Consumer Law in Australia - Essay Example

? Consumer Law in Australia Synopsis Consumer law or consumer protection law is a branch of law whose aim is to regulate the privatelaws concerning the relationship between a seller and a buyer when involved in the sale of goods and services. Ideally, consumer law covers an array of topics that include fraud, unfair business practices, product liability, misrepresentation, and rights to privacy among a list of other consumer/business enterprise interactions. The core principles embedded in consumer law safeguard against frauds that may arise from pricing, personal loans, consolidation, utility turn offs, and bill collection regulations that may influence bankruptcy. As per the law, shoppers have the right to return goods that they find to be faulty or do not match the samples displayed or underperform, which are the basic rights of a consumer. On the other hand, the law protects retailers against policies that the law does not cover such as when a consumer changes their mind after making purchase. 1. Introduction In many nations, there are organs charged with overseeing the compliance of consumer law meaning no universal body that governs this law. For instance the state organ charged with this responsibility is the Australian Competition and Consumer Commission1 while in Germany this responsibility falls on the Minister for Federal Cabinet. In Australia, the ACL or the Australian Consumer Law is a uniform legislative application for protecting consumers, which applies as the practiced law in the Commonwealth of Australia. In addition, goods worth more than $40,000 and were household goods and appliances fell under this protection together with vehicles that were essential in the transportation industry. Some of the other goods that the ACL offered protection included second hand goods sold, hired or leased to consumers through trade or commerce and any goods whose worth was up to $40,000 or a figure that ACL would denote in the future. With this, this essay will delve into Sarah’s case study where she bought a television set and found to be faulty after taking it home. Further, it will highlight on Sarah’s individual rights as a consumer of home appliance as provided for under the Consumer legislation in Australia and Contract law. Further, the essay will highlight Sarah’s rights under the consumer legislation and under the contract law. Focus will also be on the consumer law in Kuwait and their comparison to those of Australia in relation to Sarah’s case and the difference in handling of this case in both countries. 2. Consumer rights under the consumer legislation in Australia As of January 2011, suppliers and manufacturer’s of products and services had to comply with the Competition and Consumer Act of 2010, which is also the Australian Consumer Law2. The benefit that law brought on consumers were relatively the same as those stated in warranties and conditions that were previously existing in states and territories of Australia. The law was also a follow up on the Trade Practices Act of 1974 that influenced fair-trading of goods and services across the Australian region3. The ACL also spread to cover goods and services received by consumers as gifts as this area emerged as a possible area of infringing on the rights of the consumer. However, goods bought before the enactment of the law in 2011 were eligible to protection under the ACL, but were under the protection of the Traders Practice Act. Goods that are on one off sales such as garage sales and those sold on auctions on behalf owners also do not have protection under the AC law. Additionally, ACL does not cover goods bought for re-supply, those costing more than forty thousand dollars but are normally for business purposes or those that a buyer makes purchase in order to assist in production or manufacture of their goods4. As per the ACL, a consumer has rights against a supplier if the goods on sale do not meet the consumer expectations through minor or major problems. In cases that a problem in a product is minimal, the supplier can repair the item, offer to replace the item, or offer a refund meaning that the consumer is the one to choose the compensation method that suits them best5. As per this case, the trader showed Sarah the particular television set that was on sale, which to the customer showed it met consumer guarantees in terms of description and quality. When the problem with the project is major, then it is imperative for a retailer to offer the consumer a full refund of their purchase or the consumer may opt to reject the product in question. Alternatively, the consumer has the right to ask for a replacement of the product, or a total refund that amounts to the value that they spend while acquiring the goods in the first place. The consumer cannot also make unreasonable demands to the retailer despite the fact that the retailer was at fault such as demanding for full compensation without having any intention to return the defaulted good. The trader refuses to pay Sarah any compensation as he blames her for the defect on the television as he claims that the product was in working condition when she left with it. According to the above presented problems of making a faulty purchase, a consumer has the right to acquire goods that are of the right quality, fit the purpose, that have an accurate description, that are the same as those on display, and the right to experience the satisfaction as per the retailers promises. In addition, a consumer has the right to no hidden charges attached to the goods that are on sale without their knowledge and the right to use the goods bought except in special circumstances. However, the right to quality may not apply if the retailer explains to the consumer on the faultiness of the good on sale then they decide to still make purchase. For the case of Sarah, the retailer breached at least two rights that she had a consumer that are the sale of the defected television set knowingly and the television set did not match with the sample shown during the demonstration by retailer hence contravening the Australian Consumer protection law. 3. Overview of Australian contract law and