Question

Question 5 (Note this question is from the Week 10 Tutorial)

Required:

A. Define ‘acceptable quality’ according to s 54 (2) of the Australian Consumer Law (ACL).

B. What arguments can a seller put forward for limiting the scope of section 54 on acceptable quality found in the Australian Consumer Law (ACL)?

(Word limit: Minimum of 300 words. Maximum of 400 words)

Answer 1

1) As per Section 54 (2) of the Australian Consumer Law (ACL)

Goods are of acceptable quality if they are

(a) fit for all the purposes for which goods of that kind are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from defects; and

(d) safe; and

(e) durable

This definition is subject to a ‘reasonable consumer’ test, such that goods are considered to meet those standards if a reasonable consumer, who is fully acquainted with the state and condition of the goods, would regard them as acceptable. In determining whether goods are of ‘acceptable quality’, a number of issues need to be considered: the nature of the goods, the price of the goods (if relevant), any statement made about the goods on any packaging or label on the goods, any representation made about the goods by the supplier or manufacturer of the goods and any other relevant circumstances relating to supply of the goods.

2)

Attempts to limit consumer guarantees

General rule

Suppliers and manufacturers cannot in any way exclude, limit or avoid the consumer guarantees. Section 64 makes void any term in a contract purporting to do this and sections 29(1)(m) and 151(1)(m) make it unlawful to represent (e.g. with a sign or advertisement) that this is possible. Should a representation of this kind be made, civil or criminal penalties can be imposed of up to $1.1 million for bodies corporate and $220,000 for individuals.

Exceptions

In two situations, suppliers or manufacturers can limit their liability for non-compliance with a consumer guarantee.

First, the CCA allows the suppliers of recreational services to include terms in their contracts that exclude, restrict or otherwise modify their liability for death, personal injury (physical or mental) or illness resulting from non-compliance with a consumer guarantee relating to services. However, they cannot do this in relation to property damage or loss, or in respect of significant personal injury caused by the supplier’s reckless conduct.

Second, if the goods or services supplied are not normally acquired for personal, domestic or household use or consumption, the ACL allows suppliers to contractually limit their liability to:

· repairing or replacing the goods or reimbursing the consumer for repairing or replacing the goods

· resupplying the services or paying the costs of having the services supplied again.

However, such a term will not be effective if the supplier’s reliance upon it is unfair or unreasonable.

Also,an exemption from the guarantee of acceptable quality of goods is available only in exceptional circumstances, where the goods are used abnormally, such as a mobile phone dropped into a full bathtub or a television broken by an object hitting the screen.