Generally, the Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. guarantees only apply to the supply of goods and services to a consumer in ‘trade and commerce’. Remedies can be sought against the supplier and/or, in some cases, the manufacturer.
Therefore, it is necessary to define the terms ‘goods’, ‘services’, ‘consumer’, ‘supplier’, ‘manufacturer’ and ‘trade or commerce’.
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’.
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 Australian Securities and Investments Commission A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 2001 (Cth) and the Corporations Act 2001 (Cth). However, the ACL does apply to ‘linked credit’.
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 Claimed but not proved. For example, the police can allege in court that a car was stolen, but they then have to prove it with evidence. If you say a person did something illegal you are making an allegation. Unless you can back it up, you will not be able to win a court case about it. 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).
In relation to goods, ‘supply’ (including 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.
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. The guarantees relating to title, undisturbed (1) Having control over property. Possession is not the same as ownership. For example, a bicycle you have borrowed from a friend is in your possession but you do not own it. (2) Having illegal drugs on your person or property., 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 a traditional auction where the auctioneer is an A person who acts for someone else. They can make decisions, carry out tasks or make agreements for the other person. For example, if you ask someone to bid for you at an auction they will be acting as your 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.
Goods bought online or overseas
The consumer guarantees apply to goods bought from online businesses based in Australia. However, the guarantees may not apply to goods bought from overseas websites. It is important to check the terms and conditions of the An agreement that the law will enforce.. Even if they do apply, there may be practical difficulties in taking legal action and obtaining an effective remedy from an overseas-based seller.
‘No refunds’: Can guarantees be excluded or limited by contract?
A consumer’s rights under the consumer guarantees – that goods comply with their description, be of acceptable quality and are fit for their purpose – cannot be excluded from consumer contracts. A term of a contract is Having no legal effect. A void agreement has something wrong with it, so it cannot be a legally binding contract. For example, a verbal agreement to buy land would be void, because the law says those contracts have to be in writing. (i.e. not enforceable) if it claims to exclude the operation of the consumer guarantees or exclude Legal responsibility, enforced by civil or criminal courts. for a failure to comply with a consumer A binding promise made as reassurance that another person will carry out their legal obligations (e.g. paying a debt). The person making the promise is called a guarantor. If the person being guaranteed fails to pay, the guarantor becomes responsible for the debt. (s 64 ACL).
Signs, cash register receipts, websites, etc. that state ‘no refunds’ are misleading because they send the message that it is not possible to get a refund or other remedy even if there is a breach of a consumer guarantee. These notices try to stop consumers from claiming their Found in a statute of delegated legislation. For example, a statutory authority or body is aperson or organisation that has special powers given by parliament to do work for the public benefit. rights to the non-excludable consumer guarantees under the ACL.
Notices stating the following terms are unlawful:
• ‘no refund on sale items’;
• ‘exchange or A debt that does not have to be paid until some future time. Being allowed to pay later, in the future, for something you are getting now. note only for return of sale items’;
• ‘no refunds after 30 days’.
Similarly, insisting that a consumer return goods unopened or in the original packaging may be misleading as this is not a pre-condition to To make people obey a law or the terms of an agreement, using police powers or court orders. the consumer guarantees.
However, notices that state that ‘no refunds A document that sets out what a person wants to happen to their money and other property after they die. be given if you have simply changed your mind’ are acceptable because they do not try to negate the consumer guarantees.
Although, a term of a contract may limit a supplier’s liability to replace or repair faulty goods, or to pay to replace or repair the goods. However, this only applies if the goods are not ordinarily used for personal, domestic or household use or consumption (s 64A ACL). This means that any term in a contract that attempts to limit the remedies available for personal, domestic or household goods is void.
Also, displaying a ‘no refunds’ sign may be an A criminal act prohibited by state or commonwealth criminal law. An offence is either a summary offence (minor) or an indictable offence (serious). under section 29(1)(m) of the ACL because it makes a false or misleading representation concerning the effect of a condition, A promise in a contract. For example, a promise by a manufacturer that goods will be repaired or replaced if they turn out to be faulty. or guarantee.