Australia Competition and Consumer Law- Free-Samples for Students

Question: Discuss about the Australian Consumer law. Answer: The Australian Consumer law or the ACL is the statute that deals with the issue related to trade or commerce and governs fair consumer protection for all the businesses and individuals in the country. The statute requires every individual be it a businessperson that sells products or services to individuals or be it a consumer that purchases such products or services, to be aware of their rights and obligations under the ACL. With respect to the developers contracts in relation to the individuals who are not investors, the ACL may have a substantial impact upon the same. The statute prevents the seller, businesspersons or the developers to exhibit any form of deceptive or misleading conduct in relation to the buyers or the other parties to the contract and must not incorporate any clauses that amounts to unfair terms. According to the ACL, a consumer contract may be defined as a contract where a sale or an interest in land is granted to any individual either predominantly or wholly for personal household or domestic purpose. The intent of the purchaser of such land or the interest of land is essential to assess whether a sale contract or a contract for grant of interest is a consumer contract under the ACL. In case the land purchased is not purported to be used for domestic or personal purpose, the Australian Consumer Law shall not govern the contract. In the Supreme Court of West Australia in OPR WA Pty Ltd v Marron [2016][1], the court found that if a land is used for business purpose it shall not be considered as consumer contract under the Australian Consumer Law. A sale contract is a consumer contract under the ACL if it is held for domestic or personal consumer as stipulated under Schedule 2 of the Competition and Consumer Act 2010. The ACL imposes certain restrictions on the sellers and at the same time, provides consumer guarantee to the buyers regarding the manner in which they should perform business operation. The restrictions that are imposed upon the seller include prohibition of application of unfair terms and bait advertisements, use of deceptive or misleading conduct. The paper discusses about the impact of the Australian Consumer Law with respect to unfair contract terms and misrepresentation on the sale of land. Unfair Contract term The Trade Practices Amendment (Australian Consumer Law) Act (No. 1) 2010 (the ACL)[2] was enacted for regulating the unfair terms in standard form consumer contracts. The statute has significant impact on developers contracts with respect to individuals. The statute contains provisions for unfair terms according to which any unfair terms used in the standard form of contracts shall be considered as void and unenforceable. The Contracts for sale entered into between the developer as seller and the individual as buyer is deemed as standard form of contracts unless the parties establishes otherwise. The following terms is considered as unfair terms under the ACL: terms that causes significant imbalance in the rights and obligations of the parties; terms that would affect the purchaser, both financially or otherwise, if the purchaser relies on such terms; terms that are not necessary to safeguard the legitimate interests of the developer; Further, for the purpose of determining whether any particular term is essential for protecting the interests of the developer, it is important that the developer provides evidence about the market in which they operate. The developer is also required to provide evidence related to the fiscal factors that are imposed by the financiers. Adequate evidences are also required in terms of planning schemes and other regulations of the councils that are responsible in providing the developer with a level of flexibility. The statute requires the developers to make sure that the clauses incorporated in their contracts are such that it provides discretion to the extent necessary for delivering finished products to the consumers. The developers must further ensure that the contracts does not include anything or it does not provide any additional freedom that would amount to unfair contractual terms under the newly introduced statutory provisions of the Australian Consumer Law. The new statutory provisions incorporated with respect to prohibition of unfair contract terms to be used in contracts require the parties to a contract to make transparent contracts. The sale of land contract consumers are often required to sign standard contracts, hence, the provisions relating to unfair contract terms require the consumers to enter into contracts that contains clear clauses so that it becomes easier for them to address any risks associated with the contract. The provision shall prohibit the developers from incorporating any terms that would affect the legitimate interests of the consumers. Further, the provisions of the unfair terms shall become applicable on new standard form small business contracts that either have been entered in to by the parties or have been renewed by them since 12 November 2016. According to Schedule 1, section 2 of the Australian Competition and Consumer Act 2010 (Cth), the interest of land is defined to be equal to the legal estate of land[3]. It also includes right, shares of a company owning the land, a power, or privilege, held with respect to a land, including further, the occupancy right in the land or a building erected on it. Business contracts are not subject to the statutory provisions of the