Recent amendments to the Trade Practices Act 1974
(Commonwealth) (TPA) as part of the Australian Consumer Law (ACL)
initiative see the introduction of new statutory consumer
guarantees which come into force on 1 January 2011.
The consumer guarantees replace the existing implied conditions
and warranties under the TPA and the State and Territory fair
trading laws. As many existing terms and conditions refer to the
TPA provisions, we recommend that these should now be reviewed to
see if changes are required and to include references to the
Who is a consumer?
The ACL is Schedule 1 to the amended TPA and provides in section
'A person is taken to have acquired particular goods as a
consumer if, and only if:
(a) the amount paid or payable for the goods did not
(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 consumption; or
(c) the goods consisted of a vehicle or trailer acquired for
use principally in the transport of goods on public
Section 3(3) is a similar provision in relation to the acquiring
of services as a consumer.
Unfair contract terms
Section 23 renders a term of a consumer contract void if the
term is unfair or is a standard form contract.
Section 24 provides that a term of a consumer contract is unfair
if it would cause a significant imbalance in the parties'
rights and obligations arising under the contract, and is not
reasonably necessary to protect legitimate interests of the party
who would be advantaged by that term and if it would cause
detriment to a party if it were to be applied or relied on.
However the provisions in relation to unfair contract terms do
not apply to:
A contract of marine salvage or towage
A charter party of a ship
A contract for the carriage of goods by a ship. (Section
Prior to the introduction of the ACL there were implied terms in
contracts that goods would be of acceptable quality and fit for
their purpose. Contracts for services were subject to an implied
warranty that the services would be rendered with due care and
The implied warranties have now been replaced by guarantees
relating to the quality, fitness and suitability of goods and that
services will be rendered with due care and skill.
However, as was the case previously with the implied warranties,
the guarantees in relation to the supply of services do not apply
to services that are supplied under a contract for or in relation
to the transportation or storage of goods for the purposes of a
business, trade, profession or occupation carried on or engaged in
by the person for whom the goods are transported or stored.
The implied guarantees in relation to services also do not apply
to contracts of insurance.
The changes made are more significant in form than in substance
for those who provide transport services, merely replacing implied
warranties in consumer contracts with guarantees.
However, as many carriers' terms and conditions refer to the
TPA provisions now is an ideal time to review the wording of terms
and conditions to refer to the ACL and to check at the same time
whether other amendments are necessary.
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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