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Consumers and Contracts

Contributor: Nick Seddon

Currency of information: January 2011

The Law of Contract

A contract is a legally binding agreement between two or more parties (but usually two). The law will consider a contract to be valid if the agreement contains all of the following elements:
  • an intention between the parties to create legal relations;
  • the parties must be parties to the contract and must be recognised legal entities;
  • agreement;
  • consideration;
  • the parties had legal capacity.
An agreement that lacks one or more of the elements listed above is not a valid contract.

A contract may be set aside or else be unenforceable or possibly void if
  • negotiations for the contract were defective in some way, for example, one party was vulnerable and taken advantage of or was misled;
  • it is uncertain in meaning; or
  • the agreement was affected by illegality.
Once a valid contract is in place then the parties are bound by the various obligations in the contract. If a party fails to fulfil an obligation, that party is then in breach of contract. The other party may then seek court-ordered remedies (though, of course, in the vast majority of contracts it is not necessary to go to court to enforce rights under the contract).

The remedies for breach of contract are
  • damages (the usual remedy);
  • specific performance (a discretionary remedy where a court may order a party to perform the contract);
  • injunction (a discretionary remedy where a court may order a party to stop breaching a negative obligation, for example a promise not to disclose confidential information; or may order a party to carry out a particular positive obligation, for example, to provide access to premises);
  • in some cases of breach, termination, that is, the non-defaulting party may bring the contract to a close (see Termination for Breach of Contract).

Rights Outside the Law of Contract

It is important to understand that consumer or commercial dealings between people may attract other legal consequences than those that stem from a contract. If for some reason a contract remedy is not available or is practically unhelpful, it may still be possible to find legal rights through other areas of the law. The most important areas are
  • remedies under the Australian Consumer Law (which replaced the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1992 (ACT) on 1 January 2011), particularly for misleading or unconscionable conduct; and
  • the law of estoppel.
The remedies under the Australian Consumer Law are discussed at various points in this chapter. The Australian Consumer Law is found in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (formerly the Trade Prac tices Act 1974 (Cth)). The Australian Consumer Law has been adopted as a law of each State and Territory in place of provisions formerly in each jurisdiction's Fair Trading Act. With effect from 1 January 2011, there is now one single piece of legislation instead of nine different Acts.

Estoppel

Estoppel is not further discussed but should be kept in mind in any circumstance where someone has "blown hot and cold". The law considers that a person should have a legal remedy if the following has happened:
  • A has made a representation to B or has encouraged B to adopt an assumption;
  • B acted in some material way on the representation or assumption, that is, B relied on the representation or assumption;
  • A then wished to act in a manner that was inconsistent with the representation or assumption and this would adversely affect B because of B's reliance.
In these circumstances A may be estopped (prevented) from acting inconsistently or else must take the consequences of doing so. It must be unconscionable for A to act inconsistently and this is usually the case if B has relied on the representation or assumption in some material way.

The remedy for estoppel is open-ended. A court must fashion the remedy so far as possible to undo the detriment suffered by B. This may be an order to A to act consistently with the representation or assumption; or it may be an order to pay compensation.

Estoppel is a complex area of the law. There are various types of estoppel. See generally Seddon and Ellinghaus, chapter 2 and paras 16.67-16.71.

Must Contracts be in Writing?

Under common law principles contracts do not have to be in writing. Legislation provides that some contracts must be in writing or be evidenced by a written document. These include contracts involving interests in land (for example, sale, lease or mortgage) and all contracts regulated by consumer protection legislation.

If a contract is required by legislation to be in writing and it is not, or not sufficiently, then the contract may be void, voidable or unenforceable, depending on what the legislation provides. The contract may be unenforceable by one party (the supplier) but enforceable by the other (the purchaser), particularly under consumer protection legislation.

Under the law of restitution, it may be possible to recover a reasonable remuneration for goods delivered or services rendered even though the contract is legally defective for want of writing. This again depends on the drafting of the relevant legislation that specified a written contract. See generally Seddon and Ellinghaus, paras 16.53-16.55.

However, even if writing is not a legal requirement, it is always advisable to have the terms agreed between the parties written down and attached to, or kept with, any other relevant papers; for example, copies of quotations, brochures, pamphlets, that were supplied at the time the contract was entered into. Receipts for money paid should always be kept. If a dispute arises, these documents may assist in resolving differences between the parties. For example, a private purchase and sale of a car does not have to be in writing but it is a good idea to record the essential terms of the transaction.

A written contract can be drawn up by listing all the terms agreed between the parties and getting each of the parties to sign and date the document at the end.

Elements of a Contract

A contract does not exist simply because there is an agreement between people. The parties to the agreement must intend to enter into a legally binding agreement. This will seldom be stated explicitly but will usually be inferred from the circumstances in which the agreement was made.

Intention is simply not an issue in any consumer contract or in any of the ordinary contracts that people make in their lives such as entering into a lease, buying a ticket for a sports event or for travel, selling or buying goods through the internet or a purchase or sale of a car.

Intention can be an issue when domestic or friendly arrangements are made where it may be arguable that they were not intended to be a legally binding contract. For example, a house-sharing arrangement amongst friends may raise this issue. It is usually best to agree on whether such an arrangement is intended to be a contract or just a friendly understanding.

Who are the parties? -- the privity rule

It is important, firstly, to make the point that the parties to a contract are the only parties that can benefit from it or are bound by it. It is usually straightforward to identify which parties are parties to a contract but this is not always absolutely clear.

If a contract purports to confer a benefit on a party who is not a party to the contract (a third party), then a basic principle -- called the privity rule -- comes into play. A third party cannot enforce any benefit which it was intended by the contracting parties the third party should obtain. Equally, it is not possible by a contract to impose an obligation on a third party.

The privity rule sometimes causes inconvenience or even injustice. For example, in the compulsory insurance that must be taken out when one registers one's car, the insurance policy protects the owner for possible liability for negligence causing personal injuries or death. Suppose the person who is a party to the insurance policy lends the care to a friend. Is the friend protected by the policy? The privity rule would say No. This has been changed by legislation because the policy behind compulsory insurance of this kind is to ensure that injured persons can recover damages.

There are other modifications to the privity rule brought about by legislation. The same modification in respect of liability insurance generally (not just for driving) has been made by the Insurance Contracts Act 1984 (Cth) s 48. This means that if an insurance company provides insurance to cover the party who paid for it and her or his family members as well, a family member could enforce the policy even though not a party to the insurance contract.

A party to a contract must be
  • an individual;
  • a corporation; or
  • a government.
The concept of legal entity is important for two reasons: it is essential to identify who it is you are dealing with; and it is not possible to make a contract with yourself.
A. Identifying the party

It is not always clear who or what a party is. A community organisation may have a name but its status as a legal entity may not be clear; governments use names (like AusAID); individuals and corporations use trading names; and sometimes there are complications because a party may be called a trust. Ultimately, whatever the "front" a party has, it must be one of the three recognised legal entities listed above.

A community organisation may be an unincorporated association in which case it is not a legal entity. It cannot make contracts. Such an organisation can become a corporation under State and Territory associations incorporation legislation (see Part 60 at (60.3)) and then has "Inc" in its name.

Corporations usually are incorporated under the Corporations Act 2001 (Cth) in which case their names include either "Pty Ltd" or "Ltd" and each company has a unique Australian Company Number (ACN). Or they may be government corporations incorporated under their own specific legislation (like the ANU, CSIRO or the National Gallery). There are other types of corporations under specific legislation (for example, cooperatives and bodies corporate associated with blocks of flats) but the commonest types of corporations are the ones discussed above.
B. Agents

Consumers dealing with retailers, banks, government departments, petrol stations, used car dealers, real estate agents and so forth are contracting with the relevant company (or government) and not with the individuals they actually talk to. In law the individuals who "front" for companies, governments, community incorporated associations are agents.

Generally, the person dealing with an organisation does not have to be concerned whether an individual apparently acting as an agent has authority to act for the company, government or association. The person can rely on appearances so that, if there is no reason to think that the other party is acting without authority, then that individual is deemed to have authority (called "ostensible" or "apparent" authority). In this way the organisation cannot avoid responsibility for what its people say or do. This is provided for in ss 128-9 of the Corporations Act 2001 (Cth) which, in turn, reflects the common law. So the same rules about authority apply whether one is dealing with a company or a government body.
C. Must be two different parties

It is not possible to make a contract with yourself. This sounds obvious but can be a problem from time to time. In government, the problem arises when a Commonwealth department makes an agreement with another Commonwealth department. This cannot be a contract because each department is just the legal entity known as the Commonwealth.

Generally this requirement of separateness of the parties to a contract is not a practical problem in ordinary day-to-day contracts.

Agreement, Offer and Acceptance

A contract is formed when the parties are taken to have agreed. It is the moment of agreement that prior negotiations, preliminary exchange of ideas or proposals, bargaining, discussions become a legally binding contract. This is usually demonstrated when an offer by one party is accepted by the other party.

This basic proposition means that people should be very careful in their dealings with each other. If A makes an offer to B, then B has the power (by accepting) to bind A in a contract. Similarly, once a person has accepted, he or she is legally bound and cannot go back unless the other party allows the person who accepted to pull out.

An alternative model

The usual model for ascertaining whether the parties have reached agreement is the offer-acceptance analysis. But this is not the only way. The courts recognise that parties often deal with each other in ways that are not very precise and cannot be pinned down to ascertainable offer and then acceptance of that offer.

It is possible to find acceptance by conduct rather than by the usual way of a person saying "I accept your offer" or else signing a written contract. It is also possible, when there is no ascertainable offer and acceptance, to infer the existence of a contract from the conduct of the parties looked at as a whole.

The consequence of this "looser" analysis is, again, that parties dealing with each other should be careful. Above all, it is very important to be very clear about what is intended and when a commitment to contract takes place. A failure to do this may mean that a person is legally bound to a contract without realising it. There are many cases in the law reports where the basic issue to be resolved was: have the parties committed to contract or were they still negotiating? If the former then each party is legally bound; if the latter then neither party is bound by a contract.

Offer

An offer must be distinguished from mere willingness to deal or negotiate. For example, X offers to make and sell to Y calendars featuring Australian paintings. Before any agreement is reached on size, quality, style or price, Y decides not to continue. At this stage, there is no legally binding contract between X and Y because there is no definite offer for Y to accept until the essential terms of the bargain have been decided.

An offer need not be made to a specific person. It may be made to a person, a class of people, or to the whole world (such as the offer of a reward).

An offer is a definite promise to be bound, provided the terms of the offer are accepted. This means that there must be acceptance of precisely what has been offered. For example, A offers to sell B a Holden panel van for $1,000, "as is". If B decides to buy the Holden panel van, but insists on a roadworthy certificate from the NRMA being provided, then B is not accepting A's offer. Rather, B is making a counter offer. It is then up to A to accept or reject the counter offer.

A person can withdraw an offer which has been proposed prior to that offer being accepted. For withdrawal to be effective, the person who has proposed the offer must communicate to the other party that the offer has been withdrawn. To continue the example above, A may arrange to let B know by lunchtime whether A agrees to B's counter offer. If, while waiting for a reply, B decides not to buy the Holden panel van and tells A of this change of mind, then there can be no binding contract because B's (counter) offer has been withdrawn.

Acceptance

Acceptance occurs when the party answering the offer agrees to the offer by way of a statement or an act. Acceptance must be unequivocal and communicated to the offeror: the law will not deem a person to have accepted an offer merely because he or she has not expressly rejected it.
A. Signature

The most obvious way of committing to a contract is by signing. The law reflects the popular understanding about the significance of signature. If someone signs a contract without reading it, then that person is bound and it is no argument to say that he or she did not realise that the contract contained some clause that is not to their liking.

Conversely, signature is not necessary for commitment to a contract even though there is a document that has a place to sign. Acceptance by conduct has been mentioned above and it is quite possible for a person who did not sign a contract (which was supposed to be signed) to be bound by it if he or she has indicated by conduct that the deal is going ahead.
B. Unsigned contracts -- "ticket" cases

Not all written contracts are supposed to be signed. An example is an airline ticket or a public car park docket. The terms may be on a ticket or may be displayed on a sign or wall. The law takes a somewhat pragmatic approach to the question whether the customer has accepted the terms. The customer is taken to have agreed so long as the customer had an opportunity to read the terms and did not object to them. This rule means that the terms must be available for scrutiny before the contract is made. The rule takes little account of the fact that no-one actually reads the terms or would have almost no time to read them if he or she tried to. Some allowance is taken of this if an exclusion clause is in a ticket (see Exclusion of Responsibility Terms).

Legislative modifications to rules of offer and acceptance

Some legislative modifications to the rules of offer and acceptance have been made to protect consumers. For example some legislation allows a consumer who has accepted an offer (and thus made a binding contract) to nevertheless pull out of the contract (called a "cooling-off period"). An example is under the Australian Consumer Law provisions applying to unsolicited consumer agreements (see Terminating unsolicited consumer agreements ("cooling off period")).

As already noted, it is possible for an offer to be accepted by the conduct of the party to whom it was made. Unscrupulous companies used to take advantage of this by sending unsolicited goods by mail and then, if the goods were used or not rejected, this was taken to be acceptance. This problem is taken care of by s 41 of the Australian Consumer Law which provides that the goods become the property of the recipient free of any obligation to pay 3 months after they have been received. This period can be shortened to 1 month if the recipient sends a notice to the company which sent the goods that complies with s 41(5). The company is also permitted to take back the goods before the expiry of the period.

Consideration

Consideration is the "price" paid for the promise or promises of the other party. Fundamentally, consideration requires that the agreement that has been reached constitutes an exchange between the parties. Contrast
  • I promise to deliver a ton of gravel to you next Friday and you agree; with
  • I promise to deliver a ton of gravel next Friday, payment on delivery, and you agree.
The first agreement is not a contract. It is a gift promise which, unless embodied in a deed under seal, is not legally enforceable.

The second agreement is a contract so long as the price can be ascertained (the seller's usual price is enough). The second agreement is initially just an exchange of promises and those are the consideration moving from each side. People often make the mistake of thinking that consideration is the money or goods or services. These are performance of the contract.

The price must be something of value, although it need not be money. As just noted, it usually is the counter-promise or promises provided by the other party. Consideration may be some right, interest or benefit going to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other party.

In most contracts consideration is not an issue because there is always an exchange contemplated by the agreement.

So long as consideration exists, the court will not question its adequacy, provided that it is of some value. For example, the promise to pay a peppercorn in return for the lease of a house would be good consideration. Of course, the consideration must not be illegal or impossible to perform.

There is another way to make a legally binding obligation: documents under seal (called "deeds") do not require consideration for there to be a binding promise. However, deeds are used primarily in business and so are not discussed further in this chapter.

The law requires that a party to a contract has capacity to enter a contract. This means that the person is recognised in law as being able to commit to a contract. Most people and companies have capacity and so in the vast majority of contracts this is not a problem. In the following circumstances, capacity to contract may be an issue:
  • people who have a mental impairment;
  • young people (see below)
  • bankrupts;
  • corporations (people acting on behalf of a company); and
  • prisoners.

