The Australian Consumer Law within the Competition and Consumer Act 2010 - Assignment Example

Business Law - s 18 of the Australian Consumer Law within the Competition and Consumer Act (ACL) Introduction Australian Consumer Law is a uniform law nationally, meant to protect the consumers, and help them have a fair trading environment. It has three general protections which are; specific bans on unconscionable conduct in some business transactions and consumer transactions, and a general ban on unconscionable conduct in commerce or trade, a general ban on deceptive or misleading conduct in commerce or trade, and a provision that nullifies unfair contract terms in consumer contracts1. This paper is a discussion about Australian Consumer Law, focusing on what it is, how it is applied, the difference from the previous law, its sections; specifically section 18, the effect on State laws, and its limits considering the common law application. These are discussed under specific questions as given below. What is the application of the ACL in Australia? How was the introduction of new legislation important for the whole of Australia? Is the legislation state or Commonwealth legislation? The Australian Consumer law is single national law about fair trading and consumer protection. It is uniform in each State and Territory, as well as nationally. This law was implemented in January 2011 and provides the consumers with the same expectations and protections about business conduct in Australia. Businesses are also guided by this law about their obligation whenever they operate in Australia. The Australian Consumer Law is a replacement of 20 different national consumer laws and applies as the Commonwealth law of Australia. It clarifies understanding of the law for businesses as well as consumers2. It is an agenda to the Competition and Consumer Act 2010, and it is implemented by all Australian courts and tribunals including those of Territories and States. Since it is a law of the Commonwealth, ACL is a law of its jurisdiction in each Territory and State so that the same provisions apply everywhere in Australia. The requirement that products and services be treated the same way has also seen the law reflected in comparable conditions, in the Australian Securities and Investments Commission Act2001. ACL is administered by each Territory and State’s consumer law agency, and the ACCC3;4. The Australian Consumer law has brought man changes. It was designed to foster competition, and provide consumers with confidence to participate in markets in which both businesses and consumers trade fairly. It was designed to empower and protect the consumer hence improve the consumers’ well being. It was also designed to reduce costs to business through the provision of the law as a single uniform law for all parts of Australia. The ACL provides new protections for consumers which these are; increased protection from unethical and unfair business practices, a comprehensive set of remedies and rights concerning the supply of goods and services, a national product safety regime, and the right to ask the court to exclude unfair terms in standard form consumer contracts5;6. How is the legislation different to what existed previously, for example, in relation to companies and natural persons, and its application on various transactions? The ACL has new national unfair contract terms of law. Part two-three of Chapter two of the ACL provides for a form of consumer contracts. This replaced part 2B of the Fair Trading Act 1999. Unfair practices and fair trading are now under a single set of provisions. These include additions and amendments that mirror existing Territory and State Consumer laws. These provisions are focused on certain activities such as: failing to supply gifts as offered, or the gifts and prizes. Misleading, or false conduct, or representation, in trade or commerce, bait advertising, erroneously accepting payment for services and goods not supplied and unwanted supplies. Harassment and coercion, involvement in pyramid selling schemes or even encouragement of participation to such schemes, involvement in component and multiple pricing7. ACL has new enforcement powers, penalties and consumer redress options. These are contained in chapter five of the ACL and apply to suspected breaches, or breaches of Australian Consumer Law. These new changes, however, had been implemented in 2010 at the commonwealth level. Chapter 5 provides businesses with redress options, as well as consequences of related breaches in terms of fines, and criminal circumstances in specific circumstances8. Part three-two, division one of Chapter three has new consumer guarantee provisions, which replace the statutory implied warranties and conditions that were provided in the Fair Trading Act 1999. The new guarantees now relate to: express warranties, undisclosed securities, fitness for any disclosed purpose, undisturbed possession, fitness for a particular purpose, demonstration model or supply of goods by sample, acceptable quality, availability and repairs of spare parts, supply of