Consumer and Trade Disputes
Often Consumers Are Unaware Of Their Legal Rights When Purchasing Goods Or Services
Often, consumers are unaware of their legal rights when purchasing goods or obtaining a service from a business. Similarly, this can be said about businesses who may often be unaware of their legal obligations to a consumer when supplying a good or providing a service.
The Competition and Consumer Act 2010 (Cth) regulates the supply of goods or services and aims to enhance the Australian welfare through promotion of completion and fair training and the provision for consumer protection.
In order for a dispute to arise, there must be a connection between the consumer and the business. The consumer must purchase a good or service from a business and the dispute must arise from the purchase of the good or service.
WHO IS A CONSUMER?
A consumer is a person or business that:
- Purchases, exchanges or hires goods or accept services that cost less than $40,000;
- The goods and services are an ordinarily acquired for domestic, household or personal consumption; and
- The goods are a commercial road vehicle or trailer used primarily to transport goods on public roads.
“Goods” can include food, furniture, clothing and motor vehicles.
“Services” include dining at a restaurant, haircut at the hairdressers or selling a house with the real estate agent.
WHO IS A TRADER?
A trade is a business that supply goods through selling, hiring or leasing or services to consumers. Goods include those which are purchased to be resold or to be transformed into a product and then resold.
Guarantees that apply to consumer goods
Under Australian Consumer Law (“ACL”), goods provided by businesses must guarantee that those goods:
- Are of acceptable quality;
- Are fit for the purpose the business advertised the product or service to deliver;
- Are accurately described; and
- Have spare parts and repair facilities available for a specified time unless otherwise stated.
What happens if the guarantees are not met?
If a product is sold or provided that does not meet the consumer guarantees, the consumer is entitled to a remedy, such as:
- Repair;
- Replacement;
- Refund; and
- Compensation
The circumstances of each case are different and must be determined on a case-by-case basis.
If the problem is minor, the business can elect which remedy to pursue in rectifying the problem. If the business chooses to repair the issue however, and it is taking considerable time, the consumer may choose another person to repair the issue and ask that the business pay for the reasonable costs, or reject the goods and obtain a full refund or replacement.
If the problem is major or cannot be fixed, the consumer can choose to:
- Reject the goods and obtain a full refund or replacement, or
- Keep the goods and seek compensation for loss in value of the goods.
A good is considered to have a major problem where:
- It would have stopped a person from purchasing it if it was known to them;
- Is significantly different from its description;
- Is not fit for its purpose and cannot easily be fixed within a reasonable time;
- Does not deliver what the consumer has acquired it for; and/or
- Is unsafe.
If there is an issue that has been raised by the consumer, a business cannot refuse to deal with a consumer by directing them to the supplier or manufacturer. However, a consumer may approach the manufacturer directly, and seek that they provide a remedy either through recovery of costs, reduction in product’s value or in some cases, compensation for damage or loss.
Consumer Guarantees that apply to services
Services provided by businesses must guarantee that those services:
- Are provided with due care and skill;
- Fit for the specified purpose; and
- Provided within a reasonable time if no time is set.
If there is an issue that has been raised by the consumer, a business cannot refuse to deal with a consumer by directing them to the supplier or manufacturer. However, a consumer may approach the manufacturer directly, and seek that they provide a remedy either through recovery of costs, reduction in product’s value or in some cases, compensation for damage or loss.
What happens if the guarantees are not met?
The guarantees for services are similar to that of goods.
If a service is provided that does not meet the consumer guarantees, the consumer is entitled to a remedy:
- Repair;
- Replacement;
- Refund; and
- Compensation
The circumstances of each case are different and must be determined on a case-by-case basis.
If the problem is minor, the business has the opportunity to rectify the problem. If the repair takes considerable time, the consumer may choose another person to repair the issue and ask that the business pay for the reasonable costs or cancel the service and obtain a refund.
If the problem is major or cannot be fixed, the consumer can choose to:
- Terminate the service and obtain a refund; or
- Seek compensation for difference between the value of the services provided and the price paid.
A service is considered to have a major problem where:
- It would have stopped a person from purchasing it if it was known to them;
- Is significantly different from its description;
- Is not fit for its purpose and cannot easily be fixed within a reasonable time;
- Does not deliver what the consumer has acquired it for; and/or
- Creates an unsafe situation
Exceptions to the consumer guarantees
There are certain goods and services are not protected by the consumer guarantees:
- Goods and services that cost more than $40,000 and are normally used for business purposes;
- Goods bought from one-off sales by private individuals such as garage sales;
- Goods purchased to be resold or transformed into a product that is on-sold;
- Services for transportation or storage of business goods; or
- Fitness for purpose of professional services provided by a qualified architect or engineer
Obligations of the consumer
A consumer’s rights to a remedy come into play where one of the guarantees are not met. Consumers do not have the right to a remedy simply because:
- They change their mind;
- Are able to get the same good or services cheaper somewhere else; or
- They damaged the goods by using it not inconformity with the description.
Contact JB Solicitors today for the team to assist you.
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