Following quickly on his
announcement of a review of the unfair contracts legislation
two weeks ago, the Minister for Competition Policy & Consumer
Affairs, Chris Bowen MP announced today a review of the adequacy of
existing laws on conditions and warranties that are implied into
consumer contracts under the Trade Practices Act
It seems the review has been brought about because of concerns
vendors are misleading consumers in their terms and conditions
as to what the consumers' entitlements are under law; and
the rise in the "extended warranty" business has led
to some retailers charging consumers for "extended
warranties" that offer no more than what the consumer has
under the TPA anyway.
However, along with the review of the unfair contracts
legislation, this review has the potential to create another area
of uncertainty and risk for organisations when entering into
contracts with consumers, especially where standard form agreements
Implied Conditions and Warranties
The TPA implies into contracts for the supply of goods and
services to consumers certain conditions and warranties. Some of
these implied terms are non-excludable and others are
non-excludable but are able to be limited. Some examples are:
In relation to goods:
an implied condition that goods supplied by description will
correspond with the description;
an implied condition that the goods are of merchantable
an implied condition that, where the purpose for which the
goods are being acquired is made known to the corporation, the
goods are reasonably fit for that purpose.
In relation to services:
an implied warranty that the services will be rendered with due
care and skill; and
an implied warranty that, where the purpose for which the
services are required is made known to the corporation, the
services supplied and any material supplied in connection with
those services will be reasonably fit for that purpose.
The Commonwealth Consumer Affairs Advisory Council
(CCAAC) will review the adequacy of the current
laws and determine whether there is a need for any amendments and,
more generally, it will consider how the operation of the statutory
implied terms can be improved.
CCAAC will also consider if there is a need in Australia for
'lemon laws' in order to protect consumers against goods
that repeatedly fail to meet expected standards in relation to
performance and quality. These laws could apply to specific goods
such as motor vehicles.
CCAAC is set to consult with specific industry stakeholders and
is scheduled to provide its report to the Minister by 31 July
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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