Legislation
Consumer protection laws cover different types of conduct:

  • unfair practices
  • consumer guarantees
  • unfair terms etc

The major national consumer protection legislation is now called the Commonwealth Australian Consumer Law which is contained in the Competition and Consumer Act 2010. The start date for this law is 1 January 2011.

Misleading conduct
It is illegal for traders to take part in misleading conduct in advertising or pre-contractual negotiations or following the purchase. For example:

  • statements that a product is less expensive than a comparable product when this is not true; and
  • guarantees of results that have not been proven;

Other Unfair Practices
The law also prohibits other unfair practices such as:

  • conduct that is unconscionable - issues to be considered include the relative bargaining positions of the consumer and trader, whether the consumer was able to understand any relevant documents, whether there were any unfair tactics used;
  • making false representations about the quality or standard of services;
  • making false or misleading representations about fees or charges;
  • conduct that misleads about the nature, the characteristics and the suitability of the services; and
  • physical force, undue harassment or coercion of a consumer resident in relation to payment of any fees or charges

Consumer guarantees
This law also creates guarantees into some consumer contracts. This is a statutory guarantee which is different to any guarantees that may be included in the contract.

Goods must be of acceptable quality and be fit for any disclosed purpose.

Acceptable quality - goods
Goods must be of ‘acceptable quality’. This means that they must be fit for the purpose that they are commonly supplied for, they are acceptable in appearance and finish; free from defects and are safe and durable.

Issues to be considered will include the nature and price of the goods and any statements made about the goods. 

Due care and skill - services
Services must be carried out with due care and skill, and accomplish the result that was agreed upon before the work started. 

Legal remedies
The new law sets out specific remedies available to the consumer where there is a breach of a statutory consumer guarantee. In essence, the law distinguishes between a major and minor failure. A consumer who believes that there has been a breach of guarantee should get legal advice to make sure that they frame their claim appropriately.

Unfair terms
A term of a standard form contract may be invalid if it is found to be unfair under the Australian Consumer Law. Standard from contract is defined – in simple terms it means a “take it or leave it” contract – eg a phone contract.

The law gives examples of what may be considered unfair. It includes:

  • a term that penalises one party ( not the other) for ending the contract;
  • a term that limits the right of another party to sue the other
  • a term that limits the evidence that one party can use in legal proceedings. etc

Last Updated – June 2012