People who have a mental impairment

Generally speaking, people are free to enter into contracts even though they may have a mental impairment, or be temporarily disabled by drugs or alcohol. They are, however, sometimes vulnerable to being bound by contracts they do not fully understand. The question of capacity to make the contract often arises only after the contract is in place.

People with disabilities and their advocates will find some protection in the rule that a contract is not valid and enforceable unless there was genuine consent to its making. This is discussed further at Undue influence and unconscionability.

Capacity to give consent involves a general understanding of the nature of the contract (not necessarily its fine details). A person with a mental impairment, for example, may have the capacity to understand some contracts (for example, buying a loaf of bread), but not to understand other, more complicated contracts (for example, buying a car on credit). The law recognises that people with impaired capacity nevertheless must be able to purchase the necessities of life, for example, food, clothing, accommodation, medical services and so forth. The Sale of Goods Act 1954 (ACT) s 7(2) provides that a reasonable price must be paid for necessary goods sold to someone with a disability. What are "necessaries" and the rules applicable here are dealt with under Young people (because the definition is the same for both groups).

Where a person with a disability did not understand the general nature of the contract, a court can intervene to set aside the contract only if
  • the other party knew, or ought to have known, of the disability or lack of capacity; and
  • the person with the disability can give back most of the benefit he or she received under the contract, and
  • the benefit received by the disabled person has not been sold to a third party who did not know the previous transaction might not be valid.
Generally, to escape the consequences of a contract, the other party should be notified of the intention not to be bound by the contract within a reasonable time.

If the contract was made during a period when the person was able to understand it (legally termed a lucid interval), the contract will be binding even though the other party knew of the disability.

Some people with disabilities (temporary or long term) are assisted by a manager appointed under the Guardianship and Management of Property Act 1991 (ACT). For further information on the role of a manager, see DisabilityAndGuardianship. People with disabilities who have a manager appointed to act on their behalf are generally not free to enter into contracts, unless this is approved in writing by their manager or by an order of the ACT Civil and Administrative Tribunal (previously the ACT Guardianship and Management of Property Tribunal).

Young people

The term young person is used here to refer to anyone under the age of 18 years (s 5 of the Age of Majority Act 1974 (ACT)). Sometimes, legal writing refers to "minors"or "infants", although the latter is now unusual.

The exact capacity of young people to bind themselves and be bound by contract is limited but it is also not clear, because no legislation completely covers this area of law. The law is overly complicated. Only in New South Wales has the law been rationalised in a sensible way. See Seddon and Ellinghaus, chapter 17.
A. Binding contracts and young people

Contracts for the supply of necessaries will generally be binding. There are no hard and fast rules to identify what is a "necessary", but it does include the sorts of things the young person needs to live a reasonable lifestyle, so that it includes basics such as food, clothing, a place to live, medicine, and so on. It will also include any contracts relating to the young person's education, apprenticeship or training, if it can be shown to be of benefit to the young person. Whilst a court has not yet considered the issue specifically, mobile phones are probably not necessaries. The young person contracting in this situation will be held bound to pay a reasonable price (although that may not be the contract price) for necessaries actually sold and delivered. ("Delivery" is a technical term. Generally, delivery takes place when the seller has given the buyer the power to take the goods away.) Where necessaries have been sold but there has been no delivery, the young person does not have to take delivery or pay for the goods, though this has been a matter of some controversy for a very long time.

Minors are also bound by contracts of apprenticeship or of service, since it is to their advantage to acquire the means of earning a livelihood. But these contracts must be substantially for the minor's benefit and will not be enforceable to the extent that the contract includes harsh or unfair terms.

Yet another category is a contract that is binding on a young person unless avoided during minority or within a reasonable time of turning 18. This category involves ownership of shares or real property.

The previous Consumer Credit Code did not specifically deal with contracts of loan to minors except in connection with a guarantor's liability of a young person's loan. The common law therefore applies to a loan taken out by a minor. The contract may be binding if the loan is for necessaries or the loan is made in connection with other contracts discussed under this heading. A guarantee of a young person's loan will not be binding on the guarantor unless the guarantee document includes a prominent warning that the guarantor may not be able to recover from the under-age debtor: s 55(3) of the former Consumer Credit Code.
B. Non-binding contracts and young people

Contracts that do not fall into the above categories are not binding on young people unless confirmed or "ratified" after turning 18.

Where a young person has already paid money under a non-binding contract, that money will not be recoverable unless no benefit has been received by the young person. The young person can, however, refuse to make any further payments under the contract. It is not certain who then owns goods that are not necessaries. It appears that they become the property of the young person unless the young person has fraudulently misrepresented his or her age.

After turning 18, a person can confirm ("ratify") a prior contract and then become bound by it. The ratification must be in writing: Mercantile Law Act 1962 (ACT) s 15.

Bankrupts

Bankrupt people are not deprived of their general capacity to contract. However, there are provisions of the Bankruptcy Act 1966 (Cth) that relate to dealings and contracts by bankrupts. For example, obtaining credit of $4,145 (indexed under s 304A) or more without disclosing your bankruptcy is an offence and liable to penalty under s 269 of the Bankruptcy Act. See "The Effect of Bankruptcy on Debts" in Chapter 24.

Corporations

A corporation is an artificial body created by law. The corporation has a legal existence separate from the individual people who comprise it. However, a corporation or company has the legal capacity of a natural person and therefore has the capacity to enter contractual relations (see s 124 of the Corporations Act 2001 (Cth) ('the Corporations Act')). This is so even if there is an express provision contained in the company's constitution which limits the company's powers. Transactions are not deemed void and beyond the company's powers simply because the exercise of such powers is in breach of the restrictions placed in the company's constitution (s 125(1)).

A company has capacity to enter into contracts but such contracts are only binding on the company if those acting on behalf of the company do so with the company's express or implied authority (s 126(1)). The courts have been quite liberal in their interpretation of implied authority. A company has to deal with the outside world through its people. The Corporations Act ss 128-9 provide that anyone dealing with a company is entitled to assume that the person they are dealing with has authority to act for the company unless the outsider knows, or has reason to know, that the company representative lacked authority. It is therefore difficult for a company to deny that a person, apparently acting for the company, lacked authority and could not bind the company.

Prisoners

During their imprisonment, prisoners may enter contracts, including contracts to buy and sell property. The usual restrictions about supervision and censorship of anything coming into the prison still apply, so that the permission of prison authorities is required before a prisoner may sign for, deliver or receive any document.

Excuses

Defective Negotiations

Entering into a contract must involve the elements of free will and proper understanding of what each of the parties is doing. The law recognises that various forms of defective negotiation may provide the "victim" with an excuse which allows that person to cancel the contract (and possibly a right to damages)

Negotiations may be affected by any of the following matters:
  • mistake;
  • misleading conduct or misrepresentation;
  • duress; and
  • undue influence/unconscionability.

The remedy of rescission

A person adversely affected by any one of these may cancel (rescind) the contract. This can be done by way of defence to a claim on the contract or the party can take the initiative and cancel. Because a contract may be cancelled, it is said to be voidable, that is, it is a perfectly good contract unless and until it is cancelled.

Rescission is something that must be done straight away. The contract is legal and effective unless it is properly cancelled. If the purchaser delays, he or she may lose the right to cancel. It must be possible to restore the parties substantially to the pre-contract position. If this is not possible (for example, the goods have been substantially used up or have been sold to a third party), then the remedy of rescission is lost.

For further information about the nature of rescission, see Rescission.

As will be seen below, with some types of defective negotiation, particularly misrepresentation, it may also be possible to seek damages, either under legislation or under the common law.

Mistake

Only a few types of mistakes will cause the contract to be non-binding on the parties to it: they must be mistakes that go to the very basis of the agreement. For example, where there is a contract for the sale of a car that both parties assume to exist, although in reality it has been destroyed by fire, this contract may be rescinded. By contrast, where the parties are only mistaken about the model of the car, then this contract would be binding.

Another example is when a person signs a written document mistakenly believing that it relates to something entirely different from what in fact it does relate to, in which case the person will not be bound by it. This means that if X is told to sign a document which X reasonably believes to be something like a character reference to assist Z obtain a loan from a finance company, and the document is later discovered to have been a guarantee of the loan contract, then the guarantee will not be held binding on X.

A third example is when Y cannot read, owing to blindness or illiteracy or other disability. Someone else tells Y what is in the document and Y signs it. The document Y signed is not what the other person claimed it was. The document Y signed would not be binding on Y.

By contrast, if a person who signs a document believing it to be a contract does not read the terms and conditions, that person will be bound by the contract and will not be entitled to plead mistake.

Other factors may also be relevant to a successful plea of mistake. For instance, whether or not the defence of mistake will be allowed often depends on whether an innocent third party will be adversely affected by a decision that the contract is non-binding. Again, if the signer was careless, failing to take reasonable precautions, the defence will not be allowed to succeed. For these reasons, it is wise to seek legal advice about whether or not a court would hold the contract binding on these grounds. See generally Seddon and Ellinghaus, chapter 12.

Misleading conduct and misrepresentation

A Misleading or deceptive conduct

The enforceability of a contract may be affected by defective negotiations, in particular if a party has engaged in misleading or deceptive conduct. During negotiations many things may be said or promised. Some of these things end up as terms of the contract (see The Terms of a Contract). If so, and they are wrong or inaccurate, then there may be a remedy for breach of contract. But many things are said or written which do not end up as terms of the contract. Yet they have a legal effect if they are wrong or inaccurate. These are generally called misrepresentations, that is, statements which turn out to be incorrect which played some part in persuading the other party to enter into the contract.

There is a very powerful legislative provision found in the Australian Consumer Law s 18 which states that "a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive".

This section applies to individuals and to corporations and is discussed in detail below at Misleading or Deceptive Conduct. However it is important to note that the section is not confined to consumer transactions despite appearing in the Australian Consumer Law.

The section is, however, confined to "trade or commerce" and so it does not apply to non-business transactions. For example, if a person misled a potential buyer in the private sale of a motor vehicle, this would not be covered by the Australian Consumer Law s 18 as a private sale would not be regarded as being in trade or commerce.

The effect of this legislation is that a person who has entered into a contract after being misled by the other party may be able to cancel the contract or obtain compensatory damages. There are other remedies available, for example, modification of the contract.

This law also applies to advertisements and it is possible to obtain an injunction under the legislation to put a stop to misleading advertisements. An ordinary citizen cannot afford to do this but can bring the advertisement to the attention of the Australian Competition and Consumer Commission or the ACT Office of Fair Trading.
B Misrepresentation under common law

If this legislation does not apply (for example, in a private sale) then it may still be possible to rescind a contract induced by a misrepresentation. The right to rescind under common law principles has been made less restrictive by the Civil Law (Wrongs) Act 2002 (ACT) s 173.It is possible to rescind after the contract has been executed whereas under common law principles this may not be possible where the misrepresentation was a non-fraudulent one. Section 175 of this Act also provides for damages in lieu of rescission at the court's discretion.

The Civil Law (Wrongs) Act 2002 (ACT) s 176 controls the use of exclusion clauses which attempt to exclude remedies for misrepresentation. They are subject to a test of reasonableness.

It is also possible to seek damages for a misrepresentation under the law of torts: in the tort of deceit if the representation is fraudulent; in the tort of negligence if the representation is negligent. Each of these has its difficulties. Proving fraud is difficult: there must be very clear evidence that the person has lied. Bringing a negligence action for misrepresentation is also not straightforward. It must arise from a situation where the allegedly negligent person owes a duty of care to the other party. This is not readily found by the courts. The circumstance must generally be one where the person providing the information is an expert or is providing it in a business or professional setting. Casual remarks between friends and acquaintances do not usually generate negligence liability.

The Civil Law (Wrongs) Act 2002 (ACT) s 174 provides for a statutory right to damages for misrepresentation in addition to a right to damages under the law of torts. This right can be asserted against the other party to a contract or the agent of that party. The defendant is not liable for damages if he or she can show that there were reasonable grounds for believing that the representation was true. In the case of a misrepresentation made by an agent, the defence requires that both the agent and the other party to the contract had reasonable grounds for believing that the representation was true.

A pre-contractual misrepresentation is best dealt with, so far as possible, under the Australian Consumer Law s 18 which is far easier to use than the law just described. Any dealings with a trader or business will be covered by this legislation.

Duress

Proper consent may be affected by duress. Duress is held to have occurred where there has been actual or threatened violence either to the other contracting party or to their immediate family, near relatives or close associates. The duress may be made by someone acting under the instructions of the party to the contract. The net effect, though, will have been that a party has been forced into the contract by being deprived of their free will to act.

Duress now extends to contracts entered into as a result of threats to a party's economic well being, that is, a threat to a person's business or trade. This form of duress is called economic duress.

The consequence of establishing duress is that the contract is voidable at the election of the wronged party. That is, as discussed above, the wronged party must act promptly or risk losing the right to cancel.

Undue Influence and unconscionability

A. Undue influence

Proper consent may be affected by undue influence. Undue influence is exercised by taking unfair and improper advantage of the weakness of the other party, to the extent that it cannot be said that that party intended voluntarily to enter into the contract.

The main reason for the rule against the use of undue influence is to correct abuses of trust and confidence. It is applied where the parties are in a relationship where one party may be able to exercise considerable influence over the other party.

There are two categories of undue influence.

The first is where the parties are in a confidential relationship. Most cases of undue influence fall into this category. A confidential relationship exists when one party's position towards the other involves a dependency or trust, in the form of authority or an expectation to give fair and independent advice to the weaker party. Where a confidential relationship is found to exist, a presumption of undue influence will arise. It is then necessary for the stronger party to show that the contract was not the result of any undue influence.

In this first category, a confidential relationship and the presumption of undue influence arises in certain established relationships (though the list is not closed), for example, solicitor and client, doctor and patient, religious or spiritual adviser and devotee, guardian and ward and parent and child.

The second category is where a relationship exists in which one party is vulnerable vis-a-vis the other party. This may arise over time where, for example, a party becomes dependant on the other party in some way. Or it can arise in a one-off situation. If the stronger party uses some pressure or wrongful act expressly to gain an advantage from the weaker party, then the advantage may have been obtained by the use of undue influence. The weaker party will have to prove that undue influence was actually exerted.

The confidential relationship, although not falling within the first category, may be such that the complaining party is able to show that the other party was in a position of influence. For example, it could be the relationship between a bank and its customer, because of a special position of trust that the bank had come to occupy in connection with the conduct of this customer's affairs. (It has been stressed, however, that in ordinary circumstances no presumption of undue influence arises out of a banker--customer relationship.)

The consequence of establishing undue influence is that the contract may be voidable at the election of the wronged party who must act promptly if he or she wishes to cancel the contract.
B. Unconscionability

A contract may be cancelled if it was the product of unconscionable dealing by one of the parties. This is closely related to undue influence (discussed above) but the usual feature of undue influence is the exploitation of a relationship of dependency whereas unconscionability is more general.

