1、CLAW5001 Legal Environment of Business,Product liability under statute: consumer guarantees + manufacturers liability Patty Kamvounias,2,Overview of Todays Lecture,Product liability under statute: consumer guarantees + liability of manufacturers for defective goods Background common law + state legi

2、slation + federal legislation Australian Consumer Law - since 1 January 2011 Consumer guarantees When do the consumer guarantees apply? What are the consumer guarantees? Excluding/limiting the consumer guarantees Remedies in relation to the consumer guarantees Manufacturers liability for goods with

3、safety defects Common law background + Commonwealth legislation Australian Consumer Law - since 1 January 2011 Preview of next weeks lecture: statutory restraints on freedom of contract,2,Discussion Question,Catherine loves to start each day with a glass of freshly squeezed vegetable juice. She sees

4、 an advertisement in a Sunday newspaper for a new fully imported Sunshine brand juice extractor and reads the description which includes the following words: Everyone can have their own juice bar at home as Sunshine now caters for the discerning fresh juice drinker. The 2 cup per minute capacity mak

5、es it easier for those with large families or healthy appetites. Gleaming stainless steel construction makes cleaning a breeze. Twelve months guarantee. Catherine visits Domain Department Store (Domain) in Sydney to get further information. She explains to the salesman that she really likes carrot j

6、uice, as do her three children, so a fast and efficient performance is essential. He assures her the Sunshine juice extractor performs as described in the advertisement. Catherine is concerned that the price is a bit too high but the salesman assures her that Sunshine products are extremely reliable

7、 and while the price may seem high “you have to pay for quality products and Sunshine is the best.”,3,3,Discussion Question,Catherine buys a Sunshine juice extractor for $599 from Domain. When she unpacks the machine at home, she finds a guarantee card that states:The manufacturers confidently guara

8、ntee this product for 6 months (parts and labour) and a further 6 months (parts only) for normal domestic use only. No other warranty of fitness is given Catherine finds the machine is very slow to operate, taking an average of five minutes to produce 1 small glass of carrot juice (although it is mu

9、ch quicker at extracting juice from oranges). Cleaning is also difficult as the pipes through which the juice flows get clogged if the machine is used to make more than 3 glasses of juice at a time. Last week, when Catherines daughter Anna was using the machine to make tomato juice, her fingers were

10、 badly injured when they got caught in the mechanism of the extractor. Anna is still in hospital. In her attempt to extricate her fingers, Anna knocked the juice and the juice extractor against the $10,000 original Pro Hart painting on the dining room wall and damaged it beyond repair. There is also

11、 a nasty stain on the carpet which Catherine has been unable to remove. Advise Catherine and Anna of their legal rights against Domain and Sunshine under the Competition and Consumer Act 2010 (Cth),4,4,For discussion:scenario/problem question from seminar guide,What happened? Juicer is slow and diff

12、icult to clean + personal injury (fingers) and damage to painting and carpet Who wants to commence legal proceedings? Catherine (purchaser) + Anna (user) Who may be liable?Salesman? Domain (retail store)? Sunshine (manufacturer)? Other? What is the legal basis of liability?Tort? Contract? Statute? s

13、ections in which Statute/Act? What legal remedies are available?,Backgroundconsumers and the law,common law assistance to consumersrecall topic 4: making the contract - agreement,the law of contract Carlill v Carbolic Smoke Ball Co 1893 1 QB 256,7,8,recall topic 6: Terms implied by statute,http:/www

14、..au/au/legis/nsw/consol_act/soga1923128/ Sale of Goods Act 1923 (NSW) When are terms implied? when you have a contract of sale of goods See: Section 6(1) : A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for

15、a money consideration called the price. Requirements: - contract- for sale (money consideration) - of goods (not services) (contrast ACL consumer guarantees in topic 9),9,recall topic 6: Terms implied by statute,.au/au/legis/nsw/consol_act/soga1923128/ Sale of Goods Act 1923 (NS

