Principles of Business Law Consumer Guarantees 2024 PDF

Principles of Business Law Semester 2 2024 TOPIC 9: CONSUMER LAW CONSUMER GUARANTEES Consumer Guarantees regime: Overview  The consumer guarantee regime protects consumers by guaranteeing the basic quality of goods and services.  These rights exist in addition to any express co...

Principles of Business Law Semester 2 2024 TOPIC 9: CONSUMER LAW CONSUMER GUARANTEES Consumer Guarantees regime: Overview  The consumer guarantee regime protects consumers by guaranteeing the basic quality of goods and services.  These rights exist in addition to any express contractual warranty offered by the supplier.  These rights are mandatory and cannot be excluded: s 64 ACL NOTE: we only consider the guarantees that apply to goods. Consumer Guarantees regime v Terms implied under the Goods Act Consumer guarantees regime  creates statutory rights  these rights are mandatory and cannot be excluded: s 64 ACL Goods Act 1958 (Vic)  implies terms into contracts  rights are therefore contractual, not statutory  rights can be excluded: s 61 Goods Act 1958 (Vic) Consumer guarantees: Threshold issues The consumer guarantees we consider only apply where:  Goods are supplied ‘in trade or commerce’  See Concrete Constructions v Nelson (module 9.2)  Goods are supplied to a ‘consumer’  ‘consumer’ is defined in s 3 ACL  Goods are not supplied by way of auction  ‘sale by auction’ is defined in s 2 ACL Trade or Commerce: Recall Concrete Constructions v Nelson Conduct occurs in trade or commerce when it involves an aspect or element of activities or transactions which, in nature, bear a trading or commercial character: Concrete Constructions v Nelson  How to assess if a supply of goods is to a ‘consumer’ Consumer  Consider the price and nature of the goods guarantees: purchased.  Goods are acquired by a consumer when the price of goods is not more than $100,000; or Supply to a  If the price is $100,000 or above, a person only acquires consumer the goods as a consumer if: (Goods)  the goods are of a kind that are ordinarily acquired for personal, domestic or household use; or  the goods are a vehicle or trailer acquired for use s 3 ACL principally in the transport of goods on public roads  Then, consider the purpose of purchase.  A person does not acquire goods as a consumer, whatever they pay for them and whatever the nature of the goods, if the goods are acquired for the purposes of re-supply or being used up in trade or commerce. Consumer guarantees: Sale by auction s 2 ACL Sale by auction means ‘a sale by auction that is conducted by an agent’. Consumer guarantees: s 54: guarantee as to acceptable quality If:  a person supplies;  in trade or commerce;  goods to a consumer; and  the supply does not occur by way of sale by auction, there is a guarantee that the goods are of acceptable quality. Consumer guarantees: s 54: guarantee as to acceptable quality (ctd) 54(2) Goods are of an acceptable quality if they are:  fit for all the purposes for which goods of that kind are commonly supplied; and  acceptable in appearance and finish; and  free from defects; and  safe; and  durable. Consumer guarantees: s 55(1): guarantee as to fitness for purpose If:  a person supplies;  in trade or commerce;  goods to a consumer; and  the supply does not occur by way of sale by auction. there is a guarantee that the goods are:  reasonably fit for any disclosed purpose; and  reasonably fit for any purpose for which the supplier represents that they will achieve unless  the consumer did not rely on, or it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. Section 55(2): Disclosed purpose A disclosed purpose is a particular purpose (whether or not that purpose is a purpose for which the goods are commonly supplied) for which the goods are being acquired by the consumer that the consumer makes known, expressly or by implication. Consumer guarantees: s 56: supply of goods by description If:  a person supplies;  in trade or commerce;  goods by description;  to a consumer; and  the supply does not occur by way of sale by auction, there is a guarantee that the goods correspond with the description. Consumer guarantees: s 56: supply of goods by description (ctd) Section 56(2) A supply of goods is not prevented from being a supply by description only because, having been exposed for sale or hire, they are selected by the consumer. Consumer guarantees: s 57: sample or demonstration model If:  a person supplies;  in trade or commerce;  goods by reference to a sample or demonstration model;  to a consumer; and  the supply does not occur by way of sale by auction there is a guarantee that the goods:  will correspond with the sample or demonstration model in quality, state or condition; and  that the goods are free from defect that would not be apparent on a reasonable inspection of the sample or demonstration model.  If: Consumer  a person supplies; guarantees:  in trade or commerce; s 58: goods  goods to a consumer; and  the supply does not occur by way of sale – by auction there is a guarantee that the manufacturer Guarantee as will take reasonable steps to ensure repair to repairs and facilities and spare parts are reasonably available for a reasonable period after the spare parts goods are supplied. Consumer guarantees: Minor failures  Minor failures are those that can be fixed or resolved in a reasonable amount of time.  Where there has been a minor failure, the seller can choose to offer:  a refund;  a replacement; or  a repair.  One of the above must be offered:  free of charge; and  within a reasonable period of time. CONSUMER GURANTEES: MAJOR FAILURES  Major failures cannot be fixed at all or within a reasonable period of time.  The consumer can choose to:  return the product and ask for a refund; or  return the product and ask for a replacement; or  keep the product and ask for compensation in the drop in value caused by the non-compliance with the consumer guarantee.