Unconscionable dealing, as interpreted in case law, occurs where two requirements are satisfied:
  • one party to a contract or transaction is under a special disadvantage; and
  • the other party takes unfair advantage of the other party's vulnerability, either with knowledge of that vulnerability or where the other party has "closed their eyes" to the vulnerability.
Although not an express requirement, it is apparent that the courts will more readily hold that a party has taken unconscionable advantage of a person where the transaction is extremely disadvantageous to that person.

The following cases are examples of factors where a special disadvantage existed, and was exploited by the other party to the transaction.

Economic necessity and financial over-commitment: Vital Finance v Taylor (1991). A finance contract was set aside as it was found that the consumers, the Taylors, were at a special disadvantage because of their financial need. The Taylors had no cash and pressing financial commitments which had to be met. It was also found that they had limited understanding of the transaction and were commercially inexperienced. The repayments under the contract were increased from an initial level of $1,500 per month to $2,500, and it was found the financier did not in truth believe that they would be able to meet these payments.

Drunkenness: Blomley v Ryan (1956). A farmer agreed to sell his farm at 30 per cent less than its true value, while in the middle of a prolonged bout of heavy drinking. The sale contract was set aside by the court.

Old age and improvident transaction: Commercial Bank of Australia v Amadio (1983). The Amadios, an elderly couple with a poor understanding of English, signed a mortgage and guarantee with the bank to support their son's ailing business. They thought that their son's business was prosperous, when in fact it was in financial difficulties. The bank enhanced the business's appearance of solvency by selectively honouring cheques that overdrew its account. The bank obtained security for a non-performing loan as a result of the guarantee. The guarantee was set aside as unconscionable, as it was manifestly disadvantageous to the Amadios, the bank must have been aware of this and took no steps to ensure that the Amadios were properly advised in relation to the transaction.

Emotional dependence: Louth v Diprose (1992). A male solicitor made a gift of $59,206 to a woman to enable her to purchase a house. It was held by the High Court that the transaction was unconscionable because the woman took advantage of the man's emotional dependence on her.

Illiteracy: Lee v Cafred Pty Ltd (1992). Lee was an uneducated and illiterate purchaser, wholly inexperienced in business. He bought a property (Lot 3) after being misled as to its suitability for running wild turkeys, including adequate fencing and a dam. After complaining to the vendor, he was induced to swap Lot 3 for Lot 7. Lot 7 was also unsuitable. The transaction was set aside as unconscionable as, first, the vendor was aware that Lee was informed that he was bound by the contract for Lot 3 (and could not recover his money), which was false, and, second, that he was misled as to the attributes of Lot 7.

Lack of knowledge of relevant circumstances: Collection House v Taylor (2004). An employee of Collection House contacted Taylor in 2001 about a debt that was incurred in 1992. The employee claimed that if the debt was not paid legal action might be taken against Taylor. Taylor then agreed to pay $5,000 to settle the debt. However, the next day she sought the advice of a financial counsellor and discovered that the debt was, in fact, statute barred. Collection House was also aware that Taylor was in difficult personal and financial circumstances at the time. It was held by the court that Collection House had engaged in unconscionable conduct. The judge held that Taylor had been at a special disadvantage because of her lack of knowledge of the matters at issue and that Collection House had wrongly exploited its position of advantage.

The typical unconscionability case involves a bank persuading an unsophisticated person to sign a contract providing security to the bank when that person has pretty clearly little idea of the risks he or she is running (as in Amadio above). There are many cases decided by the courts on unconscionability. There is little doubt that a court is faced with a difficult dilemma: either set aside the transaction and thus allow the vulnerable party to escape a bad situation; or leave the contract on foot and the vulnerable party loses his or her house (or whatever other security has been provided).

The cases outlined above may give the impression that it is relatively easy to argue unconscionability. The courts will not readily set aside a contract on the grounds of unconscionability because it is generally assumed that people should take some care in their affairs. The focus is on the party trying to enforce the transaction. There must be very clear evidence that, at the time of making the contract, that party acted in a seriously uncaring, insensitive or exploitative way. The High Court in ACCC v CG Berbatis Holdings Pty Ltd (2003) made it clear that it is difficult to establish unconscionable conduct, even when a party has acted in a manner that some would think very tough or unfair. The case law is often difficult to rationalise and may be explained by the different attitudes of judges when faced with a difficult decision. The case law is fully discussed in Seddon and Ellinghaus, chapter 15.

Individuals and corporations are prohibited from engaging in unconscionable conduct in trade or commerce under the Australian Consumer Law ss 20-22. This legislation is discussed more fully below. In addition, s 70 of the Uniform Consumer Credit Code regulates unjust credit transactions.

Illegal Contracts

The law will not enforce all contracts. There are some categories of contract to be wary of.

Where a contract is illegal, this may affect its enforceability. Contracts may be illegal under common law principles or they may be illegal under legislation.

Contracts illegal under common law

The law regards some kinds of contracts as illegal because they involve moral wrongdoing or reprehensible conduct. Examples are contracts to commit a crime, to jeopardise the revenue, which are a danger to public safety or international relations, which undermine the administration of justice, which are corrupt and so forth. If a party to such a contract seeks a court's help to enforce, the court will simply refuse to do so.

Contracts illegal under statute

Contracts that are illegal by statute may be regulated as to enforceability by the legislation, so the statute will need to be read and interpreted. Contracts absolutely prohibited by statute will be void, whether the parties know of the illegality or not. However, where one party performs an otherwise legal contract in a manner that breaches legislation, the other party, if having no knowledge of the facts giving rise to the illegality, may still be able to enforce the contract or recover damages for breach of it. Or a court may decide that the contract is unenforceable because of the illegality.

The law about illegal contracts is complex and often difficult to apply. Because there are so many legislative provisions affecting very many aspects of life, it is possible for a contract to be tainted by illegality (perhaps even unknown to the parties). Whether such a contract will or will not be enforced by the courts has generated a great deal of contradictory case law. See Seddon and Ellinghaus, chapter 18.

The Terms of a Contract

What are the Terms of a Contract?

Before entering into a contract, various statements will often be made by the parties. A dispute may later arise as to which of the statements made should be considered a part, or a term, of the contract, and which should be taken as merely pre-contract talk, and therefore not a part or term of the contract. Parties to a contract are bound only by its terms, not by any peripheral statements that may have been made. However, a pre-contractual misrepresentation (that is, it is not a term of the contract) has legal consequences, as outlined above at Misleading conduct and misrepresentation.

The courts are prepared to look at any evidence of intention by one or other of the parties that the statement should be part of the contract. For example, the longer the interval is between the making of the statement and the reaching of the final agreement and contract, the less likely it is that the statement will be considered to be a term of the contract.

The fact that the maker of the statement had a special knowledge or skill compared with the other party will make the statement more likely to be a term. Where the agreement was subsequently reduced to writing and the statement was not included, it is less likely to be a term.

If a contract is in writing (either because it is required to be in writing by legislation or because the parties have chosen to put it in writing) then generally it is assumed that the written document is the complete statement of the terms of the agreement. What this means is that if one party then tries to argue that something said during negotiations is part of the contract and it was not included in the written document, then the argument to include that statement will not be successful. However, it is always important to keep in mind the remedies for misleading conduct under the Australian Consumer Law s 18. This legislation operates outside the contract.

Implied terms

Despite what has just been said, it is important to understand that in certain contracts terms may be implied, that is, read into the contract. This may happen because the parties overlooked something important. Or it may happen because consumer protection legislation prescribes that certain terms will be automatically read into a contract.

By far the most important for present purposes are statutory implied terms. These are discussed in detail at Implied Conditions and Warranties in Consumer Sales.

The Effect of Signing a Document

We have seen that contracts do not have to be in writing unless legislation provides otherwise. Or the parties may choose to use a written document. If a written contract is used, it is very common that it is required to be signed.

When a contract is in writing, the general rule is that a party is bound by all the terms set out in a contractual document if he or she has signed it (see Acceptance). This applies whether or not he or she has read the terms or understood them. The exceptions to the general rule are mistakes as to the nature of the document and misleading statements (see Defective Negotiations).

Unsigned Contracts - "Ticket" Cases

We have seen that not all written contracts are supposed to be signed. An example is an airline ticket or a public car park docket. The terms may be on a ticket or may be displayed on a sign or wall. The customer is taken to have agreed so long as the customer had an opportunity to read the terms and did not object to them. This rule means that the terms must be available for scrutiny before the contract is made. The rule takes little account of the fact that no-one actually reads the terms or would have almost no time to read them if he or she tried to. Some allowance is taken of this if an exclusion clause is in a ticket (see Exclusion of Responsibility Terms).

Collateral Contracts

A collateral contract is a separate contract which exists alongside the main contract. Generally, where a contract is in writing, the written terms of that agreement form the basis of the contract. But sometimes, where a statement has been made and intended as a promise, and intended to induce the main contract, a collateral contract will be held to exist.

Courts have been prepared to find a collateral contract where one party refused to enter the main contract unless certain assurances were given over and above what is in the written contract. For the court to hold that a collateral contract has been made, its terms must be consistent with the main written contract.

Uncertainty

It is common for the terms of a contract to be uncertain in some respect. There may be terms that contradict each other, a term may be ambiguous or it may be very difficult to decide what a particular term means. A possible consequence of an uncertain term or terms is that the terms are severed from the contract or else the whole contract is void. Hence uncertainty may be a way of getting out of a contract.

The law's approach to interpretation

To avoid this result so far as possible, the law's approach to this common problem is, firstly, to try to give the uncertain clause or clauses a sensible meaning. This is done by applying an objective test: what would a reasonable person consider the problem clause or clauses to mean? This should be a guide to resolving a dispute over the contract's meaning. The objective test is a common sense test. The courts will go a long way to finding a sensible meaning because the alternative is that the contract may be void.

The consequences of uncertainty

If a term is so uncertain that it cannot be given a sensible or any meaning, the term is either severed from the contract or else, if that is not possible, the whole contract is declared to be void which means that it never existed (despite the parties' assumptions and actions).

Severance means that the problem clause or clauses are "blue pencilled" from the contract and the rest of the contract operates without the severed clauses. Whether a term or terms can be severed from the contract depends on whether the contract can operate without the clauses. If the essential purpose and expected outcome of the contract can still be achieved without the problem clauses, then they will be severed.

If severance is not possible, then, as already stated, the contract is declared to have never existed. This does not quite leave the parties in a legal vacuum because the law of restitution provides that goods or services already provided must be paid for at a reasonable market price.

Unfair Contract Terms

Under the Australian Consumer Law it is possible for an individual consumer (as defined) to challenge a term or terms of a standard form contract on the basis that the term or terms are unfair. If the challenge is successful the term is void. This is fully discussed at Unfair Contract Terms.

Exclusion of Responsibility Terms

It is possible to have a term in the contract which excludes one of the parties from responsibility for something that may go wrong in the performance of the contract or limits that responsibility. It is called an exclusion clause, an exemption clause or limitation of liability clause. For example, an exclusion from liability for damage done to a lawn by a builder's backhoe might be included in a contract between the builder and a home owner who is having an extension built to their home.

The courts have generally taken the view that exclusion clauses are unfair and have tried to limit their application. Courts will generally interpret an exclusion clause against the party trying to rely on it and, at the least, interpret it narrowly so long as it is capable of being read down.

Where a contract is a document signed by the parties, they will generally be bound by the exclusion clause in it.

Where a contract is an unsigned document (see Unsigned Contracts - "Ticket" Cases), the court will look at what a reasonable person would assume the document to contain. Only where a reasonable person would assume the terms to include an exclusion clause will the exclusion clause in the document be able to be relied on. It must also be shown that the exclusion clause was brought to the notice of the other party. For example, if an automatic ticket machine in a car park had printed on it "issued subject to the conditions displayed in car park" and these conditions, or exclusion clauses, were on a pillar opposite the ticket machine, then this could potentially be held to be unreasonable notice of the exclusion clause. The driver may then be entitled to sue despite the exclusion clause in the conditions.

For consumer contracts, the Australian Consumer Law and other consumer protection legislation may imply conditions that cannot be excluded (see Consumer Guarantees).

Ending a Contract

A contract may end in any of the following ways.
Performance;
Agreement between the parties;
Impossibility of performance;
Termination for breach of contract;
Rescission.

Performance

When the parties to the contract completely fulfil their obligations to one another, whether by payment of money or by doing something as agreed in the contract, the contract for most purposes comes to an end.

This does not mean that legally it is at an end. If, for example, goods turn out to be defective, then the contract is still relevant to determine the rights of the purchaser. In fact a contract has a life for six years after it has been performed. This is because the limitation period for breach of contract is six years (Limitation Act 1985 (ACT) s 11(1)). This means that if there is a breach of contract, a party has six years to assert his or her rights stemming from that breach.

Agreement Between the Parties

A contract, being the result of agreement, may be terminated by further agreement between the parties to end their contractual relationship.

Impossibility of Performance

If performance of a contract becomes impossible, without fault of either party, there will be an automatic discharge of the contract. Simple lack of ability of one of the parties to perform the contract is not sufficient. The impossibility must be something that renders performance totally impossible or something unexpected which changes the circumstances so radically that the contract would have to become fundamentally different from the original contract.

Termination for Breach of Contract

Breach of contract by one party may entitle the other party to regard the contract as at an end. However, it is rarely as simple as that. There are some breaches of contract which do not give the wronged party the right to end the contract but only entitle a claim to be made for monetary damages to make up for any loss suffered. Other breaches - serious breaches - may provide the other party with the right to terminate. It is often difficult to know whether a particular breach justifies termination unless the contract itself is very clear about this. If the term broken is designated an "essential" term (sometimes called a "condition") then a breach of it will justify termination.

Termination must be acted on. Assuming a sufficiently serious breach has occurred, the non-defaulting party has a choice: to terminate or to carry on with the contract. If that party does nothing this will betaken to be choosing not to terminate. Once that choice is made the right to terminate is lost (unless a fresh serious breach is committed). Accordingly, a party who wishes to terminate a contract needs to act promptly.

The difficulty with termination is to know whether the breach that has occurred is a sufficient trigger for termination. If the non-defaulting party terminates and it turns out that he or she did not have sufficient grounds for termination, then that party has committed a serious breach -- wrongful termination of the contract. The other party may then sue for damages.

If a contract is terminated, it stops as at the time of termination. This means there was a contract but it was never completed. Any accrued rights, that is, rights which fell due before termination, are enforceable. This is to be contrasted with rescission (see below).

It is easy to terminate a contract. All that is required is for one party to indicate clearly, preferably in writing, that the contract is terminated.

Rescission

Under Defective Negotiations, various doctrines were discussed which gives one party the right to rescind or cancel the contract. All of these triggers for rescission arise out of defective negotiations before the contract is made. By far the most common one is misrepresentation or misleading conduct.

Rescission is cancelling the contract as if it had never existed. This is to be contrasted with termination which stops the contract at the time it is terminated. The act of rescission means that the parties are restored to the status quo prior to contract and the contract is treated as never having existed. This means that no rights under the contract exist once it has been rescinded.

