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SLIDE 27
Alright, let's talk about the Australian Consumer Law (ACL) and the major changes it brought
along. The ACL is like the big rulebook that sets the standards for how businesses should treat
consumers in Australia.
Key Reforms Introduced in the ACL:

New Definitions and Interpretations:

 They introduced a single set of definitions and interpretive rules to keep things
clear and consistent.
Unfair Contract Terms Law:
 There's now a national law tackling unfair contract terms to protect consumers
from tricky agreements.
Provisions on Unfair Practices and Fair Trading:
 They laid down a set of rules to make sure businesses play fair and don't engage
in practices that harm consumers.
National Consumer Guarantees:
 A set of new national rules ensuring that consumers get what they're promised
when buying goods and services.
Regulation for Unsolicited Consumer Agreements:
 They created a national system to regulate unexpected sales pitches and
agreements.
Rules for Lay-By Agreements:
 Now, there's a simple national set of rules for those lay-by plans where you pay
for something over time.
Product Safety and Information Standards:
 A new national regime for ensuring products are safe, and consumers get the
information they need.

SLIDE 28

Legislative Framework:

 The ACL is the big law of the land, replacing the consumer protection parts of previous
state and territory laws. It's managed by the Australian Competition and Consumer
Commission (ACCC) and enforced by all federal, state, and territory courts.
 It doesn't just apply within Australia; it also covers conduct by Australians or residents
abroad, as well as corporations, even foreign ones without a physical presence but with
online customers in Australia.

SLIDE 29

The ACL is like a toolkit for consumer protection, covering a range of areas:
 General rules against misleading or deceptive behavior, unconscionable conduct,
and unfair contract terms.
 Specific protections against "unfair" practices.
  Regulations for various consumer transactions.
 Laws ensuring product safety.
 Provisions for enforcement and remedies.

SLIDE 31

Example: The Smartphone Saga

Meet Alex, a tech-savvy consumer looking to buy a new smartphone. Alex goes to a local
electronics store and decides to purchase a phone from a well-known brand, Mobile Tech.
However, things take an unexpected turn.
1. Product Safety and Information Standards (ACL at Play):

 Alex, being diligent, checks for product safety standards and makes sure the phone
complies with information standards. This is thanks to the national regime set up by the
ACL to ensure products are safe, and consumers receive necessary information.

2. Unfair Contract Terms (ACL Protection):

 When Alex signs up for a mobile plan with the phone, the contract terms are fair and
reasonable, thanks to the national law tackling unfair contract terms in the ACL. No
hidden traps for Alex!

3. Misleading Advertising (ACCC Steps In):

 However, later, Alex discovers that MobileTech had run ads claiming the phone had an
unbeatable battery life, but in reality, it falls short. This is where the ACCC steps in.
They, as the guardian of fair play, investigate the misleading advertising and may take
legal action against MobileTech for breaching ACL provisions against misleading or
deceptive conduct.

4. Consumer Guarantees (ACL Assurance):

 The phone starts acting up within the first few weeks. Here, the national consumer
guarantees in the ACL come into play. Alex is entitled to a repair, replacement, or refund
because the phone didn't meet the guarantees of acceptable quality.

5. ACCC's Enforcement Role:

 Alex decides to report the issue to the ACCC, who, being proactive in consumer
protection, takes action against MobileTech for failing to meet the consumer guarantees.
The ACCC, consistent with its priorities, ensures businesses play by the rules.

6. COVID-19 Guidance (ACCC Support):

  Amid the COVID-19 pandemic, Alex faces uncertainties about contracts and commercial
dealings. The ACCC steps in to provide information and advice to both consumers and
businesses, helping them navigate these challenging times.

In this scenario, the ACL provides Alex with rights and protections, ensuring a fair and
transparent consumer experience. The ACCC acts as the watchdog, enforcing these rules,
investigating breaches, and supporting consumers and businesses in understanding and
navigating the legal landscape.

