Analyzing Consumer Law: Product Liability and Negligence - LST5CCL

This case study delves into three distinct legal issues arising from a food contamination incident involving Melons R'Us. The first issue concerns Jocelyn, a pregnant mother who fell ill after consuming melon purchased directly from the shop. The analysis focuses on whether Jocelyn can claim compensation under the statutory consumer guarantees outlined in Part 3-2 of the Australian Consumer Law (ACL), particularly Section 54 regarding acceptable quality and Section 271(1) concerning manufacturer liability. The application of these laws suggests Melons R'Us breached Section 54, making them liable for Jocelyn's medical expenses, childcare costs, and lost productivity. The second issue addresses Arjun, who contracted listeriosis after eating melon from Yummy Bakers. This section examines strict manufacturer liability under Part 3-5 of the ACL, arguing that Melons R'Us, as the manufacturer, is directly liable to Arjun for supplying unsafe goods. The analysis references Donoghue v. Stevenson to highlight the manufacturer's responsibility to the ultimate consumer. Finally, the case study assesses the legal officer's failure to meet statutory and general duties imposed by the Corporations Act 2001 and common law, specifically the duty to act with care and diligence as per Section 180, potentially leading to legal risks such as the tort of negligence. Desklib offers similar solved assignments and past papers for students.

Running Head: Consumer law 1
Consumer Law
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Consumer law 2
Answer 1
Issue:
In the present case, Jocelyn purchased melon directly from the Melons R’Us shop in Victoria, as
she is the mother of three children’s and she is pregnant with her fourth child. After consuming
melon she fell ill because of the listeria bacteria. In this case the main issue is whether Jocelyn is
able to get assistance/ financial compensation in context of statutory consumer guarantees stated
under Part 3-2 Australian Consumer Law (ACL) and the associated remedies with this?
Law:
Section 54 of the Australian Consumer law stated that if any person supplies, in trade or
commerce, goods to the consumer then there is a statutory consumer guarantee that goods must
be of acceptable quality.
Clause 2 of this section states that goods must be of acceptable quality if they are fit for all the
purposes for which goods are purchased by the consumers. This clause further stated that goods
must be must be acceptable in context of appearance and finish, free from defects, safe, and
durable. This can be understood through case law Samaan bht Samaan v Kentucky Fried
Chicken Pty Ltd [2012] NSWSC 381.
Section 271(1) of the ACL stated, if manufacturer of the product or service fails to comply
with the guarantee then affected person has right to recover the damages from the manufacturer.
Under the ACL, person who is affected have number of remedies against both supplier and
manufacturer of the product in case goods or service supplied by them fails to comply with the
consumer guarantees. Person who is affected include not only the consumer who purchased the
goods but also include person who acquire goods from consumer, and also the person who
derives title of the goods through or under the consumer. Available remedy only depends on the
fact which guarantee has been breached, which means whether the action is brought against the
supplier and the nature of the breach.
Customers can seek compensation for damages and losses they have suffered because of the
problem with product or service. Additionally, customer has right to recover those losses which
mainly result from failure to meet the guarantee.
Damage claimed by the consumer includes cost incurred by the consumer because of the
problem with the product or service. This cost is generally financial in nature, such as cost

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incurred in treatment, and handling other issues which cause because of the product failure.
Damages also include the cost related to the lost time and productivity.
Application:
In the present case, Jocelyn purchased the melons directly from the shop in victoria and she is
the mother of three children, and she is also pregnant. She is hospitalized because of this virus
but both her prognosis for her and the unborn child are good. She is worried about the bills of
the hospitals child care for her kids.
In this case, Company breach section 54 of the ACL because goods send by them is unsafe for
consumers and they failed to meet statutory consumer guarantees. Therefore, they are liable
towards the Jocelyn.
Jocelyn can seek compensation for damages and losses she has suffered because of the problem
with melons. Additionally, she has right to recover those losses which mainly result from failure
to meet the guarantee.
In this Company is also liable to pay damages and damages include cost incurred by the
consumer that is cost of melon, hospital bills, and cost for her child care. Damages also include
the cost related to the lost time and productivity.
Conclusion:
Jocelyn can seek both compensation and damages from the manufacturer of the product.

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Answer 2
Issue:
In the present case, Arjun purchased melon from yummy bakers, and after consuming melons he
is suffering from listerious bacteria. Whether Arjun is able to get assistance/ financial
compensation in context of strict manufacturer liability stated under Part 3-5 of the Australian
Consumer Law (ACL) and the associated remedies with this?
Law:
Under part 3-5 of the Australian consumer law states that manufacturers of the product are
directly liable to the consumers in following situations:’
 Goods which fail to correspond with the description provided by manufacturer.
 In case quality of the goods supplied by manufacturer are not acceptable.
 Those goods which are not confirmed to sample provided by the manufacturer.
 Goods failed to fit for the purpose stated by the consumer.
 Goods which do not complied with the express warranties.
The operations of these statutory warranties and guarantees are mainly restricted to claims of
consumers who bear loss and damage because of the consumption of the goods supplied by
manufacturer (ACCC, 2018). Under the ACL, manufacturer of the product will be strictly held
liable directly towards the consumers for injury suffered by the person because of the defective
product. Goods are considered as defective when safety provided by the product did not meet
the expectations of the person. This can be understood through case law Donoghue v.
Stevenson. In this case, Court stated that manufacturer of the product is directly liable for the
particular losses caused by the defective goods. This case is the perfect example of creating the
liability for the manufacturer in negligence to a consumer with whom such manufacturer has no
privity of contract. Judge stated that manufacturer manufactured the product to reach them to
ultimate consumer and this intention of the manufacturer made him liable towards the quality of
the product.
Application:

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In the present case, company manufactured the melons with the intention to reach those melons
to the ultimate consumer and this make them liable under part 3-5 of the ACL in context of
strict liability of manufacturer. Part 3-5 of the Australian consumer law states that
manufacturers of the product are directly liable to the consumers in case quality of the goods
supplied by manufacturer are not acceptable. In this case also, melons supplied by company are
not safe for consumers and this results in breach of section 54 of the ACL also. Manufacturer of
the melons will be strictly held liable directly towards the Arjun for injury suffered by the Arjun
because of the defective product. Goods are considered as defective when safety provided by
the product did not meet the expectations of the person. Arjun can seek compensation and
damages under part 3-5 of the ACL from the manufacturers of the melons.
Conclusion:
Therefore, Arjun can seek compensation and damages under part 3-5 of the ACL from the
manufacturers of the melons on the basis of the above stated facts. In other words, Arjun can
prove that he suffers harm, and manufacturer of the melon is liable under strict manufacturer
liability.

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Answer 3
As the legal officer of the company he fails to meet the statutory and general duties imposed on
him by the Corporations Act 2001 and common law. As per these general duties and section
Corporation Act 2001, person meet with following duties and these two legal risks can be
occurred:
 Duty to act with care and due diligence which means officer of the company is under
obligation act with due care and diligence while conducting the operations of the
company. Section 180 defines the provisions of this breach and if officer is liable under
negligence and fails to perform his duty with due care then he breaches this provision of
the Act.
 Another legal risk which can be faced by officer is the tort of negligence, because
officers fail to fulfill their duty with care.