It is a pre-requisite of rescission that the status quo can be restored. Goods must be returned and money paid back. If it is not possible substantially to place the parties in the position that existed before the contract was made, then the right to rescind is lost. This rule means that rescission is only available very early in the life of the contract and must be acted on very promptly.

Rescission is one of the remedies available for misleading or unconscionable conduct under the Australian Consumer Law (s 243). The remedy is a discretionary remedy which means that the party seeking it is not automatically entitled to it. The court must decide whether in all the circumstances it is a reasonable response to the fact that the contract was induced by either misleading conduct or unconscionable conduct.

There is also a special right to rescind a contract under the consumer guarantee sections of the Australian Consumer Law where goods or services are unsatisfactory. See What remedies are available?.

Consumer Guarantees

Minimum Standards for Retail Sales of Goods or Services

The Australian Consumer Law ('the ACL') contains consumer guarantees which are automatically incorporated into consumer contracts, that is, they are implied terms of the contract, or statutory warranties, in addition to any other warranty a purchaser may have. The ACL came into effect on January 1 2011 replacing equivalent sections of the Trade Practices Act 1974 (Cth) which became the Competition and Consumer Act 2010 (Cth) on that date. The ACL is adopted as a law of the Australian Capital Territory: Fair Trading (Australian Consumer Law) Act 1992 (ACT) s 7.

These consumer guarantees are adaptations of what is found in the Sale of Goods Act 1954 (ACT) ('SGA'). If for one reason or another the ACL does not apply (see below), then the same conditions and warranties will probably apply. Important differences between the implied terms under the ACL and the SGA are:
  • the terms implied under the SGAapply to any goods purchases not just to consumer purchases;
  • the terms implied under the SGAcan be excluded by express provision in the contract whereas this is not possible under the ACL(subject to one exception); and
  • theACL covers services as well as goods.
In this Chapter, only the ACL will be covered.

The first question to ask is: does a contract exist? Most transactions that consumers complete will amount to a contract, whether they are for a good (for example, a toaster) or a service (for example, dry-cleaning). If no contract exists no terms will be implied.

Second, only a party to the contract may rely on the implied terms for protection. Someone who receives something as a gift from the person who purchased the goods is usually not covered by the legislation. However, there is an important exception to this under the manufacturers' warranties provisions of the ACL which enables a consumer to sue a manufacturer directly (see Who is a consumer?).

The ACL implies these protections into contracts covered by the legislation. The ACL then provides very extensive remedy provisions which give the customer the right to replacement, repair or possibly rejection of the goods or services and recovery of the price (see What Remedies are Available?).

In any consumer purchase it is very important to keep a record of the purchase. As will be seen in the next paragraph, the sales docket is more important than the so-called 12-month warranty. The fact that a particular retailer supplied goods or services triggers the various protections under the ACL. It is therefore important o be able to prove where the goods or services were purchased.

The ACL provides that the supplier must provide proof of purchase where the price is $75 or more or, where the price is less than $75, must provide proof of purchase if requested to do so by the consumer (s 100). Proof of purchase will usually be satisfied by:
  • a tax invoice;
  • a cash register receipt so long as it identifies the goods or services purchased;
  • a credit card or debit card statement;
  • a handwritten receipt;
  • a lay-by agreement;
  • a confirmation or receipt number provided for a telephone or internet transaction.
A consumer also has the right to demand an itemised bill for services (s 101).

The 12-month warranty and extended warranties

It is important to note that these statutory, non-excludable guarantees override any "warranty" provided by a retailer or manufacturer. The ubiquitous 12-month warranty provided with new goods gives the impression that a defect that appears more than 12 months after purchase cannot be the subject of a consumer's complaint (it is "out of warranty"). This is not correct. The implied terms discussed below say nothing about the time that the terms last for. If, for example, a DVD player breaks down 15 months after purchase (assuming that it has been used normally), it is not fit for purpose or of merchantable quality. The consumer therefore has rights (discussed below) and the "12-month warranty" is irrelevant. What is important in order to invoke the various protections provided by the ACL is to be able to prove who supplied the goods or services - see Minimum Standards for Retail Sales of Goods or Services above.

Some retailers will try to resist a consumer's complaint about unsatisfactory goods by claiming that the consumer is out of warranty. The retailer should be told politely, but firmly, about the ACL. It is also misleading conduct for the retailer to use the 12-month warranty to resist a consumer complaint. The maximum penalty for this is $1.1 million (s 151(1)(m)). The ACCC has responsibility to prosecute this kind of behaviour.

Extended warranties usually involve the customer being persuaded to purchase a longer warranty. These should be treated with caution because they may only provide the same protection as is already provided under the legislation. Further, they are usually outsourced, that is, the retailer does not take responsibility for the extended warranty and the customer finds he or she is dealing with a completely different company. The extended warranty terms should be examined closely. The fine print may provide the company with excuses not to meet any claim under the extended warranty.

The ACL s 29(1)(n) provides that a supplier of goods or services must not make a false or misleading representation concerning a requirement to pay for a contractual right that is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy, including the consumer guarantees discussed here. This section is clearly aimed at extended warranties.

The ACL provides for the possibility of regulations being passed to prescribe the requirements for warranties against defects (that is, 12-month or extended warranties) (s 102). If and when such regulations are passed, suppliers must comply with them (s 103).

What Sorts of Contracts do the ACL Consumer Guarantees Apply to?

The ACL applies to contracts for the sale of goods (including a lease of goods) or for the supply of services by a supplier in the course of its business to a consumer. In short, this legislation applies to all retail consumer purchases. It also covers some business purchases (see Who is a consumer? below).

What are the limitations of the ACL?

The ACL guarantees do not apply to the supply of gas, electricity and telecommunications services (s 65(1)(b)).

The most important guarantees from the consumer's perspective (acceptable quality and fitness for purpose) do not apply to auction sales.

What suppliers are bound?

The ACL applies to "persons" which includes companies and unincorporated sole traders. The supply must be "in trade or commerce" and so private sales are not covered.

Governments are bound by the ACL only in so far as they carry on a business. If a government body is selling either goods or services then it is almost certainly carrying on a business and so would be bound by the consumer guarantees.

Who is a consumer?

The ACT s 3 defines a consumer of goods or services as:
  • a person who purchases goods or services costing less than $40,000; or
  • in the case of goods or services costing more than $40,000, a person who purchases goods or services which are of a kind ordinarily acquired for personal, domestic or household use or consumption (for example, a car, a painting, a kit home; but not factory machinery, or elaborate electronic equipment for a business); or
  • a purchaser of a commercial road vehicle
so long as the person did not acquire goods, or hold himself or herself out as acquiring goods, for the purpose of re-supply or for the purpose of using them up or transforming them, in trade or commerce, in the course of a process of production or manufacture or of repairing or treating other goods or fixtures on land.

A commercial road vehicle means a vehicle or trailer acquired for use principally in the transport of goods on public roads.

The effect of this is that anyone or any business who acquires goods or services costing less than $40,000 will be a consumer provided that they did not acquire them for the purpose of reselling them (for example, a milk bar owner purchasing stock) or using them up in production or manufacture or repair (for example, a shoemaker purchasing leather for shoes). This means that business transactions under $40,000 are covered, for example, the purchase by a business of a computer for $25,000. If the price is less than $40,000 the goods or services do not have to be used for personal, domestic or household use of consumption to be covered by this legislation.

Although not free from doubt, the $40,000 limit applies to each item. If a business bought 5 computers for a total of $125,000 but each computer cost $25,000, then this would be a consumer purchase.

Section 3 deals with circumstances where goods or services are bought as part of a mixed supply (that is, along with other goods or services) and the particular price is not stated for the individual item in which case a deemed price is attributed to the item.

If the goods or services cost more than $40,000, then they must be of a kind that are bought for personal, domestic or household use or consumption for the implied guarantees to apply. A person who bought a large industrial lathe for personal use probably would not come within the definition of "consumer" because the goods were not of a kind ordinarily acquired for personal, domestic or household use or consumption. On the other hand, a business that purchased very expensive furniture (over $40,000) probably would be protected.

The consumer includes a person who received goods as a gift from the purchaser of the goods (s 266). This means that the remedies discussed below at What Remedies are Available? can be used by the gift recipient against the retailer.

Can the protection afforded by the ACL be excluded?

The protection provided by the ACL is dependent upon whether the sale is of
  1. goods or services ordinarily acquired for personal, domestic or household use; or
  2. goods or services ordinarily acquired for other purposes (usually this will be in the course of business).
In the first situation, where the ACL implies terms into a contract, any term of the contract which attempts to exclude, restrict or modify the protections offered by the ACL is void and of no effect (s 64). This covers nearly all situations where the consumer is a person buying goods for personal use.

Remember that the definition of "consumer" includes goods or services which may be used for business purposes so long as the price is $40,000 or below. It is legitimate in a business sale of goods or services covered by the ACL for the seller to limit its liability to the cost of replacement or repair of goods or the re-supply of services (s 64A). This must be done by express provision in the contract. Further, it must be fair and reasonable in the circumstances of the case for the supplier to rely on the express provision. The onus is on the purchaser to establish that it is not fair and reasonable. Some guidance on the factors to take into account in determining whether reliance on the limitation of liability clause is reasonable are set out in s 64A(4).

Under s 139A of the Competition and Consumer Act 2010 (Cth) it is possible for recreational service providers to exclude liability for death or personal injury except where death or injury was caused by reckless conduct. This section was added as an ill-considered response to the so-called "insurance crisis". Recreational services means a sporting activity or a similar leisure-time pursuit; or any other activity that involves a significant degree of physical exertion or physical risk which is undertaken for the purposes of recreation, enjoyment or leisure.

What Protection does the ACL Provide?

Goods

The principles of protection in relation to goods provided by the ACL are:
  • that the seller has good title to the goods the subject of the sale (s 51);
  • that the buyer will have undisturbed possession (s 52);
  • that the goods are free from any security, charge or encumbrance (s 53);
  • that the goods are of acceptable quality unless bought at auction (s 54);
  • that the goods are fit for the purpose for which they are purchased unless bought at auction (s 55);
  • that the goods bought or hired on the strength of a description conform to that description unless bought at auction (s 56);
  • that, where sale is by sample or demonstration model, the goods correspond with the sample or demonstration model unless bought at auction (s 57);
  • a guarantee that the manufacturer of the goods will take reasonable action to ensure that facilities for the repair of the goods, and parts for the goods, are reasonably available for a reasonable period after the goods are supplied unless the goods were bought at auction (s 58);
  • a guarantee that the manufacturer or supplier of the goods will comply with any express warranty given or made by the manufacturer or supplier in relation to the goods (s 59).
A. What goods are covered by the ACL?

In the ACL, "goods" has the meaning normally attributed to that word including second-hand goods, and also includes items such as vehicles, animals and computer software (s 2) but not, for the purpose of consumer guarantees, gas or electricity (s 65).
B. What if the seller does not have the right to sell goods?

It can happen in consumer transactions that the owner of the goods agrees to sell them (or agrees that at some future time to sell them, as occurs in hire-purchase transactions) but in fact does not have the right to do so, that is, does not have title to the goods.

Where another person has a right to the goods and the seller neglects to tell the buyer, the seller will be in breach of contract.

For example, this often occurs in the sale of second-hand motor cars, when it may turn out that the person selling, or purporting to sell, the car does not have the right to do so. When the true owner comes along to claim the car, the consumer will lose it. The ACL s 51 makes it a condition of all contracts of sale, or agreements to sell on hire purchase, that the person supplying the goods under the contract has the right to sell. This does not necessarily mean that the consumer will be able to retain the goods, but it does mean that if the supplier does not own the goods and as a result of this the consumer loses what has been bought, the consumer will be able to sue the supplier for any loss suffered as a result (usually the purchase price plus any other damage suffered).
C. Undisturbed possession

The ACL s 52 guarantees that the buyer will enjoy undisturbed possession of the goods. This would be so even if the goods were leased or bought on hire purchase and title remained in the supplier.
D. Free from any security, charge or encumbrance

The ACL s 53 guarantees that the goods are free from any security, charge or encumbrance unless the supplier has disclosed a security, charge or encumbrance or it has been created with the consumer's consent.
E. Goods must be of acceptable quality

Where a person supplies goods to a consumer in the course of business, there is an implied condition that the goods supplied are of acceptable quality (ACL s 54). This means that the goods must be as:
(a) fit for all the purposes for which goods of that kind are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
(e) durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the following:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and
(c) any statements made about the goods on any packaging or label on the goods; and
(d) any representation made about the goods by the supplier or manufacturer of the goods; and
(e) any other relevant circumstances relating to the supply of the goods.

These criteria provide a flexible test that caters for different circumstances. Second-hand goods, for example, cannot be expected to be in the same condition as one would expect for brand new goods.

One question to ask is whether a reasonable person who wanted goods of that type would be prepared to accept the goods in that condition. It will not always be sufficient that the goods are fit to perform the purpose for which goods of that sort are normally used. For instance, if a consumer purchases a new car and the car arrives with scratched paintwork, then a reasonable person would not accept the car. The car is therefore not of acceptable quality, even though it is fit for the purpose for which cars are used.

The guarantee of acceptable quality will not apply in the following situations:
1. where defects in the goods have specifically been drawn to the consumer's attention before a contract is made; or
2. if the consumer examined the goods before the contract was made, and a reasonable examination ought to reveal that they were not of acceptable quality; or
3. the goods were bought at auction.
F. Goods must be fit for a particular purpose

Where the seller is made aware by the consumer of the purpose for which goods are required or the seller represents that the goods are reasonably fit for a particular purpose, then the goods must be reasonably fit for that purpose (ACL s 55). This applies whether or not the goods are commonly supplied for that purpose. This guarantee does not apply where the consumer has not relied on the skill and judgment of the person selling the goods or where it would be unreasonable to do so. Nor does it apply if the goods are bought at auction.

For people purchasing goods from a seller in the course of the seller's business, the purchaser must show that
1. the particular purpose for which the goods are required was made known to the supplier, either expressly or by implication, or the supplier volunteered that the goods were suitable for a particular purpose; and
2. the purpose was made known to the supplier in such a way as to show that the supplier's skill and judgment was relied upon.

Although at first sight these requirements appear rather onerous, the courts have taken a liberal approach which is favourable to consumers. In the case of goods which only have one particular purpose, requirement (1) will be satisfied by merely placing an order for the goods.

In consumer cases, requirement (2) will be satisfied, for example, by the fact that the consumer went into the supplier's shop. In effect the consumer is said to rely on the seller's skill in selecting the goods.
G. Sale by description

The ACL provides that where a person, in the course of a business, supplies goods to a consumer by description (other than at an auction) there is an implied condition that the goods correspond with the description (s 56).

Many consumer transactions are by description, that is, the consumer does not actually see the goods being purchased. This may occur in two ways:
1. goods are ordered from a distance, for example, by telephone, without ever seeing them; or
2. more commonly, a consumer may, for instance, ask for a tin of fine-ground coffee, or select a tin labelled fine-ground coffee from a supermarket shelf.