SLIDE 32

Imagine you buy a new kitchen appliance from a local retailer. After a short period, you notice
that the appliance is not working as promised and, more importantly, it poses a safety risk. In this
situation, you have a few avenues for seeking resolution.

 Immediate Seller's Liability:

First, you can hold the retailer accountable. If the appliance doesn't meet the
standards or has quality issues, the retailer, as the immediate seller, may be
responsible. This is not about proving they were negligent but rather enforcing the
agreement between you and the retailer.
 Manufacturer's Liability for Safety Defects:
Now, let's say the defect in the appliance poses a safety risk, like overheating or
electrical issues. According to the Australian Consumer Law (ACL), the
manufacturer can be held liable for such safety defects, irrespective of your
relationship with them. This is covered under Sections 138-150 of the ACL.
 Non-Compliance with Guarantees:
Additionally, if the appliance doesn't comply with guarantees related to fitness for
purpose or quality, the manufacturer can still be held accountable. This doesn't
hinge on proving a direct contract between you and the manufacturer. Section 271
of the ACL addresses this aspect.
 Liability to Seller:
In the supply chain, the retailer, too, might have recourse. If they received a
defective product from the manufacturer, they can hold the manufacturer
accountable under Section 274 of the ACL.

So, in this real-world scenario, the ACL provisions offer multiple layers of protection. Whether
it's the immediate seller or the manufacturer, there are legal frameworks in place to address
issues with defective goods, ensuring your safety and consumer rights are prioritized.

SLIDE 33

Liability of manufacturer for goods with safety defects

So, under the Australian Consumer Law (ACL), manufacturers are held accountable when their
products don't meet certain guarantees imposed on sellers supplying goods to consumers (as
discussed earlier in this chapter). Section 271 of the ACL outlines the circumstances under which
a consumer can seek damages from the manufacturer for goods that fall short of statutory
guarantees.
Reasons for Liability (Section 271):

 Not Acceptable Quality:

 If the goods aren't up to par in terms of quality (as outlined in sections 54 and
271(1)).
 Description Mismatch:
 If the goods don't match the description provided by the manufacturer (as outlined
in sections 56 and 271(3)).
 Lack of Repair Facilities or Spare Parts:
 If there's a failure to ensure that repair facilities or spare parts are available (as
outlined in sections 58 and 271(5)).
 Breach of Express Warranties:
 If there's a breach of express warranties, like those found in guarantees or
advertising material (as outlined in sections 59 and 271(5)).

Damages and Compensation (Section 272):

 In an action against the manufacturer, an "affected person" is entitled to recover damages

for:
 Any reduction in the value of the goods below the price paid or their average
retail price at the time of supply (whichever is lower).
 Any loss or damage that was reasonably foreseeable due to the failure to comply
with the specific guarantee.

SLIDE 35

Definition of "Affected Person" (Section 2(1)):

 An "affected person" broadly includes:

 The consumer who bought the goods.
 A person who got the goods from the consumer (not for reselling).
 A person who obtained ownership of the goods through the consumer.

Timeframe for Legal Action (Section 273):

 If an affected person wants to take legal action for damages, they have three years from
the day they became aware, or reasonably should have become aware, that the guarantee
was not complied with.
So, these rules essentially ensure that consumers have a pathway to seek compensation from
manufacturers if the goods they purchased fall short of the promised standards or guarantees.

Example
Imagine this scenario:
Meet Sarah, who recently bought a brand-new laptop from a popular electronics store. Excited
about her purchase, she quickly realized the laptop wasn't living up to its promises. The screen
had issues, the description didn't match its actual performance, and to make matters worse,
getting it repaired seemed like a maze.
Sarah's Rights Under the ACL:

 Quality Letdown:
The laptop wasn't of acceptable quality, falling short of what was expected
according to the standards set in the law (Section 271(1)).
 Description Mismatch:
It didn't correspond with the description provided by the manufacturer or the
store, creating a gap between what was promised and what was delivered (Section
271(3)).
 Repair Hassles:
Sarah struggled to find repair facilities or spare parts for her laptop, a clear
violation under the law (Section 271(5)).
 Express Warranty Breach:
Any guarantees or promises made in advertisements or warranties were not met,
constituting a breach under the law (Section 271(5)).