its implementation The formulation and adoption of the Australian Consumer Law and the Australian Contract Law had relatively similar intended purposes, which was to regulate trading practice. In scholarly terms, a contract is a legally binding promise between two or more trading parties whose main intention is to enforce it at a court of law because of the legal rights and obligations in the promise. The only time that may lead to the termination of a contract would be once the contract has met the desires of each party to satisfaction6. When making a contract, it may either be a contractual or a non contractual promise where an individual that fails to fulfill a non contractual promise may not attract any illegalities. In Australia, a contract requires that one enter into an arrangement or agreement that includes an offer and acceptance provision, considerations, intention to establish legal interactions, and the compliance to the legal compliances that may arise7. As per the contract law, it is critical for the parties involved in the signing of the contract to intend to uphold the same. The evidence of this intention should be in writing or verbally, if there is no proof of intention then there is no contract. When the trading parties establish an intention to create a legal contract, they get into an agreement where one party presents an offer, which the other party agrees to. The last part within a contractual promise is the consideration aspect which is the considering the exchange of something that is of value from one to the other in return to obtaining a promise. The basic requirement in the trading of goods within a contract of sale is that a seller offers to change ownership of the goods to a buyer in exchange for money consideration, which is ‘price’. Therefore, for contract of sale to be complete products, transfer of ownership and money consideration must be present. Within any legally binding contract, there are a set of terms such as terms and conditions and express warranties that trading parties should be aware of before getting into a trading agreement. In a definition, express warranty refers to a representation of goods on sale in terms of quality, terms of service, characteristics of the products, and their availability that may influence a buyer to obtain them in the future. Sub-section 59 of the consumer act states that a consumer has an entitlement to compensation by a retailer or manufacturer if they do not provide goods that are on display in relation to quality. They are liable because they would be in breach of warranty especially if there was a transfer of ownership from the buyer. However, a certain clause under the Common law may not be in favor of the consumer especially if the buyer inspected the goods before the seller packs them and if the buyer solely relied on the information by the seller during purchase. As for Sarah’s case, the two parties created a contract as stipulated under the ACL, but the contract may not be in favor of Sarah. In essence, Sarah made the decision to purchase the television based on the information given by the seller as she thought it to be convincing in terms of description, quality, and features. Further, Sarah accepted to make purchase as there was consideration and she made a compensation of $1,000 for the television to the retailer. As per the legislation on the sale of goods, the two parties created a contract because there was transfer of ownership to Sarah and she in turn made money consideration. In the event that Sarah inspected the television before buying it attracts blame to her as she relied on the information given to her by the seller, but the blame may also be on the trader because he would be in breach of warranty because the television sold did not match the description that he had given to Sarah. Sarah can sue, the retailer for false representation as provided under section 29 of the ACL, the challenge lies in her proving that they created a contract of sale that the trader breached. The other claim that Sarah could make is that the warranty of quality of the television did not match the one the retailer sold to her. Under the circumstances presented, Sarah may seek for a replacement or monetary compensation from the retailer for the defected television set that she had obtained. The claim that she could have made in the event that she chose to engage in legal proceedings would have been that the retailer gave her misleading information regarding the condition of the television before she bought it. 4. Bodies that Sarah may use to help negotiate with the retailer and leading cases that might be relevant in this process In order for Sarah to push for her compensation, she could employ the services of the ACCC, which is a body that can determine the legality of her predicament. The ACCC will in turn file a case in the Federal Court through the powers mandated to it that would see the retailer face consumer rights breach charges. An example of case that may be helpful to Sara would be that of the Australian Competition and Consumer Commission v the Hewlett-Packard Australia PTY Company. An attempt to take advantage of the other party is demonstrated in the case of ACCC v Hewlett-Packard Australia where HPA admitted to having made false representation to its clients8. According to Creek, Sapountsis and De Boos (2013), the Hewlett-Packard Company had contravened section eighteen and twenty of the ACL in which they gave misleading information to retailers and consumers regarding their products. Other cases include ACCC v Hakalia Pty Ltd and its director for false representation of the products on sale, which attracted a penalty of $2.25 million. Sarah should also seek compensation because the ACCC does not exempt large enterprises from facing legal consequences as in the case of ACCC v Apple Company and Optus here they paid a fine of $ 2.25 and $3.61 respectively. Therefore, it is possible for her to initiate legal procedure because the retailer refused to compensate her as even small retailers also attract the attention of ACCC9. Another case that involved ACC C v TPG Company can also be a good reference for Sarah’s case in which the company