Both of these are sales by description. In the latter case it can be argued that the consumer relies on the description on the label (compared with the situation where the tin is opened and the contents examined). If the tin does not contain fine-ground coffee then the consumer may take advantage of the protection offered by the ACL. Note that s 56(2) provides that supply of goods is not prevented from being supply by description merely because a consumer selects goods exposed for sale or hire.

If the sale is by reference to a sample as well as by description, then it is not sufficient that the goods correspond to the sample if they do not also correspond with the description (s 56(3)).
H. Protections when goods are bought by sample

A few consumer transactions are of the type where the consumer buys by reference to a sample of the goods or a demonstration model. For example, a consumer may buy carpet by reference to a sample shown in a samples book. In this case, the ACL s 57 provides that where this is done in the course of the seller's business (other than by auction) it is a condition of the contract that:
1. the bulk of the goods will correspond with the sample in quality;
2. the consumer will have a reasonable opportunity of comparing the bulk with the sample; and
3. the goods will be free from any defects rendering them unacceptable that would not be apparent on a reasonable examination of the sample.

In the example given, if the sample of the carpet shown to the consumer was a pure wool carpet and the bulk of the carpet delivered to the consumer turned out to be a blend of wool and synthetic, the consumer will be entitled to reject the carpet delivered.

It is most important that the consumer reject the goods as soon as the defect is discovered and preferably not accept the goods at all. If the goods are accepted, the right to terminate the contract may be lost, and the consumer will be forced to rely on a remedy for damages. This of course may not be satisfactory because the court will award damages on the basis of the difference between the price of, in this example, a wool carpet and the carpet of wool and synthetic material. A consumer who does not wish to accept a wool and synthetic carpet under any circumstances but nonetheless accepts delivery of the goods may have to accept the carpet and be content with what can be gained by way of damages.
I. Repairs and spare parts

Section 58 guarantees that the manufacturer will take reasonable action to ensure that facilities for the repair of the goods, and parts for the goods, are reasonably available. This guarantee is given by the retailer in the usual case. It is difficult to know what action can be taken against the retailer if this guarantee is not honoured, apart from suing the retailer for damages. An action for damages can also be brought against the manufacturer ( s 271(5)) but often this is not practical.
J. Express warranties

Under s 59 of the ACL any express warranties given by the retailer or the manufacturer must be honoured. This applies to, for example, the 12-month warranty. That must be honoured but it is in addition to the rights provided by the ACL. It is not a substitution for those rights.

The same applies to an extended warranty that is purchased by the consumer.

Services

A. What services are covered by the ACL?

Services are widely defined in s 2 of the ACL and include most things normally thought of as services and include contracts for work (but not employment), including professional work, provision of recreational and amusement facilities, a contract between banker and customer and a contract for the lending of money.

Specifically excluded are services involving 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 and insurance (s 63).
B. What protection is offered in relation to services?

In every contract for the supply of services in the course of a business there will be an implied warranty that the services will be rendered with due skill and care (s 60).

When a consumer expressly or by implication makes known to the service provider any particular purpose for which the services are required, or the result that is desired to be achieved, there is an implied guarantee that the services supplied under the contract, and any product resulting from the services, will be reasonably fit for that purposes (s 61). However, where the circumstances show that the consumer does not rely on the supplier's skill or judgment, or it is unreasonable to do so, this term does not apply (s 61(3)). Nor does this guarantee apply in respect of services of a professional nature by a qualified architect or engineer (s 61(4)). If the time for delivery of the services is not expressly fixed, then the service provider must supply the services within a reasonable time (s 62).

What is the Position with Finance Agreements?

In cases where a consumer purchases from a supplier, and then a separate finance contract is entered into with a finance company (a "linked credit provider"), there are special provisions in ss 278-286 of the ACL. These sections are complex provision but the essence of them is that the consumer may have rights against not just the retailer but also the credit provider if the credit provider is the finance company regularly used by the retailer for providing loans to customers.

On the other hand, if the customer makes his or her own arrangements to borrow money for a purchase of goods or services, then only the retailer is liable for defective goods or services.

What Remedies are Available?

Remedies against the retailer

The ACL ss 259-277, which came into effect on 1 January 2011, brought about very major changes to the remedies available to consumers when goods or services are unsatisfactory, that is, they do not conform to the consumer guarantees discussed above in What Protection does the ACL Provide? . The following remedies are available:

In respect of defective goods, the consumer may:
  • reject the goods for a major failure and obtain a refund;
  • ask for repair of the goods;
  • ask for replacement of the goods;
  • sue for damages.
In respect of defective services the consumer may:
  • ask for defective services to be remedied;
  • terminate the services contract if response is unsatisfactory;
  • claim damages.
An important concept is that of "major failure" in respect of goods and services (s 260 (goods) and s 268 (services)). A major failure is where:
(a) goods or services would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
(b) goods depart in one or more significant respects:
(i) if they were supplied by description: from that description; or
(ii) if they were supplied by reference to a sample or demonstration model: from that sample or demonstration model; or
(c) goods or services are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
(d) goods or services are unfit for a disclosed purpose that was made known to:
(i) the supplier of the goods; or
(ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the goods were conducted or made;

and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or
(e) in the case of services,
(i) the services, and any product resulting from the services, are not of such a nature, or quality, state or condition, that they might reasonably be expected to achieve a result desired by the consumer that was made known to the supplier; and
(ii) the services, and any of those products, cannot, easily and within a reasonable time, be remedied to achieve such a result; or
(f) the goods or services are not of acceptable quality because they are unsafe.

Goods - rights to repair, replace, or reject and refund and damages

Where a defect in goods can be remedied and the defect is not a major failure (see above), the customer, or a person to whom the customer has given purchased goods (s 266), can require the retailer to remedy the defect within a reasonable time (s 259(2)) so long as the defect was not due to some independent event that occurred after the goods left the retailer's control. This means that the retailer must (s 261):
  • repair the goods;
  • replace the goods; or
  • refund the price.
If the retailer refuses, or fails to respond within a reasonable time, the consumer may (s 259(2)):
  • have the goods repaired elsewhere and recover the cost from the retailer; or
  • reject the goods.
If the defect cannot be remedied or the defect is a major failure, the customer, or a person to whom the customer has given purchased goods (s 266), can either reject the goods (see below) or claim damages measured by the difference between the price paid and the value of the defective goods (s 259(3)).

It is also possible for the consumer to sue the retailer for damages for any consequential losses incurred because of the defective goods (for example, if a defective toaster caused a fire) (s 259(4)). However, because of the definition of "consumer", business purchases under $40,000 are covered and it is permitted under s 64A for a business to limit its liability to the cost of replacement or repair in respect of goods purchased for business and not domestic purposes (see Can the protection afforded by the ACL be excluded?).

The consumer may take action under against the retailer whether or not the goods are in their original packaging (s 259(7)).

Whenever goods are replaced, the same consumer guarantees apply to the replacement goods (s 264).

Rejection of goods

The consumer may reject the goods if they have a major failure, they cannot be repaired or the retailer has not responded by offering repair or replacement.

To do so, the consumer must return the goods explaining why they are being rejected (ACL s 259(3)(a) and s 263(2)) or must notify the retailer to come and collect them if the goods are not transportable (s 263(2)(b)). The retailer must then refund the price of the goods or replace them (s 263(4)). The retailer cannot require the consumer to buy other goods in lieu of a refund (s 263(5).

Defective goods cannot be rejected (s 262) if:
(a) the rejection period (see below) for the goods has ended; or
(b) the goods have been lost, destroyed or disposed of by the consumer; or
(c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply; or
(d) the goods have been attached to, or incorporated in, any real or personal property and they cannot be detached or isolated without damaging them.

The rejection period is the period within which it would be reasonable to discover the defect having regard to:
(a) the type of goods; and
(b) the use to which a consumer is likely to put them; and
(c) the length of time for which it is reasonable for them to be used; and
(d) the amount of use to which it is reasonable for them to be put before such a defect becomes apparent.

If goods are rejected and a refund is paid, then any service contract that goes with the goods can be terminated (s 265). The customer should notify the service provider if that party is a separate entity from the retailer. The customer is then entitled to a refund representing the remainder of the unused services.

Services - remedies

If the defective services can be remedied and the defect does not constitute a major failure (see [22.6.5.1] above), the customer can require the service provider to remedy the failure (s 267(2)(a)). If the service provider fails to respond or respond within a reasonable time, the customer can have the defective services remedied by another service provider and recover the cost from the original service provider (s 267(2)(b(i)) or terminate the service contract (s 267(2)(b)(ii).

If the defective services cannot be remedied or they constituted a major failure, the customer can terminate the services contract or recover damages measured by the difference between the price paid and the value of the defective services (s 267(3)). The customer can also recover damages for any consequential losses, for example, a fire caused by defective installation of roof bats (s 267(4)).

To terminate the contract the customer should, so far as possible, notify the service provider. Once terminated, the customer is entitled to a refund of the price for any unused services (s 269(3)).

If a services contract is terminated any associated contract for goods can be terminated also. The goods must be returned to the supplier (or, if too difficult to transport, the supplier should be notified to come and collect them) and a refund must be paid by the supplier (s 270).

Remedies against the manufacturer

Minimum standards for goods are enforceable against manufacturers. The ACL provides a right of action to a "person affected" (which means the purchaser or a person who has received the goods as a gift) against a manufacturer who supplies faulty products, that is, goods that are not of acceptable quality, do not conform to a description, do not have spare parts or repair facilities or are in breach of an express manufacturer's warranty (s 271). Under the law of contract the purchaser has no rights directly against a manufacturer because there is no contract with the manufacturer. The legislation provides a statutory right to enforce minimum standards of quality against the manufacturer.

"Manufacturer" is extensively defined in s 7 and includes an importer and a supplier whose brand appears on the goods.

The person affected can seek damages against the manufacturer (ss 271-2) or, if the manufacturer has given an express warranty (usually a 12-month warranty), require the manufacturer to replace or repair the goods. If this does not happen, then the person can sue for damages for breach of the express warranty. The damages claimable include the cost of returning the goods to the manufacturer. The right to damages may be sought whether or not the goods are in their original packaging (s 271(7)).

When goods have been purchased for business purposes, the manufacturer's liability to pay damages to the business consumer is not limited in the way that the retailer may be able to limit its damages, namely, to the cost of replacement or repair (see below).

A claim for damages must be brought within three years of the date on which the defect became obvious or should have been detected (s 273). Note this is not within three years of purchase.

Any attempt by the manufacturer to exclude these provisions is void (s 276).

If a retailer has to incur expense to meet a claim, the retailer has a right of indemnity against the manufacturer (s 274). If the indemnity claim relates to goods not of a kind ordinarily acquired for personal, domestic or household use or consumption, the manufacturer's liability to the retailer is limited to the cost of replacement or repair of the goods unless such limitation of liability would not be fair or reasonable in the circumstances (s 276A)..

A separate Part of the ACL provides rights against a manufacturer in respect of dangerous goods that cause injury, death or property damage (see Rights against Manufacturers in respect of Dangerous Goods).

The right to claim against a manufacturer is usually not very useful because the manufacturer may not be close to hand whereas the retailer will usually be in the locality. So it is usually simpler to complain of faulty goods or services to the company that supplied them.

Rights against Manufacturers in respect of Dangerous Goods

Part 3-5 of the ACL deals with liability of manufacturers and importers for goods which have a safety defect that causes injury. In contrast to the consumer guarantees discussed above, Part 3-5 is about dangerous goods rather than goods that do not perform properly. Section 9 provides that goods are have a safety defect if their safety is not such as persons generally are entitled to expect, having regard to such matters as their marketing, packaging, price, instructions that come with the goods and their normal use.

Who can claim?

An individual who has suffered personal injuries (s 138) or a person dependant on the injured person (s 139) can claim against a manufacturer (which includes an importer in the same way as discussed at Remedies against the manufacturer above) for damages. In addition if goods are defective and cause damage to a person's goods (s 140) or real property (s 141) an action for damages can be brought. If a person dies as a result of injuries caused by defective goods, the cause of action survives for the benefit of his or her estate under State and Territory legislation (s 145).

If the injuries are covered by worker's compensation, then no liability arises under these provisions (s 146).

Unknown manufacturer

If the manufacturer is unknown, the consumer can require the retailer to provide the name of the manufacturer. If the retailer fails to do this, then the retailer is taken to be the manufacturer (s 147).

Defences

The manufacturer may defend a claim in the following ways (s 142):
  • the defect did not exist at the time of supply by the manufacturer;
  • the defect existed only because there was compliance with a mandatory standard for the goods;
  • the state of scientific or technical knowledge at the time when they were supplied by their manufacturer was not such as to enable the defect to be discovered;
  • the goods were incorporated as part of other goods and those other goods were defective.
If the reason why the goods were defective was because of compliance with a Commonwealth mandatory standard, the Commonwealth can be made liable for damages (s 75AL).

Damages may be reduced to the extent that the injured party was at fault in failing to safeguard his or her own safety (Competition and Consumer Act 2010 (Cth) s 137A). .

Time limits

An action must be brought within three years of the plaintiff becoming aware, or ought reasonably to have become aware, of the alleged loss, the defect and the identity of the person who manufactured the goods (s 143(1)). A claim cannot be brought more than 10 years after the supply by the manufacturer of the goods (s 143(2)).

No exclusion

Any attempt to exclude or modify the operation of Part 3-5 is void (s 150).

Australian Consumer Law

Introduction

The Australian Consumer Law (ACL) is Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA) (formerly the Trade Practices Act (TPA)) and has been adopted in all States and Territories. See, for example, the Fair Trading (Australian Consumer Law) Act 2010 (ACT) s 7. Some parts of the ACL came into effect on July 1 2010 and the rest, including State and Territory adoption, came into effect on 1 January 2011. The name of the TPA was changed on 1 January 2011 to Competition and Consumer Act 2010.

In this chapter we have already seen that the ACL covers:
  • misleading and unconscionable conduct (briefly treated under Excuses) ; and
  • consumer guarantees (see Consumer Guarantees), covering both poor quality goods and services and dangerous goods.
In this section, the ACL misleading and unconscionable conduct provisions are examined more closely. Other consumer protection measures in the ACL are then examined.

Note that the Australian Securities and Investments Commission Act 2001 (Cth) prohibits misleading or deceptive conduct, unconscionable conduct and false representations in relation to the supply of financial services. The ACL expressly excludes its application to financial services (CCA s 131A). "Financial services" are very elaborately defined in the Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA and 12BAB. Broadly they cover the provision of investment and financial products, including risk management.

Misleading or Deceptive Conduct

The ACL s 18(1) (formerly TPA s 52(1)) provides that "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." In addition to applying to persons generally, this section applies as a Commonwealth law to the conduct of corporations (CCA s 131).

The section merely imposes a standard on the market place. Remedies for misleading conduct are found elsewhere in the legislation and include damages, injunction, rescission of contract and other measures. These are discussed below (see Remedies).

This section has had a profound effect on Australian commerce. It has generated a vast case law. For a detailed treatment see Seddon and Ellinghaus, paras 11.102-11.136.