Seeking Compensation:

 Sarah, as the consumer who purchased the laptop, is considered an "affected person"
under the law (Section 2(1)).
 She's entitled to recover damages, which could include:
Compensation for the reduction in the laptop's value, either based on the price she
paid or its average retail price at the time of purchase (whichever is lower).
Compensation for any loss or damage that was reasonably foreseeable due to the
laptop not meeting the specified guarantees (Section 272).
 Importantly, if Sarah decides to take legal action, she has up to three years from the day
she became aware, or reasonably should have become aware, that the laptop didn't
comply with the guarantees (Section 273).

In this way, the Australian Consumer Law provides a clear pathway for consumers like Sarah to
seek compensation from manufacturers when the products they buy don't meet the promised
standards. It ensures that consumers have rights and recourse when things go awry with their
purchases.

SLIDE 40
Consumer's Choices and Manufacturer's Liability under the ACL
So, picture this: you buy a new gadget from your local electronics store, and unfortunately, it
doesn't quite live up to expectations. In such a situation, thanks to the Australian Consumer Law
(ACL), you, as the consumer, have some options.
Your Options:

 Suing the Immediate Seller (e.g., the Store):

 You can choose to take legal action against the store where you bought the item.
This could be your immediate supplier.
 Direct Legal Action Against the Manufacturer:
 Alternatively, you have the right to go directly after the manufacturer if the
product doesn't meet the statutory guarantees outlined in the ACL.

Manufacturer's Indemnity to the Seller (Section 274):

Now, if you decide to go after the store (your immediate supplier) instead of the manufacturer,
the ACL steps in with a rule. It says that the manufacturer must step up and cover the costs
incurred by the store because the product didn't meet certain guarantees.
Specific Guarantees Covered (Section 274(2)):

 This indemnity by the manufacturer covers costs related to guarantees such as:
 Acceptable quality (Section 54).
 Fitness for a disclosed purpose (Section 55).
 The description applied to the goods (Section 56).

Timing for Legal Action by the Seller (Section 274):

 If the store decides to take legal action against the manufacturer, they have up to three
years from the earliest of either:
 The day they made a payment related to their liability to you (the consumer).
 The day you, the consumer, started legal proceedings against the store.

So, in simpler terms, if you're unhappy with a product and decide to sue the store, the ACL
ensures that the manufacturer is on the hook for the costs incurred by the store due to the product
not meeting certain guarantees. This way, there's a sort of chain of responsibility in place to
protect consumers and ensure accountability in the supply chain.

Title: The Motorhome Fire Saga - Fulcher vs. Knott Investments

What Went Down:

Mr. and Mrs. Fulcher's brand-new Winnebago caught fire in 2004 due to an air-conditioning unit
glitch while parked in their tomato packing shed.

Taking it to Court:
The Fulchers decided to sue the dealer, the manufacturer, and the air-conditioning unit importer,
throwing in claims of negligence, contract breaches, and Trade Practices Act violations.

Negligence Dismissed:

The court ruled that the manufacturer wasn't at fault. They couldn't have known about the
electrical glitch, given the fully assembled unit and the manufacturer's clean track record.

No Breach of Warranty:

The Fulchers claimed the manufacturer broke promises about safety in the sales brochure.
However, the court said no breach occurred as the warranty didn't promise to spot hidden
defects, and the manufacturer regularly checked for safety.

Statutory Trouble:

The judge found the manufacturer guilty under consumer protection laws for making a
motorhome that wasn't fit for its purpose due to the faulty air-conditioning unit. The retailer and
importer also got their share of responsibility.

