Changes to the Australian Consumer Laws – Part 2 – Consumer Guarantees

A number of changes have been made to the Trade Practices Act 1974 (Cth) (TPA) as Australian Consumer Law (ACL) reforms have been progressively implemented, with the final portion commencing on 1 January 2011. In addition to these changes the TPA has been renamed the Competition and Consumer Act 2010 (Cth) (CCA).This is the thirdin a series of blogs summarising the changes and the implications for businesses operating in Australia.

Consumer guarantees

In relation to goods and services provided before 1 January 2011, the TPA still implies certain protection terms into consumer contracts for the supply of goods and services. The new ACL replaces the implied warranties and conditions regime in the TPA with a comprehensive set of statutory consumer guarantees and trader obligations for consumer goods and services. In effect, this aims to provide a higher degree of certainty as to consumer’s rights. The guarantees are as follows:

  • The supplier has a right to sell the goods (s51 ACL);
  • The consumer has a right to undisturbed possession of goods (s52 ACL);
  • Goods are free from undisclosed securities, charges or encumbrances (s53 ACL);
  • Goods are of an acceptable quality (s54 ACL);
  • Goods are reasonably fit for a disclosed purpose (s55 ACL);
  • Supplied goods correspond with their description (s56 ACL);
  • Where goods are sold by sample or demonstration that the goods comply with that sample of demonstrated model (s57 ACL);
  • The manufacturer of goods will ensure that facilities for repair of the goods are reasonably available (s58 ACL);
  • The manufacturer of goods will comply with express warranties (s59 ACL);
  • Services will be carried out with due care and skill (s60 ACL);
  • Service and related products will be reasonably fit for their identified purpose (s61 ACL); and
  • Services will be supplied within a reasonable time (s62 ACL).

 The key difference between the ACL and the TPA is now goods must be of ‘acceptable’, as opposed to ‘merchantable,’ quality. Acceptable qualityis defined in s54(2) of the ACL such that goods are of acceptable quality if they are:

  • Fit for all the purposes for which goods of that kind are commonly supplied;
  • Acceptable in appearance and finish;
  • Free from defects;
  • Safe; and
  • Durable.

This is subject to a ‘reasonable consumer’ test, such that goods are considered to meet those standards if a reasonable consumer, who is fully acquainted with the state and condition of the goods, would regard them as acceptable. 

with Max Ezerins