Australia: Goodbye Trade Practices Act - Hello Competition and Consumer Act: What you need to know about the new look

Competition and Trade Practices Update - Part 1
Last Updated: 10 March 2011
Article by Laura Hartley

From 1 January 2011, the Trade Practices Act 1974 (TPA), a key feature of the Australian commercial law landscape, was replaced by the Competition and Consumer Act 2010 (CCA).

In addition to a name change, there are a number of other significant changes that businesses need to be aware of under the CCA, including the commencement of the new Australian Consumer Law – a national set of consumer protections.

In particular, these changes will require businesses to ensure:

  • their consumer contracts and terms and conditions do not conflict with the new consumer guarantee provisions and do not include unfair terms;
  • their product recall procedures are amended to incorporate new recall triggers and notifications;
  • their trade practices compliance programs are updated and staff trained to ensure compliance with the CCA.

Restructure of Act

While the anti-competitive provisions of the former TPA remain the same and still sit within Part IV of the body of the CCA itself, almost all of the former consumer protection provisions (which used to be located in Parts IVA, V, VA, VB and VC of the TPA) have now been renumbered and moved for the most part to Schedule 2 of the CCA. Schedule 2 of the CCA has been named the Australian Consumer Law (ACL).

A uniform consumer law

The ACL has also been enacted by each of the States and Territories. It will replace the consumer protection provisions which had previously been found in each of the State and Territory Fair Trading Acts. This means that in practice, consumer protection laws will apply consistently now throughout each State and Territory in Australia.

Importantly, in practice this also means that the ACL applies not just to corporations (and individuals who are knowingly concerned in the acts of those corporations) but also to individuals acting in their own right and other types of organisations, such as sole traders and partnerships.

Substantive changes to the law

The ACL introduces a number of new provisions including:

  • a new regime prohibiting unfair contracts;
  • new national provisions regarding unsolicited consumer agreements;
  • a uniform national set of consumer guarantees;
  • a single national product safety regime.

This article discusses these changes.

Unfair contracts provisions incorporated into the ACL

The TPA was amended last year to include a new law that unfair terms in consumer contracts are void. These amendments are now found within sections 23 to 28 of the ACL. Essentially, a "consumer contract" is a standard form agreement for the supply of goods or services that are wholly or predominantly for personal, domestic or household use or consumption. A term in a consumer contract is unfair if it:

  • would cause a significant imbalance in the parties' rights and obligations arising under a contract;
  • is not reasonably necessary to protect the legitimate business interests of the supplier; and
  • would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

Unsolicited consumer agreements

New provisions regarding unsolicited consumer agreements also came into force on 1 January 2011. These replace State and Territory laws dealing with door to door sales and direct marketing.

An unsolicited consumer agreement exists where the following four elements are present:

  • the agreement is for the supply of goods or services to a consumer; and
  • the agreement is made as a result of negotiations (i.e. discussions) between a dealer (which includes any sales representative, sales agent or independent contractor of a supplier) and the consumer:
    • in each other's presence at a place other than trade premises; or
    • by telephone; and
  • the consumer has not invited the dealer to approach or telephone them; and
  • the total price of the sale is over $100 or cannot be determined at the time of the sale.

The ACL imposes the following key obligations on dealers who supply goods and services by way of unsolicited consumer agreement:

  • restricted calling hours: the dealer must not call on a consumer for the purposes of negotiating an unsolicited consumer agreement on Sundays and public holidays or outside the hours of 9:00am and 6:00pm (on weekdays) and 9:00am and 5:00 pm (on Saturdays) (section 73);
  • disclosure requirements at the time of contact: the dealer must:
    • prior to the commencement of negotiations with the consumer, disclose their identity, including their address, and the purpose of the call, being to negotiate the supply of goods or services (section 74 of the ACL and 82 of the Regulations); and
    • o leave the premises immediately on request;
  • disclosure requirements prior to execution of an unsolicited consumer agreement: prior to reaching any agreement, the dealer must:
    • disclose information about the cooling off period (section 76);
    • ensure the front page of the agreement includes certain prescribed statements (section 79).

Under section 82 of the ACL, a consumer has a 10 day cooling-off period in which to terminate an unsolicited consumer agreement. This cooling-off period extends to a cooling-off period of three months if a dealer has negotiated outside the permitted hours, fails to disclose their identity in the manner required under the ACL or continues to negotiate after the occupier of a property has requested that negotiations cease.

The cooling-off period can extend to 6 months in certain additional circumstances, such as where the dealer has not disclosed information about the original cooling-off period (as required under section 76).

