Charlie's Claim Against EnviroPro: Contract and ACL Analysis

This case study analyzes a legal dispute involving Charlie, EnviroPro Pty Ltd, and Clean Aqua Pty Ltd. The analysis focuses on contract law principles, the Sale of Goods Act (Victoria), and the Australian Consumer Law (ACL). The primary issue revolves around whether Charlie can successfully claim damages against EnviroPro for supplying contaminated water, and Clean Aqua for strict liability. The analysis examines the exclusion clause, implied conditions, and consumer guarantees. The case considers the salesperson's assurances about the product's fitness for purpose and the resulting breach of contract. The document concludes that Charlie has grounds to sue both companies for breach of contract and statutory guarantees, referencing relevant case law and legislation, including David Jones v. Willis, Griffiths v Peter Conway Ltd, Haros v Linfox Australia Pty Ltd, Keays v J P Morgan Administrative Services Australia Limited, and Trade Practices Commission v Radio World Pty Ltd.

Issue: after analyzing the facts that are present in this question, it has to be seen if Charlie can
bring a claim against EnviroPro Pty Ltd. Apart from the general rules under the contract law, it
also needs to be seen if Charlie has a case under the Sale of Goods Act (Vic) against EnviroPro
Pty Ltd. . The reason that this issue is that EnviroPro Pty Ltd. has placed a large sign at the gate
in which it has been mentioned that the company cannot be held liable for any damages except
for the replacement of goods.
Rule: it is worth mentioning that the provisions of the Sale of Goods Act (Vic) and applicable
only in case of the contracts related to the sale of goods. According to this Act, there is a
difference between the consumer contract and non-consumer contracts. It has been provided by
this Act regarding consumer contracts that the terms that can be implied under the earlier Trade
Practices Act can also be applied in such contracts. The provisions of this Act are applicable only
to the contracts formed in the State of Victoria. Hence, this legislation provides that any contract
related with the sale of goods for less than $20,000 or when such contract deals with the goods
that are generally sold for domestic use or when these goods are not going to be resold or used in
the manufacture of other goods. The Act provides that there are certain terms that can be implied
in case of a consumer contract. Among these germs, there is a condition which requires that the
goods with my description, in case the sale is by description. Search terms can be considered as a
part of the contract (David Jones v. Willis, 1934). In case of a contract related with sale of goods
when the consumer has expressly or impliedly informed the seller of the purpose behind the
purchase of goods. These terms can also be implied in case of a contract where the circumstances
suggests that the seller was aware of or should have known regarding the fact that in order to

purchase the product, the buyer is relying on skill of the seller. In such cases, an implied
condition has been mentioned in section 20 of the Act which provides that the goods sold to the
consumer should be fit for purpose. In case the circumstances mentioned above are present. In
this context, it needs to be mentioned that the requirements related with the fitness for purpose
overlaps the merchantable quality implied condition (Trade Practices Commission v Radio
World Pty Ltd., 1989). The courts are also held that in such cases, the buyer should inform the
seller regarding the purpose of purchasing the goods (Griffiths v Peter Conway).
Application: it has to be considered in this case, if Charlie can bring a claim against Enviro Pty
Ltd. The company has placed a large sign which suits the liability of the company for any
damages suffered by the consumers accept the replacement of goods. In the present case, at the
time of purchasing Clean Aqua, Charlie had asked the salesperson of Enviro Pty Ltd. if Clean
Aqua was a fit product to produce drinking water. The salesperson gives an assurance that you
are that the network will be a fit product for this purpose. Hence, Charlie purchases Clean Aqua
and starts consuming the water produced by it. Very shortly, Charlie falls sick. He could not go
to work for nearly 5 weeks. Moreover, he also develops irritable bowel syndrome. Now his
quality of life will be adversely affected. Under the circumstances, it is clear that Enviro Pty Ltd
has been a breach of the implied condition. The company cannot be allowed to exclude its
liability by mentioning an exclusion clause.
Conclusion: in this case, Charlie can successfully sue Enviro Pty Ltd for the breach of contract
and also under sale of goods Act (Vic) for breaching the implied conditions.

Q 2
Clean Aqua Pty Ltd can be considered as liable for injuries suffered by Charlie in accordance
with the strict liability of manufacturers imposed by the ACL.
The Australian consumer law imposes an obligation on the manufacturers to deal fairly with the
consumers. If a manufacturer is found to have breached the consumer guarantees imposed by the
ACL, such manufacturer can be held liable for strict liability offense. According to the strict
liability imposed on the manufacturers, a breach may take place even if there is no negligence of
the manufacturer. Consumer guarantees fall under the purview of strict liability to ensure that the
manufacturers take care of the consumers’ expectations.
The strict liability provisions provided by ACL generally apply in case of the manufacturers,
supplying goods to the consumers in context of trade or commerce. A particular product can be
considered to have a safety defect if the product does not have the level of safety generally
expectable from such product (Haros v Linfox Australia Pty Ltd., 2012). Even if the level of
safety expected from various products varies in each case, the ultimate responsibility is to decide
if a particular product suffers from a safety defect.
The ACL provides in the strict liability provisions that manufacture can be held liable for the
breach even in cases where the manufacturer is not negligent at all. Therefore, in this case, Clean
Aqua Pty Ltd holds liability for the beach of statutory guarantees. Under these circumstances, it
can be said that Charlie can claim damages from Clean Aqua Pty Ltd. for the damages caused to
him owing to the beach of statutory guarantees (Keays v J P Morgan Administrative Services
Australia Ltd., 2011). Among the statutory guarantees, there is a guarantee, which requires that
the goods supplied by the manufacturers should be fit for purpose and difficult to comply with
description. Charlie had asked the salesperson if Clean Aqua can be used for drinking purposes.

While this was not the reality, the salesperson assured Charlie that this water will can be
consumed by Charlie. Hence, a breach of statutory guarantee has taken place. Therefore, a claim
can be initiated against Clean Aqua Pty Ltd
Clean Aqua Pty Ltd can be held responsible for breaching strict liability provisions mentioned in
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