Bottom Line:

Different claims, different outcomes. Negligence and warranty claims didn’t stick, but the
manufacturer and others got caught up in the legal net due to breaches of statutory terms.

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Product Safety, Recall, and Information under the ACL
Alright, let's dive into the rules and regulations in the Australian Consumer Law (ACL) that
revolve around product safety, recalls, and the information that should come with the products.
1. Safety Standards and Offences (Sections 106 and 194):

 The ACL makes it clear that you can't sell consumer goods that don't meet safety
standards. If you do, it's considered an offence. For corporations, the penalty can go up to
$1,100,000, and for others, it's $220,000.

2. Bans and Offences (Sections 109, 114, and 197):

 The Minister has the authority to impose a ban on consumer goods that might cause
harm. Selling goods that are banned is also an offence, carrying the same hefty penalties.
This is a serious business!

3. Recall Powers (Sections 122, 123, and 127):

  The Minister can issue a recall notice for consumer goods if they could cause harm, don't
meet safety standards, or are subject to a ban. If the supplier doesn't take sufficient action
to prevent harm, they may be required to recall the goods. The Minister can even ask the
supplier to advertise that they're fixing the issue or offering refunds.
 This recall power is only brought into play if the supplier hasn't already taken effective
action. If a supplier doesn't comply with a recall notice and someone suffers harm or loss
due to a defect in the goods, the supplier is held responsible for the failure to comply.

4. Offence for Non-compliance (Section 199):

 It's crystal clear: failing to comply with a recall notice is considered an offence.

5. Defence for Suppliers (Sections 210 and 252):

 A supplier (like a retailer) has a defense if they unknowingly supplied goods that didn't
meet safety or information standards. To be off the hook, they need to show that they got
the goods for the purpose of reselling from someone in Australia, and they genuinely
didn't know about the standards issue. If they relied in good faith on the person they got
the goods from, thinking no standards were prescribed, they have a defense.

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Penalties under the Australian Consumer Law (ACL)
Alright, let's talk about the consequences businesses and individuals face if they breach the
Australian Consumer Law (ACL). It's like the price you pay for not playing fair in the consumer
world.
1. Corporate Penalties:

 For corporations that break the rules, the penalty can be pretty hefty. It's the greater of
three options:
 $10 million
 Three times the value of the benefit obtained from the offence (if the court can
figure that out)
 10% of the corporation's annual turnover during the 12 months when the offence
happened (if the court can't determine the benefit)
2. Individual Penalties:

 Individuals aren't off the hook either. If they're found guilty, they can face a penalty of up
to $500,000.

Penalty Changes Over Time:

 Before September 1, 2018, the penalties were lower. For individuals, it was $220,000,
and for corporations, it was $1.1 million. But post that date, the penalties increased.

Factors Considered in Penalties (Common Sense Stuff):

When deciding on the penalty, the court looks at a bunch of factors:

 The size of the business.
 How intentional the naughty behavior was.
 How long the wrongdoing went on.
 Whether top management was involved.
 If the company cooperated with investigators.
 Past record of similar misconduct.
 Whether the company is sorry about it.
 Financial condition of the company.
 The profits earned from the misconduct.

Court Orders Example: Coles Supermarkets:

 To give you a real-life example, when Coles Supermarkets breached the ACL, they not only got
fined $2.5 million but also faced specific orders from the court. For three years, they were banned
from making false claims about their bread products. They also had to display a notice in their
stores admitting to the misleading conduct. This was done to prevent such behavior in the future
and let customers know about the misconduct.

In a nutshell, breaking the rules under the ACL doesn't just mean paying fines. Courts can also impose
specific orders to prevent repeat offenses and make businesses come clean about their wrongdoing. So,
it's like a double whammy for those trying to bend the rules in the consumer world.
Corporate Penalties Size Matters:
The size of a business matters when we talk penalties. In a case against Apple, the court didn't go easy
just because Apple is a giant. They said even if $9 million is "loose change" for them, the penalty should
still be enough to deter such big players. It's about making them feel the sting, not just a slap on the wrist.