services, supply of goods by description, reasonable time for supply, and due care and skill9. Unsolicited consumer agreements are now under a new national regime. This is as provided in division 2, part 3-2 of chapter three of the ACL. The provisions of this division regulate formation of unsolicited selling agreements and unsolicited sales practices. This is different from the Territory and State laws on telephone sales, door-to-door sales, and other forms of direct marketing, where there is no retail context10. ACL also ensures simpler rules for lay-by-agreements; a new national product safety regime where a consistent approach is provided to safety bans, and safety standards. It ensures enforcement, product recalls, safety warning notices, and notification and reporting of requirements. It also ensures a new national provision on information standards, increased liability for manufacturers, and standard wording in contracts11. What kind of behaviour can be considered to be misleading, for example, if you say nothing? Or what if you believed something which turned out not to be true? Behaviour is considered misleading if it fits the definition of misleading or deceptive according to section 18 of the ACL. This section states that a person must not engage in conduct, trade or commerce that is likely to deceive or mislead, or is deceptive and misleading. A description of what is misleading and deceptive gives an impression that it is a conduct that has a tendency to deceive a significant number of people, or lead them into error. Misleading includes conducts ranging from making inaccurate or false claims, lying to a specific party or people, leading a significant number of people to the wrong conclusion, creating a false impression, and leaving out important information12. One’s conduct has to be tested to determine if it was misleading and deceptive. The test is done by the tribunal or the court. Silence may sometimes be interpreted as deceptive or misleading under specific circumstances of the case. A case where a party does not withhold information deliberately, and fails to disclose such information is not considered misleading. Deliberate holding of information may constitute misleading or deceiving conduct13. What are the limitations of s 18 under the ACL, and indeed the ACL itself? Are all transactions between individuals covered by this legislation? ACL is limited to the protection of the consumer but provides some protection to businesses through some consumer protection laws. Limitations of ACL depend on the types of protections. Some are more limited like the ones that apply to consumers buying goods and services for domestic, household, or personal use, while others are so general. ACL is limited to people who have acquired specific services or goods as a consumer if the goods and services were acquired for household, domestic, or personal use or for consumption. If the amount payable for the services and goods is not more than $40,000; or in case the goods include a trailer or a vehicle acquired for transportation purposes14. One is not considered a consumer under the protection of ACL if the person buys goods or services for re-supply, if the goods and services are purchased for use in commerce or trade. It is also the case if the goods and services are acquired in the course of treating or repairing the goods or in the process of manufacture or production. One is presumed to be a consumer under the definition given above unless; the contrary is established as found in section three (10) of the ACL. ACL also does not apply to insurance contracts, which cannot be made relief subjects. Part three (2) of the ACL does not apply to telecommunications, gas, or electricity services, or insurance contracts15. Some sections of ACL apply broadly; for example, section 18 which prohibits deceptive and misleading conduct. This section applies to a range of activities from the sale of a particular product to an individual consumer from the local shop to a commercial negotiation between two large corporations16. Does state law still apply? If so how? ACL is a uniform law across the nation, which means that the differences in substantive laws between State jurisdictions cannot affect the outcome. State law, however, still applies in implementation of this law. When making decisions in pleadings and proceeding forums, it still remains necessary to apply the laws of each Territories and States when considering the basis of the application of the ACL17. Does the common law still apply to consumer transactions? If so how? Yes, the common law still applies to consumer transactions under the contract law. Provision of the Australian Consumer law offers protection to all consumers, but this does not completely override the contract law. Contract law governs the implementation of promises. As described under the limits of ACL, not all consumer transactions are covered by it; therefore, the contract law still applies in such cases. Contract law applies to all types of agreements18. It is indicated in the Commonwealth of Australia report that the contract