Australian Consumer Law. This is because the applicability of the provisions in relation to unfair terms is only confined to standard form of contracts. Nevertheless, section 27(1) of the Act stipulates that a standard form of contract must not establish the contrary[4]. It is on the seller to prove that the contract was subject to negotiation. For the courts to determine a standard form of contract, must have regards to the factors that are provided under section 27(2) of the ACL as all the contracts are considered as standard form of contract provided the seller establishes the contrary. In Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) the court held that if a contract has been negotiated by the parties it must not include any term that may constitute an unfair term and be detrimental to the purchaser relying on such term. The businesses must not incorporate any terms into the contract that violates the rights of a party excluding the restricted terms at the time of entering into a sale of land contract. The contract must not include terms that provide that only one party be entitled to rescind the contract, or any terms that imposes penalties only on one party; or any other clauses that allows unilateral variation of interest in land. It must not include any terms that prohibit either party from exercising his/her legal rights against another party to the contract. Again, in Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) the court rules that a contract, which has been subject to negotiation, cannot incorporate a term that shall be considered as an unfair terms. In ACCC v Bytecard Pty Ltd 2013, the court ruled in favor of the Australian Completion and Consumer Commission against the defendant company with respect to the sale of an interest in land. This is the first case where the relevant provisions relating to the newly incorporated unfair contract terms under the ACL were duly applied for the first time. It is essential for the developers to ensure that they have adequate knowledge regarding the rules that have been imposed on them provisions relating to unfair contract terms under the ACL to prevent incorporation of unfair terms in a contract. In case the court is of the opinion, that the term of a contract is unfair, the aggrieved parties must be entitled to terminate the contract on the ground of violation of the rights. However, if there is a scope that a contract can be enforceable even after the removal of the unfair terms from the contract, the court shall order to remove such unfair term and declare that the contract shall continue to have binding effect upon the parties. The kind of contracts that becomes applicable to the provisions of unfair terms in context of property are the contracts for the sale of land by the developers[5]. Such developers intend to use the property for residential purposes or use such property as their primary place of residence. In case of lease contracts, those leases that have been provided for domestic purpose or personal use are governed under the provisions of section 24 of the Australian Consumer Law. Any interest vested to an individual with respect to a land for domestic purpose such as easements are also governed under section 24 of the Act[6]. Therefore, any contract that is regarded as a standard form of contract, it shall become subject to the section 24 of the ACL that prohibits incorporation of unfair terms in a contract. If the terms of the contract purports to cause imbalance in the rights and duties of the parties and signifies detrimental effect in relation to the legitimate interests of the purchasers, such terms shall amount to unfair terms and must be excluded from the contract. Misrepresentation According to section 18 of the Australian Consumer law, no person engaged in trade or commerce is permitted to conduct in any manner that is deceptive or is misleading in nature or is likely to conduct in a deceptive or misleading conduct. In Williams v Pisano[2015]NSWCA 177, the issue before the NSW Court of Appeal was to determine whether a seller of a private home who admitted that he had committed misrepresentation regarding the quality of the house was liable for conducting misleading and deceptive conduct stipulated under statutory provisions of the Australian Consumer Law. The court had regards to the proportionate liability regime as provided by Part VIA of the statute while settling the issue[7]. In this case, the seller of the property was the owner of the building, which signifies that the owner shall be responsible for any defects that may arise out of the work carried out, by the owner in relation to the building. The seller and his wife were the owner of the plot for many years, which they decided to renovate. The wife supervised the refurbishing that was being conducted by the builder, which she hired along with some consultants but she did not supervise the architectural work conducted by the builder. When they gave an advertisement for selling the property and hired a real estate agent, the wife introduced herself as the project designer of the house. The sellers and agent convinced the purchaser that the renovation work was conducted effectively and sold the house. After the sale, then purchaser noticed significant defects as significant as, water penetration issue in the house that arose because of the short cuts used by the builder while renovating the house. The Court held that the defendants were liable for paying damages worth $1.2 million. The judge asserted that the wife infringed the warranties for which she was accountable