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Injunctions – Putting a Stop to Unlawful Acts:

An injunction is like a court's stern warning, telling someone to cut it out. If a person is about to break the
rules or is already breaking them, the court can issue an order to halt their actions. This isn't just about
stopping the main act but also preventing related actions or attempts at breaking the rules.
Who Can Ask for an Injunction?
If you've got an issue with someone's misleading practices, you don't have to be a big-shot organization
like the ACCC to ask for an injunction. Any regular person or group can knock on the court's door and
say, "Hey, this is not right, and we need it to stop!"
Damages – Paying for the Harm Done:
When someone suffers losses due to another person's rule-breaking, they can file a lawsuit to recover
those losses. Whether it's physical, psychological, property damage, or pure economic loss, the court
allows compensation for the harm caused.
Calculating Damages – Making Things Right:
When it comes to figuring out how much compensation is due, the court leans towards a tort-based
approach, focusing on actual losses suffered. Take the Wakefield Trucks case, for example, where the
court said the person deserved all the losses directly connected to the misleading information about a
vehicle's fuel consumption.

CASE STUDY Wakefield Trucks

Wakefield Trucks Pty Ltd v Lach Transport Pty Ltd [13.1070] Wakefield Trucks Pty Ltd v Lach
Transport Pty Ltd (2001) 79 SASR 517. The appellant sold the respondent a vehicle. During the
negotiations, the appellant made representations as to the vehicle’s fuel consumption that was
considerably lower than its actual fuel consumption. It was held that the respondent was entitled
to all consequential loss directly flowing from its reliance upon the representation – the
difference between the representations made regarding fuel consumption and the vehicle’s actual
fuel consumption

CASE STUDY Escape Media Pty Limited v Lawler

Escape Media Pty Limited v Lawler [13.1090] Escape Media Pty Limited v Lawler [2018] NSWCATAP
17. In 2015, Phillip Lawler purchased a two- year subscription to a magazine titled “4WD Touring
Australia” published by Escape. Between March 2015 and January 2016, Escape conducted a subscription
drive for its magazine in the form of a promotion titled “The Ultimate Escape”. The promotion offered
magazine subscribers entries into a competition or lottery to win a prize said to be valued at $151,291.
That prize consisted primarily of a four- wheel drive vehicle, a camper trailer, a boat and a boat motor as
well as camping and four- wheel driving accessories. Mr Lawler was notified that he had won The
Ultimate Escape package. Having received all components of the package, Mr Lawler claimed that the
promotional material had overstated the value of the prize package by at least $30,000. The Court held
that Lawler had suffered no loss; in fact, he had a windfall in the form of goods valued at approximately
$120,000. Certainly he was no worse off than he was before he relied on the misleading representations.
EXAMPLE
Injunctions – When the Court Says: "Stop Right There!"
Imagine you're a small business owner, and a big corporation starts spreading false information about
your products. They claim your handmade, organic soaps are made in a factory with synthetic ingredients.
Not cool, right? You can go to court and ask for an injunction, basically telling the giant corporation,
"Hold your horses! Stop spreading these lies about my soaps!" The court can order them to knock it off,
preventing further harm to your business.
Who Can Ask for an Injunction? Anyone!
Now, you might think only big organizations like the ACCC can do this, but nope! As a regular person
running your soap business, you have the right to say, "I've had enough of these false claims," and ask the
court to step in. It's like David taking on Goliath, with the court as your trusty sling.
Damages – Getting Paid for the Soap Opera:
Let's say the false claims caused customers to stop buying your soaps, and your business took a financial
hit. You can file a lawsuit to recover those losses. The court might order the corporation to pay you the
amount you lost because of their misleading statements. It's not just about your financial losses; it's about
making things right.
Calculating Damages – Making It Fair:
The court would look at how much money you lost due to their false claims. If you can show that you lost
customers and revenue because people believed their lies, the court might say, "Okay, corporation, you
need to pay up to make up for the harm you caused to this small soap business."
No Punitive Damages – Just What You Lost:
Punishing the big corporation beyond your actual losses isn't on the menu. The court won't say, "You've
got to pay extra just to teach you a lesson!" It's more about compensating you fairly for what you actually
suffered – no more, no less.
Individual Liability – Holding People Accountable:
Imagine you find out an employee of that big corporation was actively spreading these false claims,
knowing they were untrue. In addition to going after the company, you might have a case against that
individual. If they were knowingly involved in the misleading acts, they could be personally held
responsible for the damage caused to your soap business.
Timing Matters – Acting within Six Years:
You can't wait forever to take action. The law gives you a window of six years from when the false claims
started causing harm. So, if you realize the harm three years after the misleading campaign, you still have
three more years to file a lawsuit and seek compensation.
Court Powers – More Than Just Words:
Apart from stopping the false claims and compensating you for your losses, the court might have
additional tricks up its sleeve. It can issue orders to make sure the corporation takes steps to correct the
misinformation and prevent future harm to your soap business.