relied on common knowledge that the market had about their products. The company was liable for penalty because it did not communicate all the facts about their products as required by in which Sarah can say the retailer did the same to her as she was only relied on the information given to her when buying the product. In essence, this was in breach of the right to accurate description of goods, which attracted a civil penalty amounting to three million dollars for the substantiated misleading representation. Sarah could use this as a basis to her case because her case is similar to that of ACCC v HPA Company because there was transfer of ownership of the goods10. However, her case may not attract a hefty penalty since hers is a television set, but it may aid her in recovering money or getting a replacement television set that is equivalent to her money. This would help her in establishing the possible remedies to this situation and influence the retailer to adopt acceptable trading practices. 5. Consumer law and rights in Kuwait and the legislations that would apply in Sarah’s case According to surveys, Kuwait sits in the category of the most preferable countries in the world because of the quality of living standards that it provides. Kuwait has the strictest laws that protect consumers in which any consumer that feel cheated by a trader or a company has the right to seek compensation. In Kuwait, a consumer can file for official grievances against government institutions and all other institutions meaning that no organ is exempted from these laws. Consumers report cases of buying expired food to the local municipalities while Ministry of health receives reports on medical errors. Kuwait also has a customer protection hotline across municipalities where consumers can report to when they feel ripped off by retailers. The municipality hotline is effective as consumers receive advice on where to take their complaints together with their receipts of purchase of the faulty goods. The lines are operational on a daily basis from Sunday to Thursday within the normal working hours. Each governorate has one consumer protection centre where people present complain of the purchase of faulty goods and services. The undersecretary that runs the governorate centre then forwards the complaints to the main centre that initiates the process of seeking compensation. The highest number of complains that these centers receive on normal working days are those of faulty electronics followed by those related to vehicle purchase11. For the case of Sarah, her case could have a different handling were she to buy the television set in Kuwait because she would have made complains at the local level. As compared to Kuwait, ACCC is a state organ that does not have roots in the grassroots of Australia meaning that it might only engage in company cases and not those individuals. Kuwait also gives a consumer an inspector from the Customer protection centre to accompany the complainant when he or she goes to seek compensation from the retailer. Unlike Australia, a receipt can serve as the only proof of purchase of a faulty product rather than also seeking a contract that outlines the terms of sale. The implication of this is that Kuwait protects consumers at the local level while Australia safeguards the same at the national level as ACCC does not send an inspector to accompany the consumer to the location in an attempt to the solve the situation. Therefore, Sarah’s case would have attracted compensation if it occurred in Kuwait because the response is swift and managed at an individual level with a protection centre officer. 6. Personal observations on consumer law The application of consumer protection laws is different across many states and nations, but the principles governing them are the same world over. Notably, some nations might apply this principle at the national level and concerning well-known companies that breach consumer rights leaving them to suffer at the hands of small retailers. Therefore, the application of the consumer protection should be with uniformity from the lowest level of trading to the highest level of traders because no consumer should suffer at the expense of others. Interestingly, consumers are also partly to blame because most of them are ignorant of their rights to purchase hence do not understand the way in which they make seek compensation in the event that a retailer plays foul on their purchase. Therefore, it is pertinent that consumers also take interest in equipping themselves with the knowledge on their consumer rights in order to arm themselves against exploitation by traders and vice versa. On the contrary, consumer law does not allow consumers to have the last word when it comes to the form of compensation that is worthy of their claim meaning that there has to be a criteria of evaluating the situation before giving a solution. Lastly, the consumer protection process should be a process meaning that the relevant stakeholders should work to better the trading principles and interaction for consumers and trader to enhance economic growth. Bibliography Barker, S. (2013). Part 1: Australian Consumer Law| Competition and Consumer Law nutshell. Minter Ellison Lawyers Journal. Retrieved on Oct. 27, 2013 from http://www.minterellison.com/publications/part-I-the-australian-consumer-law-CR-1302/ Bruce, A. (2010). Consumer protection law in Australia. Chatswood, N.S.W: LexisNexis Butterworths. Carter, J. W. (2010). Carter's guide to Australian contract law. Chatswood, N.S.W: LexisNexis Butterworths. Creek, T., Sapountsis, J. & De Boos, R. (2013). Hewlett-Packard ordered to pay $3 million Civil Penalty for breaching the Australian Consumer Law. Retrieved on Oct. 17, 2013 from http://www.davies.com.au/pub/detail/749/hewlett-packard-ordered-to-pay-3-million-civil-penalty-for-breaching-the-australian-consumer-law Department of Justice. (2012). The Australian Consumer Law: Consumer Guarantees for Goods (includes refunds, replacement and repairs). Retrieved on October 16, 2013, from http://www.consumer.tas.gov.au/australian_consumer_law/business_guarantees Freehills, S. H. 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