Contravening the express supplier obligations of the unsolicited sales laws can result in criminal penalties of up to $50,000 for bodies corporate and up to $10,000 for persons other than bodies corporate. Contraventions of the unsolicited consumer agreements provisions of the ACL can attract injunctions, damages, compensatory orders, non-punitive orders and adverse publicity orders. The provisions are also subject to civil pecuniary penalties of up to $50,000 for bodies corporate and up to $10,000 for persons other than bodies corporate, as well as disqualification orders, redress for non-parties and public warning notices.

A new regime of statutory consumer guarantees

The ACL provide consumers with a single set of consumer guarantees in relation to the goods and services they acquire as opposed to the implied warranties that applied in relation to the supply of goods and services under the TPA and under previous State and Territory Fair Trading laws. As a result, consumers have statutory remedies available to them and regulators will now have greater ability to intervene where a supplier breaches a guarantee.

There are various guarantees that apply to goods with two new guarantees. The guarantees are:

  • the supplier has the right to sell goods (section 51);
  • the consumer has a right to undisturbed possession of goods (section 52);
  • goods will be free of security interests (section 53);
  • goods will be of an acceptable quality (the goods must be fit for the purpose commonly acquired, acceptable in appearance and finish, free from defects, safe and durable) (section 54);
  • goods will be fit for any purpose which is disclosed to the supplier or for which the supplier represents they are reasonably fit (section 55);
  • goods supplied by description will correspond with their description (section 56);
  • goods will correspond with any sample or demonstration model (section 57);
  • the manufacturer will take reasonable action to ensure the reasonable availability of repair facilities and spare parts for a reasonable period after supply of goods (section 58) – this is a new guarantee; and
  • goods will comply with any express warranties given in relation to them (section 59) – this is also a new guarantee.

There are a number of guarantees that apply in relation to services, one of which is new:

  • services will be rendered with due care and skill (section 60);
  • services, and any product resulting from the services, will be fit for a disclosed purpose and that any product resulting from the services, will be of such a nature, quality, state or condition, as to reasonably achieve any desired result which a consumer makes known to the supplier (section 61); and
  • services will be provided within a reasonable time (section 62) – this is a new provision.

A person cannot exclude any of the guarantees or the remedies provided for breach of them although suppliers are able to limit liability for breach of a guarantee in respect of goods not ordinarily acquired for personal, domestic or household use or consumption.

Part 5-4 of the ACL sets out the remedies available to consumers for a breach of the consumer guarantees. The ACL categorises failure to comply with consumer guarantees into those failures that are major, and those that are not.

For example, a major failure with goods occurs when:

  • a reasonable consumer would not have bought the goods if they had known about the problem;
  • the goods are significantly different from the description, sample or demonstration model shown to the consumer;
  • the goods are substantially unfit for their normal purpose and cannot easily be made fit, within a reasonable time;
  • the goods are substantially unfit for a purpose that the consumer told the supplier about, and cannot easily be made fit within a reasonable time; or
  • the goods are unsafe (section 260 of the ACL).

Where there is a major failure to comply with a consumer guarantee, a consumer can elect to reject the goods and obtain a refund or replacement or keep the goods and obtain compensation for the reduction in the value of the goods.

If a failure of goods is not major and can be repaired within a reasonable time, the consumer cannot reject the goods and demand a refund. The consumer can instead ask the supplier to fix the problem. The supplier may then choose to provide a refund, replace the goods or repair the goods.

A Single National Product Safety Regime

The ACL introduces a single national law for consumer product safety. Importantly, the provisions introduced in the ACL regarding product recalls expand the trigger for a recall. Suppliers of consumer goods therefore need to amend recall procedures as a result.

Under the former TPA provisions, a recall was required where goods were of a kind which "would or may cause injury" to a person or where the goods failed to comply with a product safety standard. Under the ACL, where the reasonably foreseeable use or misuse of consumer goods presents a safety risk, consumer goods can be recalled compulsorily by the Federal Minister for Competition and Consumer Affairs or voluntarily by a supplier.

In light of these changes, the ACCC has also issued a new set of product recall guidelines. These guidelines provide a set of procedural requirements that businesses need to comply with when conducting a recall.

The ACL also introduces simpler notification provisions in the case of a voluntary recall.

There is also a new and onerous obligation on all suppliers to notify the government within two days of becoming aware of the death or serious injury or illness of a person which was or may have been caused by the use or foreseeable misuse of consumer goods or product related services. The phrase "serious injury" is defined to include injuries which require medical treatment under the supervision of a medical practitioner.


The introduction of the ACL has resulted in substantial changes to Australia's consumer protection regulatory framework. Businesses need to ensure that their internal trade practices documents properly reflect the new ACL, that their terms, conditions and warranties are updated so as to be compliant and also that their employees understand the obligations placed upon them under the ACL in their dealings with consumers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

This article is part of a series: Click Warranty misrepresentations – Part of the ACCC’s current focus for the next article.
Laura Hartley
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.