LAWS1100 Study Guide - Final Guide: Australian Consumer Law, Caveat Emptor, Consumer Protection
Australian Consumer Law
Why Protect Consumers?
• Consumers are entitled to additional protection under Australian law because when
dealing with a business they are usually at a disadvantage.
• Consumer Law addresses the fundamental imbalance in bargaining power between
business and consumers.
• The traditional rules of contract law offer little assistance to a consumer who is
disadvantaged because of the inequality of bargaining power: the general rule being
caveat emptor (let the buyer beware).
• Consumer protection legislation seeks to overcome many of the difficulties with the
oo la of isepesetatio ad poides ette eedies fo osues
whose contracts are induced by false statements or by misleading or deceptive
conduct.
In a nutshell:
1. Often an aggrieved party cannot hit all the tests that are required under contract
law;
2. Proving a breach of consumer law is often easier than proving a breach of contract;
3. Typically, there is also a broader range of remedies available under consumer law,
than is available under contract law.
Rationale
I osue tasatios, ufai patises ae idespead. The eistig la is still fouded
on the principle known as caveat emptor – eaig let the ue eae. The piiple
may have been appropriate for transactions conducted in village markets. It has ceased to
be appropriate as a general rule. Now the marketing of goods and services is conducted on
an organised basis and by trained business executives. The untrained consumer is no
match for the businessman, who attempts to persuade the consumer to buy goods or
services on terms and conditions suitable to the vendor. The consumer needs protection
the la ad this Bill ill poide suh potetio.
• Senator the Hon L K Murphy QC, Senate Parliamentary Debates, 30 July 1974
Consumer Protection Regulation
• The Australian Consumer Law (ACL) is a Schedule to the Statute: Competition and
Consumer Act 2010 (Cth).
• The ACL protects consumers by prohibiting, misleading or deceptive conduct
generally, unconscionable conduct, unfair terms and various specific forms of
prohibited conduct.
• The ACL is administered and enforced by the Australian Competition and Consumer
Commission (ACCC) and by the various State and Territory consumer protection
agencies.
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• S3 of the ACL states that a person is a consumer if they have acquired goods or
services:
– of a kind ordinarily acquired for personal, domestic or household use or
consumption; and
– that have not been acquired for the purpose of re-supply or for use in a
manufacturing process.
S18 – Misleading or Deceptive Conduct
Exam Note: s18 (ACL) is the old s52 of the Trade Practices Act (TPA).
Statute: Section 18 (1) of the ACL states: a perso ust ot, i trade or coerce, egage
in conduct that is misleading or deceptive or is likely to islead or deceive.
• Under s18, intention or fault is irrelevant (plaintiff need not show intention) and
liability cannot be avoided by use of a disclaimer.
Case Law: ACCC v Telstra (2007)
• The range of remedies provided by the ACL for breach of s18 is much wider than that
available at common law for misrepresentation or breach of contract – including
injunctions (s 232), damages (s 236) and compensatory orders under ACL Ch5.
S18 – Who can bring a claim?
• Section 18 is not limited to consumer transactions or the supply or possible supply
of goods or services.
• The words in s18 do not restrict who can bring an action.
• s18 can be relied upon not only by consumers but also by members of the public,
lobby and public interest groups, other businesses and competitors.
• In fact, competitors are the most frequent people to bring a s18 claim.
Case Law: Gillette v Energiser (2002)
S18 – Requirements
‘euieet : A peso ust ot
• Can either be a person, an incorporated body or an unincorporated business entity
‘euieet : Tade o Coee
• Within Australia or between Australia and places outside Australia – includes any
business or professional activity.
• Tade ad Coee ae odia tes hih desie all the utual
communing, the negotiations verbal and by correspondence, the bargain, the
transport, and the delivery which comprised commercial arrangements.
Case Law: Re Ku-Ring-Gai Co-operative Building Society (1978).
• Conduct taking place in non-commercial context will not occur within trade or
commerce.
Case Law: Concrete Constructions v Nelson (1990).
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