SLIDE 47

1. Enforceable Undertakings:

 Sometimes, the Australian Competition and Consumer Commission (ACCC) can accept a
promise from someone who broke the rules. If they don't keep their word, the court can
step in with orders to make things right.

2. Substantiation Notice:

 Ever heard a claim that sounds a bit too good to be true? The ACCC can ask someone to
prove it. If they can't, there's a penalty for not being able to back up what they said.

3. Public Warning Notice:

 If the ACCC thinks someone's up to no good and it might hurt others, they can put out a
public warning. It's like a caution sign, letting people know about the fishy business.

4. Non-Punitive Orders:

 The court can make some special orders that aren't about fines. They might ask someone
to do community service, be on good behavior for a while, or even make them change
how they do business.
5. Adverse Publicity Order:

 If someone breaks the ACL rules, the court might make them spill the beans on what they
did wrong. They might even have to pay for an ad confessing their mistakes.

6. Disqualification Order:

 If someone keeps breaking the rules and it's causing trouble, the court can stop them from
managing companies for a bit. It's like a timeout to think about what they've done.

No Expectation Loss – Real Losses Matter:

The court clarified that damages are not about what one expected but didn't get. If you pay $50,000
expecting something worth $100,000 but end up with something actually worth $50,000, there's no
recognized loss. It's about getting what you paid for.
Escape Media's Windfall:
In the Escape Media case, the court highlighted that sometimes, even if someone relied on misleading
info, they might not have suffered any loss. Mr. Lawler, for instance, got a magazine package valued at
$120,000 instead of the claimed $151,291. He ended up with more than he bargained for, turning the
situation into a bit of a windfall.
No Punitive Damages – Just Compensation:
The law doesn't allow for punitive damages under Section 236. It's about compensating for the actual loss
suffered due to someone else's wrongdoing. It's not about punishing beyond the harm caused.
Liability of Individuals – Getting Personal:
Individuals can be held liable if they're deeply involved in a company's wrongdoing. This involvement
includes aiding, abetting, counseling, or inducing the violation. To be personally liable, they must have
actual knowledge of the essential elements of the contravention.
Limitation of Actions – Timing Matters:
If you're planning to take legal action for damages, you've got a window of six years from when the cause
of action arose. The clock starts ticking when the actual loss or damage is sustained. So, it's not just about
when the agreement was made but when the impact is felt.
Additional Court Powers – Making Things Right:
Apart from injunctions and damages, the court has the authority to issue additional orders to compensate
for the damage someone suffered due to another's breach of the ACL. It's about making things right for
the victim.
And that, in a nutshell, breaks down the legal jargon into something a bit more human-readable!