Although s 18 appears in the Australian Consumer Law, the section is not limited to consumer transactions or dealings. Many of the cases on misleading conduct are business-to-business cases.

In addition it is a very useful law for consumers to use when an over-enthusiastic sales person has persuaded the consumer to buy with statements that turn out not to be correct. The remedies available for misleading conduct (see Remedies below) are in addition to, and independent of, the remedies available for breach of consumer guarantees discussed above at What remedies are available?.

The concepts of misleading or deceptive conduct have been taken at face value by the courts. "Deceptive" requires an intention to deceive (fraud) and so is of little relevance because proving fraud is difficult. But "misleading" requires no intention or particular state of mind. In fact the prohibition of misleading conduct imposes a strict liability not to lead another into error in commercial and consumer dealings. Case law has established that an innocent (non-fraudulent and non-negligent) statement may generate liability.

It is also possible to be liable for what was not said if the failure to speak up was in context misleading. This usually arises when a person has made a statement but fails to qualify it sufficiently.

The impact of s 18 (and its former manifestation TPA s 52) has been very wide. False advertising is caught by this legislation and it is possible for anyone to put a stop to a misleading advertisement, but this is usually left to the ACCC or sometimes a rival trader. This treatment focuses on the contract-related effect of the legislation, that is, usually misleading conduct in the lead-up to a contract or during the running of the contract.

The courts have been wary about allowing statutory misleading conduct in effect to displace the law of contract. Consequently it has been held that making a promise and then later not keeping it is not misleading conduct unless the promise was not genuinely made in the first place (that is, it was fraudulent which is difficult to prove). Even so, some types of promises, for example about the performance or capability of a product, have generated liability under this legislation.

Who is bound?

A. Corporations and persons

The ACL applies generally to persons but also applies to corporations under CCA s 131.
B. Government bodies

The ACL binds each government only "in so far as it carries on a business" (CCA s 2A; Fair Trading Act 1992 (ACT) s 15). Case law has shown that governments do not carry on a business in respect of almost all of their commercial activities (that is, principally procurement). The result is that each government is very substantially exempt from the ACL.

In trade or commerce

The allegedly misleading conduct must occur in trade or commerce. This has been interpreted very broadly by the courts and covers any kind of commercial activity, including the dealings before a contract is made. It is easier to state where the legislation does not apply than to discuss the huge number of case where it does apply. It does not apply to
  • private, one-off sales, for example, the sale of a car after having advertised it in The Canberra Times;
  • internal communications within an organisation, such as a company or government department;
  • regulatory activity by government bodies;
  • provision of information by government in a non-commercial context, for example, information about pension rights; or
  • political statements.
The conduct of tenders by government is in trade or commerce as are ordinary procurement activities but governments are immune unless they are carrying on a business. Procurement is not carrying on a business - see Who is bound?.

Strict liability

Mention has been made already of the strict liability imposed as a result of the word "misleading" (but not "deceptive" which requires a guilty mind). This is one of the most remarkable things about the legislation. It is not to the point for a person accused of misleading conduct to say that he or she did not know that the information was incorrect or that he or she took all due care when preparing the information. The only question is: was it misleading? Did it lead the other party into error? An innocent person can be found to have engaged in misleading conduct.

The strict liability principle in relation to misleading conduct has two possible exceptions:
1. If the misleading conduct consists of making a statement about the future, the person making the statement can defend by proving that he or she had reasonable grounds for believing that the prediction was correct (ACL s 4);
2. A person who acts as a "mere conduit" for information that turns out to be incorrect can defend an action based on misleading conduct. It must be clear that the provider of the information is not in any way responsible for it and is just passing it on for what it is worth. See Seddon and Ellinghaus, para 11.121.

Remedies

The remedies available under the legislation are much more generous than under the law of contract. A person complaining of misleading conduct may
  • seek compensatory damages (ACL s 236);
  • seek an injunction (principally applicable to advertising cases) (ACL ss 232-235); or
  • seek various other remedies (a long list of options available to a court, including rescission of contract in whole or in part, modification of a contract and "such order or orders as(the court thinks appropriate") (ACL ss 237 and 243).
  • It is not possible to claim damages in respect of misleading or deceptive conduct if the person misled suffered personal injuries or death (CCA ss 137C, 137D and 137E). This measure was introduced in the wake of the so-called insurance crisis after the collapse of HIH. There is no such limitation under the Fair Trading Act 1992 (ACT).

Contributory fault

If the person complaining of misleading conduct was in part to blame for the loss or damage suffered then, under the Commonwealth CCA, damages can be reduced (CCA s 137B). Note that this section is not in the ACL itself and so State or Territory adoption of the ACL does not adopt this provision. The State and Territory Fair Trading Acts have no such provision which means, according to High Court authority, that a person who engaged in misleading conduct must bear the full loss even though the misled party was partly to blame for some of the loss suffered: I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002). The misled party should sue under the State or Territory Fair Trading Act if there is a chance that damages could be reduced. However, if the defendant is a corporation, it is bound by the Commonwealth CCA and so reduction of damages for contributory fault can apply.

No exclusion

It is not possible to draft a clause in a contract that effectively removes potential liability for misleading conduct. There have been many attempts and almost universal failure. This is not because there is any section in the legislation which prohibits contracting out, as is common in other legislation discussed in this chapter. Instead, the courts take the view that parliament has set a standard of conduct by legislation and it is not possible to contract out of that. So long as a person has been misled in trade or commerce, no contractual device can remove this fact. This applies no matter what form the clause takes.

However, it is possible to qualify the information so as to make it not misleading if it turns out to be wrong. The High Court in Butcher v Lachlan Elder Realty Pty Ltd (2004) held that an inaccurate survey diagram, included in a real estate agent's brochure for an expensive house, was not misleading because of a disclaimer in the brochure that stated that information provided may not be accurate and that potential buyers should check for themselves. Note that this was a disclaimer in the brochure which contained the misleading information. It is still true after this decision that an exclusion clause buried in the fine print of the contract will not be effective.

Time limit

An action based on misleading conduct must be brought within 6 years of the accrual of the cause of action (ACL ss 236(2) and 237(3)).

Unconscionable Conduct

We have seen that the general law recognises a concept of unconscionable conduct, particularly in connection with negotiations prior to a contract (see Undue influence and unconscionability). The remedy for the victim of unconscionable conduct under the general law is rescission of the contract which, as described above, is a somewhat limited remedy.

Unconscionable conduct is also the subject of provisions in the ACL.

There are three different types of unconscionable conduct under the ACL:
1. unconscionable conduct under the "unwritten law" (ACL s 20);
2. unconscionable conduct affecting consumers (ACL s 21); and
3. unconscionable conduct affecting small business (ACL s 22).

Unconscionable conduct under the unwritten law

Section 20 of the ACL states that a person (which includes a corporation) must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law from time to time. The purpose of this section is principally to widen the range of remedies available to the victim of unconscionable dealing. It also enables the ACCC to investigate unconscionable conduct and, if necessary, bring legal action on behalf of the person who has been treated unconscionably.

The remedies described above for misleading conduct are equally available for unconscionable conduct.

Section 20 appears to refer to the doctrine of unconscionable dealing (particularly the Amadio case discussed under Undue Influence and unconscionability) as it has been interpreted in case law. However, the words are perfectly general and the courts have not yet settled on what constitutes unconscionable conduct under 'the unwritten law' and it may go beyond the doctrine of unconscionable dealing to include other equitable doctrines (for example, equitable estoppel).

Unconscionable conduct affecting consumers

The ACL s 21 provides that a person (which includes a corporation) must not, in trade or commerce, in connection with the supply, or possible supply of goods or services to a person, engage in conduct that is, in all the circumstances, unconscionable.

This provision protects "persons" but the general definition of "consumer" in s 3, discussed above in Who is a consumer?, in connection with consumer guarantees does not apply. Instead the protection provided by s 21 is only available in respect of goods or services "of a kind ordinarily acquired for personal, domestic or household use or consumption" (ACL s 21(5)). The significance of this is that the $40,000 limit does not apply. The effect of that limit was that business purchases under $40,000 were deemed to be consumer purchases. Under s 21 there is no monetary limit but the goods or services must be of a kind ordinarily acquired for personal, domestic or household use or consumption. This would cover some business purchases (for example a microwave for the staff kitchen). Other business purchases or sales are covered by s 22 (discussed below).
Considerations to be taken into account

Section 21(2) of the ACL provides some guidance as to what amounts to unconscionable conduct. In other words, the meaning of unconscionable conduct is not left to the general law (as in s 20). The subsection lists a number of considerations to which the court may have regard. In brief, they are:
a) the respective bargaining strengths of the parties;
b) whether the consumer was required to comply with conditions not reasonably necessary for the protection of the other party;
c) whether the consumer understood documents relating to the transaction;
d) whether any undue influence or unfair tactics were used against the consumer; and
e) the price and circumstances under which the consumer could have acquired the goods or services from a third party.

These factors are only a guide and the list is not exhaustive. Conduct may be considered to be unconscionable where there has been serious misconduct or unfairness.

Unconscionability requires that the party alleged to have acted unconscionably was aware of the other party's vulnerability and then took advantage of that vulnerability by proceeding with a transaction. How does this apply to a corporation whose various employees may be dealing with a customer? In ACCC v Radio Rentals Ltd (2005) it was held that it is not possible to aggregate the dealings of various employees of a corporation which together could be seen as exploitative but where each employee was unaware of the disability of the customer and had no reason to know of it. In other words, it is not possible to build a case of unconscionable conduct against a corporation by notionally aggregating the states of mind of its various employees.

As with misleading or deceptive conduct, the prohibition applies to any conduct, not just conduct at the time of entering into a contract.

A clause in a contract can also be declared unconscionable, even if there was no unconscionable conduct in the way the contract was signed. For example, in George T Collings v HF Stevenson (Aust.) Pty Ltd (1991), the court held that a clause in the fine print of a contract that created an onerous obligation was unconscionable.

However, the majority of the case law to date has dealt with procedural unfairness, that is, in relation to matters leading up to the formation of a contract, rather than with the substantive unfairness of a contract itself.

Unconscionable conduct affecting small business

ACL s 22 prohibits misleading conduct affecting small business. This is not, however, apparent from the section itself which makes no mention of small business. Section 22 provides:
(1) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of goods or services to another person (other than a listed public company); or
(b) the acquisition or possible acquisition of goods or services from another person (other than a listed public company);
engage in conduct that is, in all the circumstances, unconscionable.

At the time when this section (formerly s 51AC of the TPA) was introduced into parliament, it was said that it was designed to protect small business, such as franchisees or small shopkeepers in large shopping malls when dealing with big business. This is done somewhat crudely by limiting the "victims" of unconscionable conduct: they must not be listed public companies. Other than that, there is no guidance as to its intended application to small business transactions.

Subsections 22(2) and (3), like s 21(2), include a list of factors that may amount to unconscionable conduct where the small business is either a consumer or a supplier of goods or services. The list is somewhat more extensive than that in s 21. In addition to the factors listed above in connection with s 21, s 22 includes:
the extent to which the supplier's conduct towards the business consumer was consistent with the supplier's conduct in similar transactions between the supplier and other like business consumers;
the requirements of any applicable industry code (for example, the code applying to franchise contracts);
the extent to which the supplier unreasonably failed to disclose to the business consumer:
(i) any intended conduct of the supplier that might affect the interests of the business consumer; and
(ii) any risks to the business consumer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the business consumer);
the extent to which the supplier was willing to negotiate the terms and conditions of any contract for supply of the goods or services with the business consumer;
whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the business consumer for the supply of the goods or services; and
the extent to which the supplier and the business consumer acted in good faith.

As with s 21, these factors are merely guides and are not definitive of what amounts to unconscionable conduct.

Time limit

An action based on unconscionable conduct must be brought within 6 years of the accrual of the cause of action (ACL ss 236(2) and 237(3)).

Unfair Contract Terms

The ACL includes a new unfair contract terms part (Part 2-3) under which the terms of standard form contracts can be challenged as unfair. This came into effect on July 1 2010 in the first tranche of the ACL. A successful challenge results in the term being declared void. In addition, if a court declares a term or terms to be unfair under s 250, additional remedies are available for a consumer who has suffered loss as a result of the declared term being used.

It will be seen below that the path to making a successful challenge to a contract term involves multiple concepts. If one of these is not established, then the challenge will fail. It will accordingly be very difficult for an individual to mount a successful case, particularly as the other side will probably be a well-advised corporation. This part of the ACL is not consumer friendly and would usually require the assistance of lawyers.

What contracts are affected by unfair contract terms?

Part 2-3 applies to consumer standard form contracts as defined (see below) and is only available to individuals (that is, a company could not mount a challenge).

The ACL unfair contract terms regime does not apply to:
a term that defines the main subject-matter of the contract (ACL s 26(1)(a));
a term that sets the upfront price of the goods or services being purchased (ACL s 26(1)(b));
a contract of marine salvage or towage (ACL s 28(1)(a));
a charterparty of a ship (ACL s 28(1)(b));
a contract of carriage of goods by ship (ACL s 28(1)(c);
a constitution of a corporate body (ACL s 28(3));
 
insurance contracts governed by the Insurance Contracts Act 1984 (Cth) (Insurance Contracts Act 1984 s 15); or
contracts for financial services or products (CCA s 131A(2)(b)).

Standard form consumer contracts

Part 2-3 applies to consumer contracts which are standard form contracts (ACL s 23(1)), A consumer contract is a contract:
  • where the consumer is an individual; and
  • goods, services or an interest in land are acquired wholly or predominantly for personal, domestic or household use or consumption.
Note the different test here from that used in connection with consumer guarantees (see Who is a consumer?).

The test here does not include a $40,000 threshold and is based on actual use rather than goods, etc of a kind that are used for domestic or household purposes.

A contract is presumed to be a standard form contract unless the supplier adduces evidence to the contrary (ACL s 27(1)). If a court has to decide whether a contract is a standard form contract, it must consider (s 27(2)):
  • whether one of the parties has all or most of the bargaining power relating to the transaction;
  • whether the contract was prepared by one party before any discussion relating to the transaction occurred between the parties;
  • whether another party was, in effect, required either to accept or reject the terms of the contract in the form in which they were presented;
  • whether another party was given an effective opportunity to negotiate the terms of the contract;
  • whether the terms of the contract (other than the terms referred to in s 26(1)) take into account the specific characteristics of another party or the particular transaction.

Meaning of "unfair"

A term of a standard form consumer contract is unfair (s 24(1)) if:
  • it would cause a significant imbalance in the parties' rights and obligations arising under the contract; and
  • it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
  • it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
It is presumed that a term is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term unless that party proves otherwise (ACL s 24(4)).

In deciding whether a term is unfair a court may consider any matters that are relevant but must take into account (s 24(2)):
  • the extent to which the term is transparent; and
  • the contract as a whole.
The test of whether a term is transparent (s 24(3)) is whether the term is:
  • expressed in reasonably plain language; and
  • legible; and
  • presented clearly; and
  • readily available to any party affected by the term.
In addition to these criteria there is a "grey list" that is similar in purpose to the lists of what could constitute unconscionable conduct under ss 21 and 22, that is, the examples are guides but not definitive of what would be held to be unfair.

