LAWS1120 Study Guide - Final Guide: Australian Consumer Law, Coles Supermarkets, Consumer Protection
Chapter 4 - Consumer Law
Competition and Consumer Act (CCA) 2010 purposes:
1. Protect consumers
2. Regulate restrictive trade practices
Australian Consumer Law (ACL)
is a part of CCA →
applied in all states and territories so
consumers in Australia have same rights and all businesses have the same obligations in all
transaction regardless of where they take place.
Consumer protection → consumers are often at a disadvantage compared with manufacturers
who have more resources, better informed about legal rights, obligations and regulations.
Misleading and Deceptive Conduct (MDC) of section 18(1) prohibited under ACL
- a person
must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to
mislead or deceive.
→ not based on contractual relationship, does not need to prove fault or intention to MDC,
avoids technical details of common law of misrepresentation (distinction between innocent and
fraudulent misrepresentation), there are wide-ranging remedies available to both victims of
misleading conduct and the regulator.
Meaning of “in trade or commerce” includes any business or professional activity (does not
include private sales by individuals.
Meaning of “misleading or deceptive” conduct - no precise definition of what misleading or
deceptive means but it has been accepted that it has a common sense meaning, which is the
conduct did, or is likely to “lead a person into error” or was “inconsistent with the truth”
Section 18 and marketing and advertising → Fertile field for section 18 disputes. While
advertisers are given latitude to enge in certain amount of puffery or hyperbole, the real
question is whether advertisement is liable to deceive an “ordinary and reasonable” consumer in
target audience.
No MCD
1. McWilliam’s Wines Pty Ltd v McDonald’s System of Australia pg 104
2. Parkdale Custom Built Furniture Pty Ltd c Puxu Pty Ltd pg 104
MCD
1. Apand Pty Ltd v The Kettle Chip Co Pty Ltd pg 105
2. Australian Competition and Consumer Commission v Coles Supermarket
Australia Pty Ltd pg 105
3. Australian Competition Consumer Commission v TPG Internet Pty Ltd pg 106
4. Australian Competition Consumer Commission v Turi Foods Pty Ltd pg 106
Elements of MDC:
1. Person (natural and legal person)
2. Trade or commerce (business related conduct )
3. Engage in conduct (words, actions silence, non action)
4. Misleading or deceptive or likely to mislead and deceive (lead to error/inconsistent
with truth)
Section 18 and pre-contractual negotiations → those who have been induced to enter into a
contract as a result of misrepresentations made during course of negotiations to obtain
damages on the ground that misrepresentations constituted misleading or deceptive conduct.
Bevanere Pty Ltd v Lubidineuse pg 107
Section 18 and statement of opinions or predictions
As per S4(1)
when a person makes a statement regarding future matters/or an opinion and they
do not have reasonable grounds for making that representation, the representation is taken to
be misleading
→ Defendant must prove that there were reasonable ground for making representation, then it
will not be misleading Rakic v Johns Lyng Insurance Building Solutions Pty Ltd pg 107
Section 18 and silence
As per S2(2),
silence can constitute MDC when:
a. Information provided is incomplete (either a half truth, where a statement is literally true
but is misleading when full story is told)
b. Circumstances change
c. Defendant remains silent where there is a reasonable expectation that disclosure will be
made
Henjo Investmenet Pty Ltd v Collins Marrickville pg 108
Demagogue Pty Ltd v Ramensky pg 108
Section 18 and disclaimers - as to truth/reliability of representation does not automatically
operate to limit/excuse representor’s liability. MDC provision cannot be excluded as term of
contract, it might taken into account if MD has occurred. The presence of a disclaimer clause
was one factor that persuaded the court that misleading conduct did not induce applicant to
enter the lease agreement.
Butcher v Lachlan Elder Realty Pty Ltd pg 109
Prohibition of Unconscionable Conduct
1. Section 20 (1) ACL -
Unconscionable conduct with the meaning of the unwritten law
a. A person must not, in trade or commerce, engage in conduct that is
unconscionable, within the meaning of the unwritten law from time to time.
2. Section 21 (1) ACL -
Unconscionable conduct prohibits a person from engaging with
goods or services
a. A person must not, in trade or commerce, in connection with a) supply or
possible supply of goods or services to a person, acquisition or possible
acquisition of goods and services from a person, engage in conduct that is, in all
circumstances, unconscionable
3. Section 22 (1) ACL -
Matters the court may have regard to for the purposes of s21
a. Factors the court may have regard to in determining whether there has been
unconscionable conduct by a supplier of good and services in the connection
with the supply of good and services
Australian Competition and Consumer Commission v Lux Distributors Pty Ltd pg 110
Remedies for contravention - fines and other civil remedies (injunction or damages for loss
suffered) may be sought for contravention of unconscionable conduct provisions.
Unfair contract terms - prohibited under ACL S23,
such terms will be void, contract will not be
void if can operate without the unfair terms.
→ Amendment of ACL operates from Nov 2016 will protect small business from unfair terms in
standard form contracts. Law will apply to a standard form contract where:
a. It is for the supply of goods or services or the sale or grant of an interest in land
b. At least one of parties is a small business (employs less than 20 people, including casual
employees)
c. Price payable under the contract is no more than $300,000 or $1 million if the contract is
for more than 12 months.
Meaning of unfair → A term is unfair if it would cause a significant imbalance in parties’ rights
and obligations, not reasonably necessary to protect the legitimate interests of advantaged party
and would cause detriment to a party if it was applied.
→ Determining unfairness - court must take into account the transparency of term and contract
as a whole. Transparent term is expressed in reasonably plain language, legible, presented
clearly and readily available to the affected party. (examples in pg 111) as per Australian
Competition and Consumer Commission v NRM Corporation Ltd pg 112
Specific False representation provisions → ACL contains provisions designed to protect
consumers against false representations made by a person in connection with promotion and
supply of goods, services and land. Contravention of these provisions give rise to civil remedies
for loss suffered and prosecution for an offence rendering offender liable to a fine.
1. Goods and services: 29(1) of ACL pg 113 as per Australian Competition and
Consumer Commission v Dell Computer Pty Ltd
The penalty for misleading conduct in relation to services is $1,100,000 for corporations
or $220,000 for other parties as per ACL s156(1)
Consumer
- Individual consumer (B2C transactions)
Document Summary
Competition and consumer act (cca) 2010 purposes: protect consumers, regulate restrictive trade practices. Australian consumer law (acl) is a part of cca applied in all states and territories so consumers in australia have same rights and all businesses have the same obligations in all transaction regardless of where they take place. Consumer protection consumers are often at a disadvantage compared with manufacturers who have more resources, better informed about legal rights, obligations and regulations. Misleading and deceptive conduct (mdc) of section 18(1) prohibited under acl - a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Meaning of in trade or commerce includes any business or professional activity (does not include private sales by individuals. Section 18 and marketing and advertising fertile field for section 18 disputes.
