Legal Analysis: Charlie's Contractual Disputes with EnviroPro and Aqua

This case study analyzes two legal claims initiated by Charlie against EnviroPro Pty Ltd and Clean Aqua Pty Ltd. The first claim addresses a breach of contract against EnviroPro, focusing on the Sale of Goods Act (Vic) and the exclusion of liability clause displayed by the company. The analysis considers whether the product, Clean Aqua, was fit for its intended purpose as drinking water, as assured by the salesperson, and the subsequent damages Charlie suffered. The second claim examines the potential for strict manufacturer liability under the Australian Consumer Law (ACL) against Clean Aqua, considering the company's responsibility to provide goods fit for purpose and compliant with descriptions. The analysis evaluates whether Clean Aqua breached statutory guarantees and if Charlie can successfully sue the company for damages due to the product's unsuitability for drinking and its impact on his health and ability to work.

1. Discuss whether Charlie has a good case against EnviroPro Pty?
Issue: In this question, the issue is if Charlie has a claim against EnviroPro Pty Ltd. in view of
the general rules of contract law, including the Sale of Goods Act (Vic). This issue arises due to
the fact that a large sign was present at the gate of the company according to which the liability
of EnviroPro Pty Ltd. has been excluded regarding any damages suffered by the consumers apart
from the replacement of the goods if it has been proved that the goods were faulty when they
were sold.
Rule: It needs to be noted that the Sale of Goods Act (Vic), applies only in cases of sale of
goods. Moreover, a distinction is made by this legislation regarding the consumer and non-
consumer contracts. Therefore, when a consumer contract is involved, according to this
legislation the terms similar to the terms that can be implied under the Trade Practices Act are
also applicable to such contracts (Trade Practices Commission v Radio World Pty Ltd., 1989).
The provisions of this legislation apply only to the contracts that are found in Victoria. However,
other states also have similar legislation applying research contracts. The Sale of Goods Act
defines a consumer contract. According to this provision, any contract for sale of goods worth
less than $20,000 or when the contract deals with the goods that are generally sold for personal,
domestic or household purposes. On the other hand, when the goods were not sold for being
resold or used as input in the process of manufacture, it is also a consumer contract. In this way,
certain terms can be implied under the Sale of Goods Act regarding the consumer contracts.
Among these terms, there is a term according to which the goods sold by the traders should
match the description, particularly when the sale is by description. These implied terms are

present in the contract for sale of goods. In cases where the consumer has expressly or impliedly
told reseller, the purpose for purchasing the goods. In the same way, these terms can be implied
when the circumstances are of the nature that the seller is aware of or should have been aware of
the fact that the consumer depends on the skill or judgment of the trader. It has been mentioned
in section 20 of this legislation that an implied condition is applicable according to which the
goods sold should be fit for purpose in such a case. It is worth mentioning that the requirement of
the goods being fit for purpose overlaps with another implied condition according to which the
goods should be of merchantable quality. In Griffiths v Peter Conway , the court has expressed
the opinion that the buyer needs to tell the particular purpose for purchasing the goods.
Application: Enviro Pty Ltd. had placed a large sign at the gate. It has been mentioned in this
note is that the company cannot be held liable for any damages apart from replacing the goods,
that too, in cases where the goods were quality at the time of sale. On the other hand, Charlie had
informed the salesperson that he was looking for a good source of drinking water and asked if
Clean Aqua was a good product for this purpose. The salesman gave an assurance to Charlie that
Clean Aqua was a good product for this purpose. On the other hand, in reality, the water
produced by this device was not fit for drinking. After consuming the water for some time,
Charlie falls sick. As a result of these illness, he is forced to quit work for five weeks. He also
develops irritable bowels syndrome, which will have any effect on his quality of life for long-
term. Consequently, it can be said in this case that a breach of contract has taken place.
Conclusion: in view of the above-mentioned reasons, it is clear that Charlie can sue Enviro Pty
Ltd in the waters with the general rules of contract law and the provisions of Sale of Goods Act
(Vic).

2. Discuss whether Charlie has a good case against Clean Aqua Pty Ltd under the strict
manufacturer liability in the ACL
Issue: The question that needs to be decided here is to see if a claim can be initiated by Charlie
against Clean Aqua Pty Ltd. Charlie had to suffer injuries and it has to be seen if the company
can be held liable under the strict laibility that has been imposed on manufacturers by the
Australian Consumer Law.
Rule: The Australian Consumer Law is a part of competition and consumer Act, 2010.
According to this legislation, it is the responsibility of the manufacturers to treat the consumers
fairly. On the other hand, if it is found that a particular manufacturer or supplier has breached a
statutory guarantee provided to the consumers by the ACL, such manufacturer is liable for a
strict liability offense. In view of the strict liability of the manufacturers, a breach is possible
even in the absence of any negligence by the manufacturers. The consumer guarantees are a part
of strict liability offense, which have been introduced for the purpose of making sure that the
manufacturers always considered the expectations of the consumers also.
In this regard, usually the strict liability provisions of ACL are applicable for manufacturers who
have supplied goods in trade or commerce (Haros v Linfox Australia Pty Ltd., 2012). The ACL
provides that in such cases, the manufacturer can be described as the company importing the
goods, assembling the goods or the company that has used its brand name of the company that
was promoted as the manufacturer (Keays v J P Morgan Administrative Services Australia Ltd.,
2011). It can be considered that a safety defect is present in case of particular goods if the safety

level of the goods is not up to the mark that can be generally expected. Although the level of
safety that is expected from particular goods can vary in different cases, ultimately, the court as
the responsibility of deciding if a safety defect was present in the goods or not.
Application: As a result of the legal rules mentioned above, the strict liability provisions of ACL
required that there can be a breach of these provisions even in cases where the manufacturer was
not negligent at all. Due to this reason, in the present case, also Clean Aqua Pty Ltd can be held
liable for breaching the statutory guarantees mentioned in the ACL. Are these grounds, Charlie
can bring a claim against the company regarding the damages that were suffered by him due to
this breach.
The statutory guarantees of ACL also include the guarantee according to which the goods should
be fit for purpose. Similarly the goods should also comply with description. For example, in this
case, Charlie wanted a product produced drinking water from waste water. On the other hand, the
water of Clean Aqua was not fit to be used for drinking. Guess what could only be used for
gardening, swimming pools etc. Therefore, it is clear that this territory guarantee has been
breached in this case. Consequently, a claim can be initiated by Charlie against Clean Aqua Pty
Ltd.
Conclusion: Charlie has a strong case to sue Clean Aqua Pty Ltd due to the breach of strict
liability provisions mentioned in the ACL.

References
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 Schedule 2 Australian Competition and Consumer Act 2010
Sale of Goods Act (Victoria) 1958