Remedies

If a court decides that a term is unfair the term is void (s 23(1)). So far as possible the rest of the contract should continue to operate (s 23(2)).

Voidness is the only result of a successful challenge to a term of a standard form contract. There is no right to damages or other remedies following a challenge.

It is possible for a court to make a declaration that a particular term of a standard from agreement is unfair under s 250. Presumably this would usually only be done at the behest of a regulatory body such as the ACCC. Once a s 250 declaration has been made, further remedies are available. On application by a person who has suffered loss or damage or on the application of the regulator, a court can grant an injunction (s 232(3)) or make such orders as the court thinks fit (s 237(1)) and can, on application by the regulator, also make orders in favour of non-party consumers who have been affected by the declared unfair term (s 239).

Other Misleading or False Representation Provisions in the Australian Consumer Law

In addition to the general prohibitions of misleading or deceptive conduct and unconscionable conduct, the ACL also includes a number of provisions that deal with various misleading or false representations or other unacceptable practices in specific circumstances. All of these provide both civil remedies for breaches and constitute offences under Part 4-1 of the ACL. They are:
  • various false representations in connection with the supply or promotion of goods or services (s 29)) including making a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (which includes consumer guarantees under the ACL) (s 29(1)(m)) or trying to persuade someone to buy an extended warranty when sufficient protection is already provided under the legislation (s 29(1)(n) - see discussion of The 12-month warranty and extended warranties above);
  • false representation, misleading or offensive conduct in relation to land (s 30);
  • misleading conduct in relation to employment (s 31);
  • falsely offering gifts and prizes (s 32);
  • misleading conduct as to the nature, manufacturing process, characteristics, suitability for purpose or quantity of goods (s 33);
  • misleading conduct in relation to services (s 34);
  • prohibition of bait advertising (s 35);
  • prohibition of accepting payment without intending or being able to supply goods or services as ordered (s 36);
  • misrepresentation about home-operated businesses (s 37).
A business that engages in any of these practices can, in addition to being liable to civil remedies such as damages, rescission of contract, and so on, be prosecuted under ACL Part 4-1, whereas engaging in misleading conduct or unconscionable conduct (ss 18-22) only attracts civil remedies for parties adversely affected.

Unsolicited Supplies

There are also provisions dealing with unsolicited supplies. They provide for:
  • prohibition of sending unsolicited credit or debit cards (s 39);
  • prohibition on asserting a right to payment for unsolicited goods or services or for making an entry in a directory (ss 40 and 43);
  • regulation of the rights of recipients of unsolicited goods (s 41) or services (s 42);

Pyramid Selling

The ACL s 44 prohibits a person from participation in, or inducing another to participate in, a pyramid selling scheme. These provisions are quite detailed because it is necessary to differentiate between legitimate promotional schemes and prohibited pyramid selling.

A pyramid selling scheme is defined as a scheme with both the following characteristics:
(a) to take part in the scheme, some or all new participants must make a payment (a participation payment ) to another participant or participants in the scheme; and
(b) the participation payments are entirely or substantially induced by the prospect held out to new participants that they will be entitled to a payment (a recruitment payment) in relation to the introduction to the scheme of further new participants.

Pricing

The Australian Consumer Law deals with various pricing practices. It is prohibited for a person to display multiple prices for goods and not be prepared to sell for the lowest displayed price (s 47). It is also required that a single price be displayed in certain circumstances (s 48).

Other unfair practices

Referral selling

Referral selling is prohibited under s 49. Referral selling is where a customer is told that he or she will receive a rebate, commission or other benefit in return for:
(a) giving the person the names of prospective customers; or
(b) otherwise assisting the person to supply goods or services to other consumers

if receipt of the rebate, commission or other benefit is contingent on an event occurring after that contract is made.

Harassment and coercion

Under ACL s 50, a person must not use physical force, or undue harassment or coercion, in connection with:
(a) the supply or possible supply of goods or services; or
(b) the payment for goods or services; or
(c) the sale or grant, or the possible sale or grant, of an interest in land; or
(d) the payment for an interest in land.

Unsolicited Consumer Agreements (Door-to-Door Sales and Similar Practices)

Elaborate provisions of the Australian Consumer Law (Part 3-2 Division 2) regulate the practice of door-to-door or telephone selling called an "unsolicited consumer agreement". These provisions cannot be modified or excluded by contract (s 89) nor is a consumer competent to waive rights provided by this legislation (s 90). Breaches of these provisions constitute offences under ACL Part 4-2 Division 2.

The legislation deals with the possibility that either the consumer or the supplier may assign its rights under an unsolicited consumer agreement in which case the agreement can be enforced by, or against, the assignee (s 91). If goods or services are bought for a third party then that third party has the same rights as the original purchaser (s92).

Definition of unsolicited consumer agreement

An agreement is an unsolicited consumer agreement (s 69) if:
(a) it is for the supply, in trade or commerce, of goods or services to a consumer (that is, as defined for the purpose of consumer guarantees see Who is a consumer?; and
(b) it is made as a result of negotiations between a dealer and the consumer:
(i) in each other's presence at a place other than the business or trade premises of the supplier of the goods or services; or
(ii) by telephone;
whether or not they are the only negotiations that precede the making of the agreement; and
(c) the consumer did not invite the dealer to come to that place, or to make a telephone call, for the purposes of entering into negotiations relating to the supply of those goods or services (whether or not the consumer made such an invitation in relation to a different supply); and
(d) the total price paid or payable by the consumer under the agreement:
(i) is not ascertainable at the time the agreement is made; or
(ii) if it is ascertainable at that time - is more than $100 or such other amount prescribed by the regulations.

"Dealer" is defined in s 71 to mean a person who either enters into negotiations or telephones for the purpose of making a sale. There is a presumption under s 70 that the agreement is an unsolicited consumer agreement if one party asserts that it is and the other party does not prove otherwise.

Negotiating an unsolicited consumer agreement

Sections 73-77 specify certain requirements for the negotiating process.

A dealer must not without prior agreement call on a person to negotiate an unsolicited consumer agreement on Sundays or public holidays or before 9.00am or after 6.00pm (5.00 pm on Saturdays) on other days (s 73);

The dealer must disclose his or her purpose, tell the customer that the dealer will leave on request and provide any prescribed details about the dealer specified in the Regulations (s 74);

The dealer must leave the premises on request by the customer and must not attempt to contact the customer in the next 30 days (s 75);

The dealer must tell the customer about the cooling off period (see Terminating unsolicited consumer agreements ("cooling off period")) before any sale is made and this must be confirmed in writing (whether negotiations are face to face or by telephone) (s 76). The form of writing may be the subject of prescription by Regulation.

If a dealer acting for the potential supplier other than the dealer breaches these requirements, the supplier is also in breach (s 77).

Requirements for unsolicited consumer agreements

Section 78-81 set out the requirements for securing the sale.

The dealer must provide a copy of the signed written agreement to the customer immediately with a face-to-face sale and within 5 business days (or such longer period as has been agreed) in the case of a telephone agreement. The agreement can be delivered by post, personally or by email if the customer has consented (s 78).

Section 79 provides that the agreement itself:
(a) must set out in full all the terms of the agreement, including:
(i) the total consideration to be paid or provided by the consumer under the agreement or, if the total consideration is not ascertainable at the time the agreement is made, the way in which it is to be calculated; and
(ii) any postal or delivery charges to be paid by the consumer;
(b) its front page must include a notice that:
(i) conspicuously and prominently informs the consumer of the consumer's right to terminate the agreement; and
(ii) conspicuously and prominently sets out any other information prescribed by the regulations; and
 
(iii) complies with any other requirements prescribed by the regulations;
(c) it must be accompanied by a notice that:
(i) may be used by the consumer to terminate the agreement; and
(ii) complies with any requirements prescribed by the regulations;
(d) it must conspicuously and prominently set out in full:
(i) the supplier's name; and
(ii) if the supplier has an ABN: the supplier's ABN; and
(iii) if the supplier does not have an ABN but has an ACN: the supplier's ACN; and
(iv) the supplier's business address (not being a post box) or, if the supplier does not have a business address, the supplier's residential address; and
(v) if the supplier has an email address: the supplier's email address; and
(vi) if the supplier has a fax number: the supplier's fax number;
(e) it must be printed clearly or typewritten (apart from any amendments to the printed or typewritten form, which may be handwritten);
(f) it must be transparent.

Section 80 provides that if the dealer is acting for a supplier in a fact-to-face sale then the dealer's details must be given to the customer.

Any amendments to the written document must be signed by both parties (s 81).

Terminating unsolicited consumer agreements ("cooling off period")

The customer has the right under s 82 to terminate, verbally or in writing (no formalities are specified), for no reason (often called a "cooling off period"). The time within which this right may be exercised varies but in the ordinary case it is 10 business days from signing in the case of a face-to-face sale or 10 business days from delivery of the written agreement in the case of a telephone sale.

The cooling off period is 3 months if the dealer has contravened s 73 (permitted hours for negotiating an unsolicited consumer agreement), s 74 (disclosing purpose and identity) or s 75 (ceasing to negotiate on request).

The cooling off period is 6 months if the dealer has contravened s 76 (informing consumer of termination period), any of the requirements set out in Requirements for unsolicited consumer agreements above or s 86 (prohibition on supplying for 10 business days).

The effect of termination is that the contract is taken to have been rescinded by mutual consent and any "related contract or instrument" is void (s 83). A "related contract or instrument" includes a guarantee, indemnity or mortgage/charge taken by the supplier but does not include a tied continuing credit contract or linked credit provider arrangement within the meaning of ss 127(2) or (3) of the Schedule to the National Consumer Credit Protection Act 2009).

The customer can terminate even if the goods or services have been partly or wholly consumed or used (s 83(3)(b)). This is justified by the prohibition in s 86 on supplying the goods or services or receiving payment for them for 10 business days after contract signing or delivery in the case of a telephone contract. In other words there is a cooling off period on performance of the contract as well.

Once termination is effected, the supplier must refund any money paid (ss 84 and 87) and the customer must return any goods not consumed or notify the supplier where they can be collected (s 85). If the supplier fails to collect them within 30 days the goods become the property of the consumer. The customer may be liable to compensate the supplier for damage to goods due to lack of care by the customer but not for fair wear and tear. The customer may also be liable to pay for any service delivered after the 10-day cooling off period.

The supplier must not attempt to enforce a terminated contract nor provide the customer's name as a defaulter or debtor to a credit agency (s 88).

Lay-by Agreements

Lay-by agreements are regulated under Part 3-2 Division 3 of the ACL. Breaches of these provisions constitute offences under ACL Part 4-2 Division 3.

What is a lay-by agreement?

A lay-by agreement is an agreement between a supplier of consumer goods and a consumer for the supply, in trade or commerce, of the consumer goods on terms (whether express or implied) which provide that:
(a) the goods will not be delivered to the consumer until the total price of the goods has been paid; and
(b) the price of the goods is to be paid by:
(i) 3 or more instalments; or
(ii) if the agreement specifies that it is a lay-by agreement-2 or more instalments.

Both "consumer goods" and "consumer" are defined in s 2. "Consumer" is the same definition as for consumer guarantees (see Who is a consumer? and "consumer goods" are defined to mean goods that are intended to be used, or are of a kind likely to be used, for personal, domestic or household use or consumption.

The seller's obligations

The seller must provide a written copy of the agreement to the customer and must ensure that the agreement is transparent (s 96(1)and (2)). Any deposit paid by the consumer must be treated as an instalment (s 96(4)).

Consumer's right to terminate

The consumer may terminate the lay-by agreement at any time before delivery of the goods (s 97). The supplier can charge a termination charge if the consumer terminates so long as the supplier was not in breach, the agreement provided for the termination charge and the charge reflected the reasonable costs to the supplier of the consumer terminating the agreement. The supplier must otherwise return all payments (s 99).

Supplier's right to terminate

If the consumer is in breach of the agreement the supplier can terminate it in which case the payments made by the consumer must be returned (ss 98 and 99). It appears that the supplier cannot charge a termination charge in this circumstance because s 97(2) only allows a termination charge if the consumer terminates the agreement.

The supplier can also terminate if the supplier ceases business or the goods the subject of the agreement are no longer available.

#OtherConsumerProtectionLegislation

Pawnbrokers

Pawnbroking in the ACT is governed by the Pawnbrokers Act 1902 (originally a New South Wales Act).

Definition

A pawnbroker is a person who carries on the business of lending money on the security of an article taken by the person by way of pawn, pledge or as security. This definition does not apply to a person who holds securities for loans in the course of commercial and banking business if the interest rate does not exceed 14 per cent (s 4).

Licensing of pawnbrokers

Pawnbrokers must be licensed (s 6) and the name must be displayed outside the premises (s 7). It is illegal to carry on the business of pawnbroking other than at the licensed premises (s 8(1)). The licence must be produced on demand made by the police (s 8(2)).

Application for a licence is made to the commissioner of fair trading on the approved form (s 5). The commissioner must be satisfied as to the character of the applicant before issuing a licence. The licence is valid for one year only and a separate licence is needed for each premises used for the business.

Part 4 of the Act deals with various matters relevant to licensing, including defining who is a suitable person to hold a pawnbroker's licence.

Protection of borrowers

A pawnbroker must not lend to children under 14 or to someone who is drunk (s 8(3)).
A. Record of transaction

A record book must be kept by the pawnbroker and when an article is accepted a numbered record must be made giving a reasonable description of the article, the date of pledge, the time for redemption if it is to exceed three months, the money advanced, the rate of interest and the name and residence of the person pawning the article (s 9). A duplicate of the entry must be signed by the pawnbroker and given to the customer (s 10).

The duplicate must be produced when the article is redeemed (s 11(1)). The holder of the duplicate is deemed to be the owner of the goods and is, subject to what is said below about lost records, entitled to redeem them (s 12(2)). A person who attempts to redeem an item when that person is not the rightful owner may be apprehended by the pawnbroker and delivered to the police (s 20).
B. Lost or stolen record

If the duplicate has been lost or stolen, the customer must swear a statutory declaration setting out the circumstances of the loss. If the pawnbroker is satisfied of the veracity of the declaration, he or she must give the customer a new record of the pawned item so long as the item has not already been redeemed (s 11(2) and (3)).

If the pawnbroker refuses to redeem a pawned item, he or she must immediately inform the police and provide the name and address of the person who attempted to redeem the item (s 12(4)).
C. Redemption period and sale

If the item is not reclaimed by repaying the money within three months (or such longer period as is specifically agreed) it will be forfeited to the pawnbroker and may be sold (s 13). It is illegal to agree to a shorter period than three months. It is illegal to sell the item before the expiry of the redemption period (s 14).

If an item is forfeited and the loan to which it related was more that $500, the item must be sold by public auction after proper advertisements have been placed in an ACT newspaper (s 15).

It is illegal for the pawnbroker to buy a forfeited item (s 16).

If the sale price exceeds the amount owing by the customer, the customer can apply to be paid the excess within 12 months of the sale (s 17).

