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  • Writer's pictureArida Lawyers

What obligations do you have under Consumer Law?

Updated: Nov 21, 2021

Consumer law is complicated. Under-preparation and a lack of familiarity with the relevant law regularly results in businesses having to provide remedies to consumers that they feel are unfair. Meanwhile, consumers are also often unaware of their rights and how to best ensure they are met.

In this article, Arida Lawyers will clarify key aspects of Australian Consumer Law (ACL) and explain the situations in which a business is liable to provide remediation to a “consumer” – with particular attention paid to manufacturer liability when it comes to motor vehicles.

What are consumer guarantees?

Consumer guarantees refer to the rules governing purchases of goods and services under ACL. When products are sold to a consumer, they automatically come with a set of guarantees – if these are not met, the consumer has the power to exercise their rights under the law.

These guarantees tend to relate to warranty and stipulate the circumstances in which a business is obliged to provide a consumer with remediation in the form of a repair, replacement, refund, or financial compensation.

  • Goods must be of “acceptable quality”.

  • They must be described accurately across all consumer touchpoints.

  • They must adhere to the manufacturer’s “express warranty”.

  • Parts for repairs must be “reasonably available for a reasonable period of time”.

  • The list goes on.

For a person or business to be a “consumer” under the ACL, these conditions must be met:

  • That the goods or services cost less than $40,000 (however, this amount is set to increase to $100,000 from 1 July 2021).

  • If the goods and services cost more than the above threshold, they are goods/services that would typically be obtained within a domestic, household or personal setting.

  • A person/business is also deemed a consumer if the goods consist of a commercial road vehicle or trailer, which is used for the transportation of goods along public roadways.

  • For goods and services sold prior to 2011, a different body of law applies (The Trade Practices Act).

  • Certain other exceptions apply.

How does the ACL relate to manufacturer liability for motor vehicles?

The ACCC watchdog has recently released its Compliance and Enforcement Priorities for 2021 and it has listed the motor vehicle and caravan industry as one in which it wants to “empower consumers” and “improve industry compliance with consumer guarantees”. The revelation comes on the back of rulings against several household name car brands and multiple “lemon” caravan scandals.

For a business to be eligible for “manufacturer liability” they must be definable as a “manufacturer” under the ACL, but the meaning of this is relatively all-encompassing. A manufacturer is not only a business which makes or assembles the goods, but one which imports the goods in the absence of an Australian-based manufacturer, one that ties its brand identity to the goods, or represents itself as the manufacturer to the public.

If a motor vehicle “manufacturer” of this definition provides a vehicle with a safety defect and this equates to a “major failure” as opposed to a “minor failure”, then a manufacturer will be liable to provide extensive remediation including refunds, repair, replacement or financial compensation. This escalates when the consumer suffers loss or damage because of the defect.

Even if the ACL isn’t applicable to a motor vehicle manufacturer in a particular case, they may still be liable under common law.

At Arida Lawyers, we specialise in advising and representing the interests of both sellers and consumers. On top of our wide-ranging consumer law services, we can also provide counsel on contract law, debt recovery and employment law.

Contact Arida Lawyers today on 1300 146 390 or email to arrange a free consultation.

This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.

Liability limited by a scheme approved under Professional Standards Legislation.

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