic, personal on household use and when such words have not been purchased
for resale or to be used as inputs in manufacture. There are certain terms that are implied by the
Goods Act. These include a condition that the goods match the description, where there is a sale
by description. The terms can be implied in a contract for the sale of goods, where the purchaser
has expressly or impliedly made known to the seller regarding the purpose for which he or she is
purchasing the goods (Trade Practices Commission v Radio World Pty Ltd., 1989). Similarly, it
is also applicable when such circumstances are present under which the seller knows or should
have known that the buyer is relying on the skill or judgment of the seller. In this way, section 20

provides an implied condition that the goods sold by the seller will be fit for purpose under the
above-mentioned circumstances. The requirement regarding fitness for purpose overlaps with the
implied condition of merchantable quality (David Jones v Willis). Similarly, the court stated in
Griffiths v Peter Conway that the buyer should have revealed that particular purpose behind the
purchase to the seller.
Application: In the present case, there is a large sign present at the entrance of Enviro Pty Ltd,
which excludes the liability of the company for any damages except the replacement of the
goods that have been established as being faulty when we were sold. However in the present
case, Charlie had clearly told. The salesperson of the company that he wants to have his own
drinking water source added the product was good for this purpose. In this way, Charlie had
disclosed the purpose for the purchase of goods. The salesperson assured Charlie that it was a
good product. However, in reality, the water produced by Clean Aqua was not fit for drinking
purpose. Therefore after using this water for drinking and cooking purposes, Charlie falls sick
and he has to miss work for five weeks, and the answer develops irritable bowels syndrome due
to which his long-term quality of life will be affected. Hence in this case, there has been a breach
of condition which requires that the goods should be fit for purpose.
Conclusion: Under these circumstances, it can be included that Charlie has a good case against
EnviroPro Pty Ltd under the general rules of contract and also the Sale of Goods Act (Vic).

Question 2.
Issue: The issue in this question is if Clean Aqua Pty Ltd can be held liable for the injuries
suffered by Charlie under the strict manufacturer liability that has been provided in the
Australian Consumer Law.
Rule: According to the Australian Consumer Law, while conducting business, the manufacturers
should treat the consumers fairly. On the other hand, when it is found that a manufacturer or a
supplier of goods have breached any of the consumer guarantees mentioned in the Australian
consumer law, it can be considered as such manufacturer is liable for a strict liability offense.
The strict liability of the manufacturers provides that a breach can take place even without the
negligence of the manufacturer (Haros v Linfox Australia Pty Ltd., 2012). Consumer guarantees
have been made a straight liability offense in order to make sure that the manufacturers of the
supplies fulfill the expectations of the consumers.
The strict liability provisions of the ACL are generally applicable to the manufacturer, who has
supplied consumer goods in course of trade or commerce. In such cases, a manufacturer can be
described as the company that has made all assembled the goods, imported the goods, used its
brand name for the goods or allowed itself to be promoted in the public as the manufacturer.
Similarly, it can be said that a particular product has a safety defect if it got off the level of safety
that can be generally expected by the public (Keays v J P Morgan Administrative Services
Australia Ltd., 2011). Although the level of safety that may be expected by the public varies
from case to case, ultimately doesn't be decided by the court if a safety defect is present in case
of a product.

Application: As mentioned above, the strict liability provisions of the ACL provide that there
can be a breach of these provisions even if there is no negligence on the part of the manufacturer.
As a result, in the present case also, Clean Aqua can be held liable for the breach of the statutory
guarantees mentioned in the ACL. Hence, Charlie can bring a claim against Clean Aqua Pty Ltd
for the damages suffered by him due to the breach of statutory guarantees by the company.
The statutory guarantees mentioned in the ACL include the guarantee that the goods will be fit
for purpose and comply with description. In the present case,. Charlie had clearly told that he
wanted the product for producing drinking water. However, the water produced by Clean Aqua
was not fit for drinking purposes and this water can only be used for gardening, swimming pools
etc. Therefore in this case, there is a breach of statutory guarantee and as a result, Charlie can
bring a claim against Clean Aqua Pty Ltd.
Conclusion: Charlie has a good case against Clean Aqua Pty Ltd under the strict liability
provisions of the manufacturers provided by the ACL.

References
David Jones v. Willis (1934) 52 CLR
Griffiths v Peter Conway Ltd [1939] 1 All ER 685
Haros v Linfox Australia Pty Ltd (2012) 287 ALR 507
Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358
Trade Practices Commission v Radio World Pty Ltd (1989) 16 IPR 407
Legislation
Australian Consumer Law (ACL) Schedule 2 Australian Competition and Consumer Act 2010
Sale of Goods Act (Victoria) 1958