16、W) What terms are implied? implied terms as to title: section 17 implied terms in sale by description: section 18 implied terms as to quality or fitness: section 19 implied terms in sale by sample: section 20 (NOTE: if a term is implied, action lies for breach of contract NOT for breach of SOG Act:c

17、ontrast ACL consumer guarantees in topic 9),10,recall topic 6: Terms implied by statute: can they be excluded? NO if consumer sale,.au/au/legis/nsw/consol_act/soga1923128/ Sale of Goods Act 1923 (NSW) Conditions and warranties in contracts for consumersales: section 64 (1) Any p

18、rovision in, or applying to, a contract for a consumer sale and purporting to exclude or restrict the operation of all or any of the provisions of sections 18, 19 and 20 (section 19 (4) excepted) or any liability of the seller for a breach of a condition or warranty implied by any provision of those

19、 sections is void. Definition of consumer sale: section 62 In this Part, consumer sale means a sale of goods (other than a sale by auction) by a seller in the course of a business where the goods: (a) are of a kind commonly bought for private use or consumption, and (b) are sold to a person who does

20、 not buy or hold himself or herself out as buying them in the course of a business.,Claim against retailer: contract implied terms,11,David Jones v Willis (1934) 52 CLR 110,Student case presentation this week,Retailer liability: statutory implied terms,David Jones v Willis (1934) 52 CLR 110 Relevant

21、 facts Key legal issue/s Legal principle/s,12,Claim against retailer + manufacturer Tort? Contract? Statute?,13,Grant v Australian Knitting Mills Limited 1935 UKPCHCA 1 ; (1935) 54 CLR 49,Student case presentation Week 13,national protection for consumers Trade Practices Act 1974,“In consumer transa

22、ctions unfair practices are widespread. The existing law is still founded on the principle known as caveat emptor meaning let the buyer beware. That principle may have been appropriate for transactions conducted in village markets. It has ceased to be appropriate as a general rule. Now the marketing

23、 of goods and services is conducted on an organised basis and by trained business executives. The untrained consumer is no match for the businessman who attempts to persuade the consumer to buy goods or services on terms and conditions suitable to the vendor. The consumer needs protection by the law

24、 and this Bill will provide such protection.” Commonwealth Parliamentary debates Senate vol 57 pp1013-14,consumers and the lawnational consumer protection legislation,Consumer protection mainly dealt with by State laws e.g. Sale of Goods Act 1923 (NSW); Contracts Review Act 1980 (NSW); Fair Trading

25、Act 1987 (NSW) etc BUT Commonwealth Parliament moved into consumer law when it enacted the Trade Practices Act 1974 Main head of power relied on for the consumer protection provisions is the corporations power in s. 51(xx) of the Constitution. recall topic 1: legislative power of the Commonwealth Pr

26、ovisions also extended to individuals: engaging in interstate trade: s. 51 (1) in the territories (s. 122) using postal, telephonic and other like services (s. 51(v) remaining gaps filled by State legislation,15,TPA wider than SoGActsrepealed provisions: applied in cases pre-2011,16,Note: TPA implie

27、d terms based on terms implied by Sale of Goods legislation in States and Territories,TPA wider than SoGActs repealed provisions: applied in cases pre-2011,17,Claim against manufacturer/importer: statutory liability,18,Rasell v Garden City Vinyl and Carpet Centre Pty Ltd (1991) ATPR 41-152,Student c

28、ase presentation this week,Manufacturer/importer: statutory liability,Rasell v Garden City Vinyl and Carpet Centre Pty Ltd (1991) ATPR 41-152 Relevant facts Key legal issue/s Legal principle/s,19,Claim against retailer + manufacturer: fitness for purpose?; merchantable quality? misleading conduct?,2

