Question

Justin Greenway is the heir to a very successful family-owned wine-making business. Decades ago, Justin’s great grandfather bought a large area of land in Yarra Valley where the family has been making wine for generations. Justin is now 35 years old and manages the vineyard. Justin is passionate about harvesting the best grapes to make quality wine.

Justin needs a new heavy-duty tractor to assist in harvesting the grapes. Justin visits a winery equipment business called Winery Equipment Specialists, which is known in the wine making industry to have a wide selection of both general use and specialised tractors.

Justin meets Beth, the manager of Winery Equipment Specialists to discuss purchasing the new tractor. Justin tells Beth that not only does he need a tractor for harvesting grapes for commercial purposes, he also needs a tractor with a special capacity to handle his property which has a few hills on it. He needs the tractor to be able to negotiate its way up and down those hills.

Beth shows Justin a tractor which she says will definitely meet Justin’s needs. A logo exists on the side door of the tractor that says: ‘Super Tractor designed for the hills’. The cost of the tractor is $40,000 and the parties enter into a written contract which states the following:

‘All statutory provisions which would otherwise apply to this transaction are hereby expressly negated’.

The tractor is manufactured by Agricultural Industry Construction Company which has its head office in Melbourne.

Shortly after its purchase and use, the tractor proves to be entirely inappropriate for Justin’s needs at the vineyard. It cannot negotiate the hills on his property and has stalled on many occasions. As a result, Justin cannot harvest the grapes in a timely manner and is worried they will not have enough quality grapes to make wine this year. Justin wants to commence legal action.

REQUIRED:

Advise Justin of all his rights and remedies against both Winery Equipment Specialists and Agricultural Industry Construction Company under the Australian Consumer Law.

Answer 1

Solution-

The Australian Consumer Law (ACL) includes:

• a national unfair contract terms law covering standard form consumer and small business contracts;
• a national law guaranteeing consumer rights when buying goods and services;
• a national product safety law and enforcement system;
• a national law for unsolicited consumer agreements covering door-to-door sales and telephone sales;
• simple national rules for lay-by agreements; and
• penalties, enforcement powers and consumer redress options.

If a product or service you buy fails to meet a consumer guarantee, you have the right to ask for a repair, replacement or refund under the Australian Consumer Law. The remedy you're entitled to will depend on whether the issue is major or minor.

Under this Law Justin has the following rights-

Repair, replacement or refund

Justin can ask a business for your preference of a free repair, replacement or refund, but you are not always entitled to one. For example, the consumer guarantees do not apply if you got what you asked for but simply changed your mind, found it cheaper somewhere else, decided you did not like the purchase or had no use for it.

If Justin have a minor problem with a product or service, the business can choose to give you a free repair instead of a replacement or refund. When you have a major problem with a product, you have the right to ask for your choice of a replacement or refund. For a major problem with a service, you can choose to receive compensation for the drop in value below the price paid, or a refund.

Repairs

If the problem with a product or service is minor, Justin must accept a free repair if the business offers you one.

If the business fails to give you a free repair within a reasonable time or cannot fix your problem, then justin can:

• get it done elsewhere and pass on the costs to the business
• ask for a replacement
• ask for a refund
• recover compensation for the drop in value below the price paid.

Repair notices

Under the Australian Consumer Law, businesses accepting goods for repair must provide consumers with repair notices when:

• the goods being repaired are capable of retaining user-generated data, for example, mobile phones, computers, portable music players and other similar electronic goods
• it is the repairer’s practice to supply refurbished goods rather than repair defective goods, or to use refurbished parts in the repair of defective goods.

The consumer must receive the repair notice in writing before the goods are accepted by the business for repair.

Replacements and refunds

You can ask for a replacement or refund if the problem with the product is major.

Replaced products must be of an identical type to the product originally supplied. Refunds should be the same amount you have already paid, provided in the same form as your original payment.

The business may take into account how much time has passed since you bought the product considering the following factors:

• type of product
• how a consumer is likely to use the product
• the length of time for which it is reasonable for the product to be used
• the amount of use it could reasonably be expected to tolerate before the failure becomes noticeable.

For a major problem with services you can cancel the contract and obtain a refund or seek compensation for the drop in value of your services provided compared to the price paid.

Along with this Justin also served some loss in the Vineyard and this can be claimed for compensation as-

He can seek compensation for damages and losses you suffer due to a problem with a product or service if the supplier could have reasonably foreseen the problem. This is in addition to your repair, replacement or refund rights.

Compensation includes the cost to you caused by a problem with products or services. This is usually financial costs, but can include other costs such as lost time or productivity.

It can be hard to put a dollar figure on compensation for damages and loss. Compensation should put you in the position you would have been in if the products or services had done what they are supposed to under consumer guarantees.

What is not covered?

Businesses do not have to pay for damages or losses that:

• are not caused by their conduct, or their products
• relate to something independent of their business, after the goods left their control.

Misleading claims about compensation

Suppliers must not mislead you about your rights to compensation by stating they are not responsible for any losses you might suffer during or after using the product or service.

Making a claim for compensation

Take the following steps to make a claim for compensation:

1. Work out an accurate amount of compensation you would need to return you to the financial position you were in before the problem occurred.
2. Contact the business verbally or in writing to explain the problem and present your claim for compensation. You may also want to ask for a refund or replacement.
3. Show proof of purchase with a receipt or bank statement.
4. If the supplier refuses to discuss your compensation claim or you cannot negotiate an agreement, you can seek formal dispute resolution or take legal action.