CONSUMER LAW AND COMPETITION

Was the implementation of the Australian Consumer Law’s consumer guarantee system better than the former Trade Practices Act 1974 (Cth)’s implied warranty provisions? Would you kindly explain?

The New Australian Consumer and Law is found in Schedule 2 of the Competition and Consumer Act of 2010 (Cth). (ACL). Many of the consumer safety provisions from the first law, the Trade Practices Act (TPA) of 1974, were renamed in the new law. (Cth). The ACL is a Single National Law that is implemented uniformly in all state and territory courts. The courts enforce it as uniform consumer legislation all over the nation. The text in ACL does not change whether as a Law in Commonwealth of law in one of more Territories and States. Therefore, the basis of the application is critical when it comes to the ACL to ensure the law is applied in all states and is not affected by differences in Australian jurisdictions. These are aspects that are not applicable to the Trade Practices Act 1974. The paper discusses consumer guarantee which is one of the significant changes made in the ACL from the implied warranties of the Trade Practices Act 1974. The aim is to establish whether in the introduction of the consumer guarantee regime under the ACL in Competition and Consumer Act 2010 is an improvement to the former implied warranties system under the old Trade Practices Act 1974 (Cth).

The ACL and Consumer Guarantees

A significant change to the ACL is the Consumer Guarantee Law (CGL) that replaced the implied terms of the consumer law to contracts for the supply of goods as well as services. The changes were under part V, Division 2 of the Trade Practices Act whereby a new regime named as the consumer guarantees were introduced to apply as legal rights. Therefore, the aim of enacting the customer guarantee law was to harmonize as well as clarify the law providing mandatory quality standards when supplying goods and services to consumers. The paper entails a discussion of whether the introduction of the consumer guarantee regime under the Australian Consumer Law was an improvement to the former implied warranties system under the old Trade Practices Act 1974 (Cth). First, it is important to understand the historic significance of the changes to the TPA, the changes made to the CGL and the reasons for these changes. Finally, an analysis of whether the changes were improvements to the implied terms in the TPA will be discussed.

Historical Significance of the changes

The Consumer Guarantees Law under the Australian Consumer Law was modified on the 1st of January 2011. The changes were made by the earlier legislation, the Trade Practices Act 1974 which was amended for the facilitation of the start of the ACL. The changes began with renaming the Act from Trade Practices Act 1974 to the new law, the Competition and Consumer Act (CCA) 2010 (Cth). The introduction of the ACL followed other amendments that were substantial to the provisions of consumer protection under the Commonwealth. Enacting the ACL would applicable to the consumer laws of all the states and territories in Australia.

The Changes

The changes made to the CGL from the TPA 1994 were the implied terms stipulated in the Trade Practices Act of 1974, section 66 to 74 regarding consumer transactions. These implied terms were changes to consumer guarantees found the Consumer Guarantees Law, section 51 to 64. The TPA suggested terms for warranties and conditions. These were modified to customer contracts for particular warranties and conditions. It means that the consumer guarantees in the Australian Consumer Law were the primary changes that were made from the provisions of the TPA. Consumer guarantees are defined as the legal sureties with whom failure for compliance gives rise to statutory rights of taking a cause of action. Section 51, 52 and 53 of the Consumer Guarantee Law in the ACL provide guarantees to the title of goods. They require that the supplier of goods stops having the title of goods once they are sold or transferred to the final consumer. The vendor also has the right of selling products to the customers, and the possession of these goods cannot be disturbed. Once the goods have been sold to the clients, the ownership is free from any security. Section 54 to 57 of the ACL consists of consumer guarantees relating to the quality of goods. The goods must be of acceptable quality as they should be fit for serving a particular purpose as defined by the consumer to the supplier. The sections stipulate that when goods are to be sold based on a particular description, then, they should meet the detailed description by the client. In this case, the supplier must ensure that those goods are in compliance with the indicated report by the customer. If they are to be sold based on a sample and demonstration, then, the products must meet the condition of the sample and demo model. In section 58 of the ACL, the consumer guarantee provides an assurance that the manufacturer has the legal responsibility of taking a reasonable action of ensuring that all facilities for repairing the goods when they encounter a default are available to the customer when necessary. In section 59 of the ACL, manufacturers and suppliers are provided with a statutory guarantee for complying with all express warranties given for goods. In this case, electricity, computer as well as electricity are to be taken as products as defined in section 2 of the Australian Consumer Law. Sections 60, 61 and 62 of the ACL, guarantees relating to services are provided. Here, manufacturers or suppliers are given the duty to ensure due care and skill when providing services to consumers. They should make sure that the services are fit for the particular purpose defined and informed by the client and that those services will be delivered within the stated and reasonable time.