29、0,Crago v Multiquip Pty Ltd (1998) ATPR 41-620,Student case presentation week 13,Claim against retailer + manufacturer: fitness for purpose?; merchantable quality? misleading conduct?,21,Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 41-537,Student case presentation Week 13,BUT problems of con

30、sumer protection laws in a federal system.,22,multiple consumer laws multiple consumer protection agencies,Inquiry into Australias consumer policy framework,Established December 2006; final report 8 May 2008 gaps and inefficiencies Recommendations: a single national consumer law based on TPA to appl

31、y in all states and territories a national approach to product safety laws and enforcement national law guaranteeing consumer rights when buying goods and services (replace existing laws on conditions and warranties) national laws on unfair terms in consumer contracts additional enforcement powers t

32、o regulators,23,24,New penalties and enforcement powers CLAW5001 topic 3 New national law guaranteeing consumer rights when buying goods and services (replaces existing laws on conditions and warranties) CLAW5001 topic 9 New national product safety law and enforcement system New national law on unfa

33、ir contract terms in standard form contracts CLAW5001 topic 10,From 1 January 2011,25,from 1 January 2011,one consumer law multiple consumer protection agencies,Educating businesses and consumers about the new law,“The ACL is a substantial advance on the fragmented statutory consumer law that we had

34、. It takes Australia from the middle ranks to near the top in international standing. It provides clear safeguards for consumers, greater consistency and efficiency for business, and effective enforcement means for the ACCC and State and Territory fair trading agencies.”Rod Sims - ACCC news release

35、# NR 015/12 10 February 2012,26,New website about the ACL .au New video for businesses that provides an overview of the ACL produced by the South Australian Office of Consumer and Business Affairs ,consumer guarantees,27,recall topic 2: finding statute law,Competition and Consumer

36、 Act 2010 (Cth) was called the Trade Practices Act 1974 (Cth) until renamed as from 1 January 2011 available online at .au/au/legis/cth/consol_act/caca2010265/ Where can you find the consumer provisions in the Competition and Consumer Act 2010 (Cth)? Need to look to Schedule 2 o

37、f the CCA where is Schedule 2?,28,Compare: new and repealed provisions,29,CLAW5001 Topic 9 Product Liability under statute,Compare: new and repealed provisions,31,Consumer Guarantees (ACL Part 3-2 Division 1 ) From 1 January 2011 the ACL creates a single national set of statutory guarantees for cons

38、umers Basic protection for consumers who acquire goods and services from Australian suppliers, importers or manufacturers ACL provisions replace the Commonwealth/State/Territory system of implied conditions and warranties The ACL changes the form but not the intent of the law that applies to consume

39、r purchases of goods and services,Consumer guarantees,New Law/Old cases?,Sale of Goods Act 1923 (NSW):David Jones v Willis; Grant v Australian Knitting Mills Trade Practices Act 1974 (Cth): Rasell v Garden City Vinyl and Carpet Centre Can we use these cases with the Australian Consumer Law? Some of

40、the wording/language in the repealed provisions in the TPA and state and territory legislation dealing with implied terms in consumer contracts is used in the ACL. Case law interpreting and applying the previous legislation will therefore continue to be relevant to the interpretation of the ACL wher

41、e the same language is used in the ACL. Principle of statutory interpretation: if Parliament re-enacts the same words, we presume they approve of the meaning given them by courts,33,Consumer Guarantees (ACL Part 3-2 Division 1 ) When do the consumer guarantees apply? the guarantees are imposed on pe

42、rsons who supply, in trade or commerce, goods and services to consumers in trade or commerce means private sales by individuals are excluded supply goods services defined in section 2 Who is a consumer ? see section 3 for definition (recall topic 1: general terms given special legal meaning in parti

43、cular contexts),Consumer guarantees,meaning of supply - wider than sale of goods and services,Section 2 (1): supply , when used as a verb, includes: (a) in relation to goods-supply (including re-supply) by way of sale, exchange, lease, hire or hire-purchase; and (b) in relation to services-provide,