law deals with agreements such as; those involving the sale of land, commercial deal between businesses, and even the purchase of a new TV. This means that even those under the ACL can still be considered under the contract law, except that the ACL overrides the contract law when dealing with the consumer. The ACL is a response to exploitative and dishonest behaviours against defenceless consumers, especially such actions related to the enforcement of the contract law. Australian Consumer law is a supplement of the contract law, but sometimes it can override the contract rules. This only means that contracts involving consumer transactions can still be considered under the contract law if the law allows it19. Australian Consumer law is also an expansion of the common law of unconscionable conduct. The difference made in the common law of unconscionable conduct is the introduction of fair trade duty of the businesses in relation to the consumer. This provision covers a wide range of consumer transactions, but does not include all. The rest not covered under the ACL still remain under the common law of unconscionable conduct20. What are the remedies for breach of s 18 of the ACL? There are no financial penalties for breach of section 18 of ACL, except for a financial penalty of $220, 000 for an individual, and $1.1m for a company in case of breach of other related provisions in ACL21. The victims of deception and misleading, however, are permitted to damages as a result of the conduct. The court first establishes the amount of damage that is then used to gauge monetary compensation that the victim should receive. The level of involvement of the victim in the cause of the loss can be used to reduce the damages, but if the party that caused deception is found to have been intentional in his or her or their conduct, the damages will not be reduced22. Is there anything else that you believe is relevant to this topic? The ACL is a reform of Australian law focusing on consumer protection. It recognized the inability of the consumers to protect themselves from exploitation and dishonesty of some powerful businesses. It is an expansion of the contract law, therefore; its provisions have an important effect on many of the contractual disputes’ outcome. If any reform of Australian contract law were to be made, it would consider the interaction between the consumer law and the contract law. Another issue that is of importance is the focus of the ACL. It was developed due to power imbalances that denied consumers fair trade. Vout indicates that significant power imbalances also exist in business contracts that involve small and large businesses. It would only be logical to provide similar protection to the small businesses under some circumstances. ACL could be reformed to include small businesses. Currently, it applies too broadly to business-to-business relationship23. Conclusion Australian Consumer law is a protective law, and like any other, it has focused on specific vulnerabilities of the consumer. For that reason, the law has limitations and definitions to determine its inclusions for jurisdiction purposes. As discussed above, ACL focuses on bans that prohibit deception and misleading of consumers, unfair contractual terms, and unconscionable conduct. It has been made uniform to avoid injustices that may arise due to the difference in State and Territory laws, but allows the application of the territory and State laws in pleading and application procedures. Bibliography Australia Cch, 2011, Australian Competition and Consumer Legislation 2011, Barton: CCH Australia Limited. Brennan, 2010, The Australian consumer law 2010. Retrieved from: http://www.13wentworthselbornechambers.com.au/pdfs/australianconsumerlawbytombrennan.pdf Commonwealth of Australia, 2013, The Australian Consumer Law: A framework overview. Retrieved from: http://www.consumerlaw.gov.au/content/the_acl/downloads/ACL_framework_overview.pdf Commonwealth of Australia, 2010, The Australian Consumer Law: A guide to provisions http://www.fairtrading.qld.gov.au/AboutUs/ACL_guide_to_provisions.pdf New South Wales Government, 2011, Fair trading: National reforms to consumer laws. Retrieved from: http://www.fairtrading.nsw.gov.au/ftw/About_us/Legislation/National_reforms_to_consumer_laws.page Queensland Government, 2013, Office of Fair Trading: Australian Consumer Law. Retrieved from: http://www.fairtrading.qld.gov.au/australian-consumer-law.htm The Law Hand Book, 2013, Australian consumer law. Retrieved from: http://www.lawhandbook.org.au/handbook/ch12s03s01.php Toth, R., 2014,The Australian Consumer Law: 10 Key Changes for Australian Business. Retrieved from; http://www.wisewouldmahony.com.au/index.php?id=314 Wadlow, C., 2011, The Law of Passing-off: Unfair Competition by Misrepresentation, London, Sweet & Maxwell. Vout, P., 2013, Unconscionability and good faith in business transactions, National Commercial Law Seminar Series. Retrieved from: http://www.law.monash.edu.au/centres/commercial-law-group/unconscionability-and-good-faith-in-business-transactions-paul-vout.pdf Read More