Analysis

From the above discussion and enlisting of the changes made to the TPA 1974, it is clear that in one way or the other, the Consumer Guarantees Law introduced in the ACL under the Consumer Competition And Protection Act 2010 confirms that the new regime improved the implied warranties under the formed TPA 1974 (Cth). Even though the statutory standards in the CGL are similar to the implied warranties in the TPA, several reasons confirm why a person would argue in support that the introduction of the consumer guarantee regime under the ACL was an improvement to the implied warranties system. The first item that a person can identify from the analysis is that the ACL provided consumer guarantees standards enforceable by the statute itself.

The implied warranties were replaced with a legal situation that the suppliers enter with the consumers whereby the vendor accepts to sell the goods or services to the client. Here, one can see that the implied warranties become legal guarantees that must be fulfilled by the supplier or manufacturer to the consumer. As stated earlier, the Consumer Guarantee regime improved the former implied warranties regime by making the terms of consumer transactions with the supplier or manufacturer clearer. It explains the transactions between the vendor and client in a more clear way that a person can understand through the explanation given.

The Trade Practices Act 1974 only states the warranties without much explanation of the details relating to an elaboration of what a client should understand regarding consumer protection when buying goods and services from suppliers and manufacturers. For example, section 59 of the ACL, adds an express warranty of goods. The consumer guarantee here provides the manufacturer o supplier has the mandate of complying with the given express warranty by the ACL. Here, the customer guarantee provides express warranties for gas, computer software as well as electricity as they are considered in the class of goods. Unlike the Trade Practices Act of 1974, which only provides implied warranties for “goods” and “services” The TPA implied warranties do not describe or consider gas, electricity and computer software as products. Therefore, the consumer guarantee regime under the ACL was an improvement to the earlier implied warranties in TPA 1974.

Acceptable Quality

The major idea that makes the customer guarantee regime as an improvement under the ACL to the implied terms regime under the TPA is the theme of acceptable quality. In this case, the consumer guarantee provided in section 54 of the ACL on acceptable quality explains in details what is not given in the Trade Practices Act implied warranties. According to the consumer guarantee, there are added descriptions of what a client should get a good or service of acceptable quality. In this case, goods and services of acceptable quality must meet the following criteria. They must be able to serve all the purposes that such goods supplied must meet. Products and services of acceptable quality must be acceptable both in how they appear and finishing. They should be free from any defects, ensure safety, durability to serve the purpose intended by a reasonable consumer. The state, as well as condition of the goods, must meet all the matters addressed in section 54 of the ACL.

Unlike the implied terms in the TPA 1974, the consumer guarantees in ACL provide for various matters that arise as a result of fulfilling section 54. Here, the nature and prices of the goods prepared statements that were made regarding the products based on its packaging and labeling where necessary are addressed. Further, consumer guarantees have improved the implied warranties by stating that matters of representation concerning the supplied goods and services by the supplier or manufacturer. The section adds that any other relevant issues relating to the circumstance of providing the goods should be considered ensure products of acceptable quality are supplied.

These standards provided in section 54 of the ACL on consumer guarantee for products of acceptable quality is not different from what is presented in the Trade Practices Act 1974, section 71. However, in ACL, consumer guarantees, they are stated in an elaborate manner that makes the details more under stable to the parties involved in the chain of supplying goods to customers. Section 71, of the TPA 1974, provides implied warranties that call for the fitness of goods for every purpose for which they were supplied. As such, the section calls for measuring what was provided to that which could be a reasonable expectation regarding the timing of supply to the client based on all circumstances that are relevant. Looking at section 71 of the Trade Practices Act 1974, the statement of acceptable quality is a bit complex, and an ordinary person will not understand the circumstances of supply stated in the particular section. When a person reads the same expansion in section 54 of the ACL, one can understand these conditions as they are explained in details. The standard here is seen to be higher than the old one in the Trade Practices Act. Therefore, the introduction of the consumer guarantee regime under the ACL was an improvement of the implied warranties regime in the former TPA 1974 (Cth).

