The Law Handbook 2024

Chapter 7.3: Consumer guarantees 705 Goods The ACL (s 2) defines ‘goods’ broadly. It expressly includes second-hand goods, computer software, animals, gas and electricity and component parts. Consumer guarantees apply to new goods, second- hand goods and ‘seconds’. Services The ACL (s 2) defines ‘services’ broadly to include any rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce. This definition covers most contracts for the supply of services to consumers, including professional services (e.g. legal or accounting services). However, the consumer guarantees do not apply to: • professional services by qualified architects or engineers (s 61(4)); • services relating to the transportation or storage of goods for a business or contracts of insurance (s 63); • financial services, which are regulated under the ASIC Act and the Corporations Act 2001 (Cth). However, the ACL does apply to ‘linked credit’, as discussed below. Consumer A person acquires goods and/or services as a ‘consumer’ if: • the amount payable for the goods or services is less than $100 000 (from 1 July 2021) (less than $40 000 before that date); • the goods or services were of a kind ordinarily acquired for personal, domestic or household use or consumption; or • the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads (s 3(1) ACL). Therefore, even goods acquired by a business may be covered if they cost less than $100 000. However, a person is not a consumer if they acquired goods: • for the purpose of re-supply; or • for the purpose of using them up or transforming them in a process of production, manufacture, or repair (s 3(2) ACL). If it is alleged that a person is a consumer in any proceeding, then it is presumed they are a consumer unless the contrary is established (s 3(10) ACL). Supplier In relation to goods, ‘supply’ (this includes re- supply) includes selling, exchanging, leasing, hiring and purchasing by hire-purchase. In relation to services, ‘supply’ includes providing, granting and conferring. The terms ‘supplier’ and ‘supplied’ have corresponding meanings (s 2(1) ACL). Manufacturer A person is the ‘manufacturer’ of the particular goods in question if they: • actually manufactured the goods – to manufacture includes to grow, extract, produce, process and/or to assemble; • claim to be the manufacturer of the goods; • permit someone else to claim they are the manufacturer of the goods; • permit their business name or one of its brand names to be applied to the goods (e.g. printed on a wrapper or woven on a label); or • imported the goods if the actual manufacturer does not have an office in Australia (s 7(1) ACL). Trade or commerce A number of the ACL’s consumer guarantees only apply when goods are supplied ‘in trade or commerce’. Generally, this means that the supplier must be carrying on a business of supplying goods and services. Therefore, the consumer guarantees do not cover goods or services sold as one-offs by individuals because these are not done in trade or commerce. The guarantees relating to title, undisturbed possession, and undisclosed securities apply whether or not the goods are sold in trade or commerce. Goods bought at auction Many of the consumer guarantees do not apply to goods bought at an auction where the auctioneer is an agent of the seller. The only consumer guarantees that apply to goods bought at a traditional auction are the guarantees relating to title, undisturbed possession and undisclosed securities. Online auctions may be covered by the consumer guarantees if the website does not act as an agent of the seller. Check the terms and conditions, and seek legal advice before an auction.