being the owner of the building. The purchaser made a further claim under the provisions of ACL that the husband was not accountable for the warranties[8]. It was held by the judge that William made representation with respect to the claim, and the representation was made with respect to trade and commerce hence, a penalty of $1.7 million was imposed upon the husband. The court found that each of the vendors was entitled to joint liability. In Taco Co of Australia Inv v Taco Bell Pty Ltd (1982), the court was of the opinion that with respect to sale of land, the rules of misrepresentation shall be applicable to the vendors of land. This decision was followed by the judge against the appeal made by the husband on the ground that the representation made by the vendor was not within trade or commerce hence the ACL was not applicable under such circumstances. In Australian Equity Investors, an Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011][9] the court ruled out that the provisions stipulated under Section 30 of the ACL had been infringed. The violation was caused in relation to valuation on the ground that it made misleading and false statement related to the price that was payable in relation to the land. In Given v Pryor (1979)[10], the court provided an explanation about misrepresentation and misleading conduct. In this case, the court found that representation is not merely confined to verbal statement but also extends to any form of written or oral statement, drawings, maps and words, plans, photographs and gestures and other conducts. Any person who remains silent about any a fact shall also be deemed as misrepresentation where silence can have a negative impact on the purchaser, in particular, under the mentioned circumstances. Further, in Latella v LJ Hooker Ltd(1985)[11] it was found by the court that it is not mandatory bring a legal action against any person who made a representation. In fact the plaintiff is entitled to bring a claim against the defendant, provided the plaintiff is able to establish that the misrepresentation made by the defendant had a detrimental effect upon him and as a result of which the plaintiff had suffered loss[12]. Furthermore, in Given v CV Holland (Holdings) Pty Ltd(1977)[13] the court held that a false representation may be defined as an act of providing information that is completely inconsistent with or contrary to the original facts[14]. Thus, where the wrongdoer makes a false representation, it is sufficient to establish that the defendant has provided wrong or false information; it does not matter whether the wrongdoer had intended to make such false representation, that is, the intention of the wrongdoer is not necessary to establish the claim of false representation. Therefore, even if a land seller believes that the information being provided by them is true, it would not discharge the seller of the land from the liability that he becomes subject to for providing false misrepresentation. The aggrieved persons are entitled to several remedies in case of contravention of section 18 of the ACL. The aggrieved either may claim damages under section 236 of the Act or may obtain an injunction order from court. In addition to these remedies, the aggrieved persons are entitled to several remedies in case of contravention of section 18 of the ACL. Thus, the businesses must be careful about the fact that while entering into contracts with the consumers the contracts do not entail any unfair terms and any misleading or deceptive conduct is prevented, ensuring fair trade practic Reference list ACCC v Bytecard Pty Ltd 2013 Australian Competition and Consumer Act 2010 (Cth) Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011] FCA 442 Director of Consumer Affairs Victoria v AAPT Ltd (Civil Claims) [2006] VCAT 1493 Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) Given v CV Holland (Holdings) Pty Ltd(1977) 29 FLR 212 Given v Pryor (1979)[1979] 39 FLR 437 Greenwood, Verity, and Larry Dwyer. "Consumer protection as essential to destination competitiveness."CAUTHE 2015: Rising Tides and Sea Changes: Adaptation and Innovation in Tourism and Hospitality(2015): 486. Knake, R. N. (2014). Legal Information, the Consumer Law Market, and the First Amendment. Latella v LJ Hooker Ltd(1985) 5 FCR 146 Latimer, Paul. "Protecting Consumers from Unfair Contract Terms: Australian Comparisons." (2016). Miller, RV 2013, Millers Australia Competition and Consumer Law Annotated, 35th ed, Thomson Reuters, Pyrmont, New South Wales. Nahan, N., and Eileen Webb. "Unfair contract terms in consumer contracts."Consumer Law and Policy in Australia and New Zealand. 2013. Supreme Court of West Australia in OPR WA Pty Ltd v Marron [2016] WASC 395 Taco Co of Australia Inv v Taco Bell Pty Ltd (1982)[1982] 2 TPR 48 Trade Practices Amendment (Australian Consumer Law) Bill (No.2) 2010 Williams v Pisano[2015]NSWCA 177 [2016] WASC 395. Trade Practices Amendment (Australian Consumer Law) Bill (No.2) 2010Australian Competition and Consumer Act 2010 (Cth). Australian Competition and Consumer Act 2010 (Cth) Knake, R. N. (2014). Legal Information, the Consumer Law Market, and the First Amendment. Australian Competition and Consumer Act 2010 (Cth). Australian Competition and Consumer Act 2010 (Cth). Greenwood, Verity, and Larry Dwyer. "Consumer protection as essential to destination competitiveness."CAUTHE 2015: Rising Tides and Sea Changes: Adaptation and Innovation in Tourism and Hospitality(2015): 486.[2011] FCA 442. [1979] 39 FLR 437. [1985] 5 FCR 146. [1985] 5 FCR 146. [1977] 29 FLR 212. [(1977] 29 FLR 212.