Application of the ACL

Ways and places were the ACL applicable define its difference and improvement of the implied warranties in the TPA to consumer guarantees. It explains the high degree of certainty regarding the rights of consumers. Various jurisdictions such as Victoria, Tasmania, New South Wales and Queensland have been able to apply the consumer guarantees in a comprehensive perspective than the limited TPA that was applicable universally while the ACL allows consumer guarantees to be used nationally and to other territories. The ACL was formed by the Council of Australian Governments in 2009. It is a uniform national law but its applicability in two ways. The CCA allows the applicability of the ACL as Commonwealth Law and a law that can be adjusted to fit every State and Territory in Australia based on the regulation that is applying to the Consumer Law.

Part XI of the Competition and Consumer Act 2010 states that the ACL is applicable as a law of Commonwealth similar to the Trade Practices Act 1974 regarding the protections of the consumer. Therefore, the consumer guarantees in the ACL are applicable in Commonwealth Law similar to the implied warranties in the TPA to regulate the conduct of corporations, and when trading between the nation of Australia and regions beyond Australia. Here, the ACL applies between States, between and within Territories when supplying goods and services. As an elaboration of expansion and improvement of the Trade Practices Act, 1974, the ACL applies in the various Australian Territories based on the following different Acts for every state. For the Fair Trading Act 1987 (NSW), and Fair Trading Act 1987 (SA), the ACL applies in Part 3. In the Fair Trading Act 1999 (Vic), the ACL applies in Part 2. For the Fair Trading Act 1989 (Qld), the ACL applies in Part 3. Other Acts include the Fair Trading Act 2010 (WA), Fair Trading (ACL) Act 1992 (ACT) and the Australian Consumer Law (Tasmania) Act 2010 (Tas). The Consumer Affairs and Fair Trading Act (NT) where the ACL applies in Part 4 also form part of the Acts enforcing the ACL.

Conclusion

The discussion proves that indeed, the introduction of the consumer guarantee regime under the Australian Consumer Law was an improvement to the formed implied warranties regime under the former Trade Practice Act 1974. When comparing the two laws based on the changes that were introduced to the ACL, the consumer guarantee regime provides significant improvements to the implied warranties. In the Trade Practices Act 1974, the implied warranties are described in only nine sections of the Act. In the ACL under the Competition and Consumer Act 2010, the consumer guarantees extent to fifteen sections that provide a better explanation of the rights of the consumers and the obligations of the supplier or the manufacturer when supplying goods and services. The implied warranties in the TPA 1974 do not consider gas, electricity and computer software as products or services, however, in the consumer guarantee regime, these are described as goods and fall under merchantable items and not services. It means that the customer guarantee system aimed at providing a clearer guideline for suppliers and manufacturers regarding goods and services supplied to the client. Besides, the applicability of the consumer guarantee regime based on the ACL is more elaborate for easy usage in different Australian States and Territories. Further, implied warranties in the TPA explain little concerning goods of acceptable quality and applicability of the law in various states and territories in Australia. The consumer guarantees provide client rights to a higher degree when compared to the implied warranties. The Consumer Goods Law harmonized and clarified the implied warranties under the TPA and made the standards mandatory for enforcement in a court of law when goods and services are not of acceptable quality. Therefore, based on the above explanations, it will be true when one argues that the consumer guarantee regime under the ACL was an improvement to the former implied warranties under the former TPA 1974.

References

Brennan, T. (2014). The Australian Consumer Law 2010. Available from < http://www.13wentworthselbornechambers.com.au/wp-content/uploads/2014/02/Brennan-australianconsumerlawbytombrennan.pdf>

Chapple, S. (2011). The New Australian Consumer Law: An Overview of Key Changes. Available from < http://13stjames.net.au/wp-content/uploads/2011/12/Australiam-Consumer-Law.pdf>

Competition and Consumer Act 2010

Kojevnikov, J. and Edghill, K. (2012). Australia: Statutory Guarantees Under the Competition and Consumer Act: A Can of Worms - Part 1. Mondaq. Available from: < http://www.mondaq.com/australia/x/170794/Consumer+Law/Statutory+Guarantees+Under+the+Competition+and+Consumer+Act+A+Can+of+Worms+Part+1>

Paterson, J. (2011). The New Consumer Guarantee Law and the Reasons for Replacing The Regime of Statutory Implied Terms In Consumer Transactions. Critique and Comment. Melbourne University Law Review, 35:252-279.

Trade Practices Act 1974 (Cth).