44、grant or confer; and, when used as a noun, has a corresponding meaning, and supplied and supplier have corresponding meanings.,34,meaning of goods,Section 2 (1): goods includes: (a) ships, aircraft and other vehicles; and (b) animals, including fish; and (c) minerals, trees and crops, whether on, un

45、der or attached to land or not; and (d) gas and electricity; and (e) computer software; and (f) second-hand goods; and (g) any component part of, or accessory to, goods.,35,meaning of services,Section 2 (1): services includes: (a) any rights (including rights in relation to . real or personal proper

46、ty), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce; and (b) without limiting paragraph(a), the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under: (i) a contract for .the performance

47、 of work (including work of a professional nature), whether with or without the supply of goods; or (ii) a contract for . the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or (iii) a contract for . the conferring of rights, benefits or

48、privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or (iv) a contract of insurance; or (v) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or (vi) a

49、ny contract for or in relation to the lending of money; but does not include rights or benefits being the supply of goods or the performance of work under a contract of service.,36,meaning of consumer acquiring goods as a consumer,Section 3 (1): A person is taken to have acquired particular goods as

50、 a consumer if, and only if: (a) the amount paid or payable for the goods did not exceed: (i) $40,000; or (ii) if a greater amount is prescribed for the purposes of this paragraph-that greater amount; or (b) the goods were of a kind ordinarily acquired for personal, domestic or household use or cons

51、umption; or (c) the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.,37,meaning of consumerNOT acquiring goods as a consumer,Section 3(2): However, subsection(1) does not apply if the person acquired the goods, or held himself or herself

52、 out as acquiring the goods: (a) for the purpose of resupply; or (b) for the purpose of using them up or transforming them, in trade or commerce: (i) in the course of a process of production or manufacture; or (ii) in the course of repairing or treating other goods or fixtures on land,38,Note: secti

53、on 3(2) excludes certain goods from the consumer guarantees based on a particular acquirers purpose in acquiring the goods.,meaning of consumer acquiring services as a consumer,Section 3 (3): A person is taken to have acquired particular services as a consumer if, and only if: (a) the amount paid or

54、 payable for the services .did not exceed: (i) $40,000; or (ii) if a greater amount is prescribed for the purposes of subsection(1)(a)-that greater amount; or (b) the services were of a kind ordinarily acquired for personal, domestic or household use or consumption.,39,ordinarily acquired for person

55、al, domestic or household use or consumption,Not just personal use Business use as well e.g. Carpet in a nightclub (Carpet Call v Chan (1987) ATPR (Digest) 46-025) Not just goods of a kind used in households Commercial versions of domestic products as well E.g. Commercial grade, decoratively coated

56、insulation in Bunnings warehouses (Bunnings v Laminex 2006 FCA 682) Mixed use? Common sense approach E.g even though ostrich egg incubator could be used for home hobbies, if used commercially not consumer (Crago v Multiquip (1998) ATPR 41-620 ),41,Consumer Guarantees (ACL Part 3-2 Division 1 ) What

57、are the Consumer Guarantees?In relation to the supply of goods, the ACL imposes the following guarantees: a guarantee that the supplier has the right to sell the goods: section 51 a guarantee that the consumer will have undisturbed possession of the goods: section 52 a guarantee that the goods are f

58、ree from any undisclosed security : section 53 a guarantee that goods are of acceptable quality*: section 54,Consumer guarantees,acceptable quality,ACL s 54(2) goods are of acceptable quality if they are: fit for the purposes for which the goods are commonly supplied acceptable in appearance free fr

59、om both major and minor defects safe durable as a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regards as acceptable having regard to: the nature of the goods the price where relevant any statements made about the goods on any packaging or label on the goods any representation made about the goods by the supplier or the manufacturer/importer all other relevant circumstances of the supply of the goods,42,Consumer guarantees,What are the Consumer Guarantees?In relation to the supply of goods, the AC