The pawnbroker must keep full records of items sold and must make the relevant record available to a person whose goods have been forfeited if that person requests to see the record (ss 18-19).

Sale of Motor Vehicles

Sale of motor vehicles by dealers is regulated by the Sale of Motor Vehicles Act 1977 (ACT). This Act is fully discussed in chapter 20.

Energy and Water Supply

Sale of electricity, gas, water and sewerage services in the ACT is regulated by the Utilities Act 2000 (ACT) and Codes made under the Act. The Consumer Protection Code, made under the Utilities Act by the Independent Competition and Regulatory Commission, includes significant consumer protection provisions for energy and water customers. This Act and the Code are discussed in chapter 57.

Codes of Practice

Under Part 3 of the Fair Trading (Australian Consumer Law) Act 1992 (ACT), 3 codes of practice for various activities can be established. Some of these relate to consumers. There are codes of practice for the fitness industry, cemeteries and crematoria, drinking water, sexual services, driving instruction and pet grooming. A consumer of these services can complain to the Commissioner for Fair Trading if not satisfied with the services. The Commissioner has the power to seek undertakings from the supplier, including to stop certain conduct and to implement remedial action (s 24).

ECommerce and Online Shopping

Introduction

There are no laws in Australia that specifically deal with online shopping. Legally the same requirements exist whether the purchase is conducted over the internet or offline (for example, shopping at a retail outlet). Therefore, when you buy goods or services over the internet from an Australian supplier, Australian consumer protection laws (discussed in this chapter) apply. If the supplier is based overseas, see Overseas purchases and consumer protection laws.

Other consumer protection

If you are buying goods and/or services over the internet, other consumer protection laws may also apply, depending on your circumstances.

Consumer credit laws regulate the purchase of goods or services by credit, for example, credit cards, home loans, personal loans, associated mortgages and leases (see chapter 23 Credit and Finance).

Electronic Funds Transfer Code of Conduct (EFT Code) is a voluntary code that protects consumers and applies to member organisations. The EFT Code regulates methods of access during an electronic transaction, such as the use of an ID number, password, PIN or digital signature; and transactions that utilise stored value facilities and digital coins for electronic payment. For a link to a copy of the EFT Code, see Contacts and Links.

How To Protect Yourself when Shopping Online

Before you buy a good or service, you should find out the following information.

Who is the trader?

Establish who is selling the goods or services, including details of the supplier's business: physical address and business registration details (for example, business name, ACN/ABN and contact details.

The Australian Securities & Investments Commission (ASIC) has a free service on its website (<a name='_Hlk201743255'></a>www.asic.gov.au) allowing users to search for registered business names. ACN and ABN of Australian organisations are located at: www.search.asic.gov.au/gns001.html.

What are the details of the transaction?

Knowing the full details of the transaction before entering into an agreement with the supplier will help you to know what to expect if you buy the goods or service. Details you should obtain include:
  • a clear description of the goods or service;
  • the full cost in Australian dollars of the goods or service being purchased, including costs like delivery, insurance and credit card charges;
  • any return, exchange, refund and warranty policy that the supplier has regarding the transaction;
  • when you will receive the goods or service;
  • the terms of any insurance over the goods or service bought (for example, whether it includes damage of the goods while in transit);
  • the terms and conditions of the agreement. Read them carefully as they outline what you agree to be bound by. Always print out any terms and conditions that you agree to because traders may change them subsequently. Keep any correspondence (including emails) between you and the trader and print out any forms that you fill in and any offers on web pages that you accept, as they will be relevant to your transaction; and
  • the trader's policy on handling complaints and resolving disputes.

Are there any privacy and security concerns?

Always check for a privacy policy on the trader's website. The policy should outline why the trader collects your personal information and how that information will be used. Traders might want to use your personal information for marketing purposes or even to sell it to third parties such as direct selling organisations. The trader's privacy policy should tell you if this is so. If there is no privacy policy on the trader's website then you should be concerned, because the trader is not informing you of what will happen to any personal information that you submit.

Consumers often use credit cards when shopping online. This involves having to submit your credit card details over the internet. The nature of the internet means that transmitted information may be intercepted by a third party. In order to minimise the risk, you should make sure that the trader is using a secure system for transferring information during a transaction. The most common method of security used in online shopping is the Secure Sockets Layer (SSL) technology. SSL technology encrypts data transmitted in order to protect the information being sent, including your credit card details.

An unbroken key or padlock at the bottom of your web browser will indicate whether there is a secure connection, and whether the information you will send will be encrypted. To obtain information about the security used by the website, you can double-click on the unbroken key or padlock.

Internet Auctions

Consumer protection laws

Internet auction sites (for example, EBay) provide a mechanism for individuals to enter into transactions with each other -- often referred to as consumer-to-consumer (C2C) transactions. If the website operator has control over the goods being auctioned it is likely to be regarded as a business-to-consumer (B2C) transaction. If the website is acting as a trading centre it is more likely to be a C2C transaction provided that the vendor is not a business using the site to clear stock. C2C transactions conducted through internet auctions may be regarded as private sales between individuals, and not as trade or commerce (and therefore not caught by the Australian Consumer Law or its predecessor Trade Practices Act 1974 (Cth)). This does not mean that the consumer has no rights in this situation, but they have fewer rights than if consumer protection laws applied.

If you buy a good or service through an internet auction and consumer protection laws do apply (because you bought from a business or in the course of trade or commerce) you may still have lower protection than if you had not bought the item at an auction. This is because the some of the consumer guarantees (as discussed in [22.6] above) do not apply when the goods are purchased at an auction.

Before bidding at an internet auction

Read the auctioneer's terms and conditions, policies and rules, to understand the service the auctioneer is providing and what to expect. If there is a tutorial on the auctioneer's website on how to use the site, take it in order to familiarise yourself with the services offered. Look at how frauds and complaints are handled by the auctioneer. Some auction sites offer protection to successful bidders in the form of free insurance of up to a specified amount when things go wrong, for example, if the item purchased is not delivered. Verify the seller's identity and contact details.

Make arrangements with the seller about what to do if there is a problem. If you have any queries, contact the seller for answers. If their answers are unsatisfactory, do not make a bid.

Check for any feedback comments or ratings about the seller on the internet auction website. Comments from previous purchasers will help you decide whether to participate in the auction.

Know the product that interests you. Look at the market or retail price, written descriptions and any photographs of the product and any warranties.

Find out the terms of sale, including who pays for shipping and handling; whether there is insurance, what it covers, who pays for it and what it costs; whether there is a return policy; and what payment mechanism will be used.

When making a bid at an internet auction

Set the maximum price that you are willing to pay for the good and do not exceed that price in your bid. The maximum price will include all costs, including items like insurance, taxes, shipping and handling. Setting limits on what you are willing to pay will help to prevent you from bidding excessive amounts for an item where its bidding price has been inflated by fake bids. Although fake bids are not allowed by auction websites, such activities do occur and are a concern.

A good method of payment when shopping online is to pay the supplier when the product has been delivered (cash on delivery). If the seller does not agree to such an arrangement, then a credit card should be used, because of the "charge-back" service that many financial institutions attach to their credit cards (reversing the card charge if the seller fails to deliver the product).

Sending a bank cheque or money order before receiving goods exposes you to higher risks of fraud. If sellers will not send the product unless there is such a payment, then you have to be willing to take the risk.

An alternative is to use an escrow agent. The escrow agent's role is to hold the payment for the buyer until they receive the product. Escrow agents are used to protect both parties from fraud, and usually charge the buyer a percentage of the cost of the product for the service. If you use an escrow agent you should be familiar with the terms of the service offered, and check to see whether the agent is reputable.

Always keep records, either by saving on your computer or printing out details of the transaction, including the product description (written and photograph), the seller's identification, every bid made, all emails between you and the seller and every receipt/record provided.

Consider using insurance offered by the auctioneer or another organisation to protect yourself if something goes wrong.

If something goes wrong

A. Post feedback about the seller on the auction website

Many auction websites have feedback services allowing you to post a comment or ranking about the party who sold you something. This allows subsequent users to be warned about the seller, but will not provide you with any refund or exchange.
B. Make a claim to the auctioneer

Some internet auction sites offer free insurance up to a specified amount. Check the terms and conditions of the insurance policy on the auctioneer's website to see if you can make a claim. You will probably need to make a "charge-back" application with your payment card provider (see below). When making a bid at an internet auction) before you can make a claim with the auctioneer.
C. Make a complaint against the auction website

Although you did not purchase something from the auctioneer, they might have breached your rights as a consumer; for example, if the auctioneer misled or deceived you by making misrepresentations about the auction site's safety regarding fraud.

Purchasing from Overseas

Overseas purchases and consumer protection laws

When you buy goods or services over the internet from an overseas trader, it can be uncertain whether Australian consumer protection laws apply or whether an Australian court has any jurisdiction. The Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law apply to overseas traders carrying on business in Australia, but it is not clear whether this includes sales made over the internet by overseas traders.

If an internet overseas trader is found to have been carrying on business in Australia, then Australian consumer protection laws will apply, even if the contract states otherwise, for example "This contract is governed by the laws of California". If there is no Australian consumer protection (that is, the trader is found not to have been carrying on business in Australia), then only the consumer protection laws of the trader's country (if any) will apply. This may result in your rights being less than if you had purchased the good or service within Australia.

Even if Australian consumer protection laws apply and an Australian court has jurisdiction over an overseas trader, it may be too difficult or too expensive to enforce a judgment against a trader who has no assets in Australia.

Australian Customs Service and GST

When overseas traders supply physical goods to consumers, the Australian Customs Service (ACS) checks the goods in order to decide whether they should be cleared for entry. Imported goods that are prohibited or restricted are seized, and others may require a permit. Imported goods may also be subject to customs duty. The ACS classification of the good, and the country of origin, are relevant in determining the rate of duty payable by the importer (the consumer).

In addition, the ACS levies GST on imports. Low value thresholds apply (A$100). The method of ordering (electronic, phone or mail) does not affect whether GST is payable.

Further tips when purchasing from overseas

Find out from the ACS whether you can legally import the good you wish to buy, and whether it is subject to GST or any other taxes.

Goods bought from overseas can have significant delivery expenses, so always check the delivery charges carefully.

Overseas traders may not list the purchase price in Australian dollars, so you should do the conversion.

Always check the overseas trader's website for any terms and conditions that state which country's laws apply, and which country's courts would be relevant to your bringing an action in case of dispute. It is common practice for an overseas trader to designate the law and courts as being in the country in which the business is located. However, as noted earlier, there is some legal uncertainty in this area.

Internet Scams

Unfortunately, the internet is subject to fraud just like the offline world. Given the nature of the internet, which allows for cross-border transactions to take place, it may be difficult to seek redress if you suffer an online fraud. When shopping online, you should therefore be more aware of scams than when shopping offline.

Your Options when Things Go Wrong

Contact the trader

Contact the trader (in internet auction purchases, the seller) to try to resolve the dispute, via telephone, fax, post or email. Explain the problem and what you want (for example, refund and return). Keep records of all your communications with the trader. It is recommended that you write a letter so that there is a record of your complaint, which can be used if further action is taken. For help in writing a complaint letter, see "Making a Complaint" at www.accc.gov.au/content/index.phtml/itemId/815215.

Contact your payment card provider

If you purchased the good or service with a payment card (for example, credit card, debit card, stored value card), there may be protections for you. For example, some credit cards have a "charge-back" facility (see When making a bid at an internet auction).

Contact an industry body or professional association

Many traders are members of an industry body or association that follows a code of conduct. If the trader at issue is a member, that organisation may be able to help resolve your dispute. Details of Australian industry bodies and professional associations are in the Australian Competition and Consumer Commission's Consumer and Business Directory, available at www.accc.gov.au/content/index.phtml/itemId/8627.

If the trader is based overseas, the relevant consumer protection agency of that country may be able to advise you whether the trader belongs to an appropriate organisation.

Seek help from a consumer protection agency

If the problem is not resolved, contact the Consumer Affairs/Fair Trading agency for the state or territory where the trader is located (see Contacts, Links, Resources and References). If you are in a different state or territory from the trader, you can also contact the Australian Competition and Consumer Commission (ACCC). The ACCC may also be able to help you if the trader is overseas. When dealing with overseas traders you can also visit www.econsumer.gov, a joint project of consumer protection agencies from around the world that provides information for international consumers and facilitates cross-border complaints.

If your dispute has not been resolved, you may want to take your matter to the relevant court or tribunal. However, legal action can be costly and may only be worth pursuing if the dispute concerns a significant sum of money. Legal action against an overseas trader is significantly more expensive than against a local trader, and may be very difficult to enforce. Whether you should proceed with legal action depends on the circumstances of your case. Before you do so you should obtain legal advice.

Complaints and Alternative Dispute Resolution Schemes

An alternative to the traditional court/tribunal system is to utilise private dispute resolution schemes. The particular industry you are dealing with might operate such a scheme, for example:
  • ACAT Energy and Water ( http://www.acat.act.gov.au) (and equivalent bodies interstate such as the Energy and Water Industry Ombudsman of NSW) investigates and facilitates the resolution of complaints and disputes by consumers against electricity, gas and water providers;
  • the Financial Ombudsman Service (FOS) investigates and facilitates the resolution of complaints and disputes by consumers against financial service providers, including banks and their affiliates, providers of life insurance, superannuation, funds management, financial advice, stockbroking, investment advice and the sale of financial or investment products. FOS operates in five Divisions: Banking & Finance; General Insurance; Insurance Broking; Mutuals; and Investments, Life Insurance & Superannuation, reflecting the business areas of three schemes which merged to form FOS. A complete list of organisations covered by the Financial Ombudsman Scheme is at www.fos.org.au. Jurisdictional limits apply within FOS -- banking claims are limited to $280,000; life insurance claims are limited to $280,000; income protection insurance claims are limited to $6,000 per month and claims involving funds management, stockbroking, investment and financial advice are limited to $150,000;
  • the Telecommunications Industry Ombudsman (TIO) investigates and facilitates the resolution of complaints and disputes by consumers against telecommunications service providers, including landline, mobile phone and internet services. The TIO will not investigate complaints that are more than 12 months old (except in special circumstances) or where legal proceedings have commenced;
  • the Superannuation Complaints Tribunal (SCT) investigates and facilitates the resolution of complaints and disputes by consumers in relation to superannuation funds, annuities and deferred annuities and Retirement Saving Accounts (see: Chapter 68 Superannuation). The SCT will initially assist consumers to reach an agreed settlement through conciliation. If the complaint cannot be conciliated the SCT will consider submissions and make a determination. A determination of the SCT is binding on both parties. It is, however, possible to appeal a determination to the Federal Court; and
All of these schemes are independent and free-of-charge, and are less formal and generally speedier than tribunals and courts. When resolving a dispute the schemes are required to take account of law, good industry practice and what is fair and reasonable in all the circumstances.

As a result of the introduction of the Financial Services Reform Act 2001 (Cth), which amended the Corporations Act 2001 (Cth), all financial services providers must belong to an external dispute resolution scheme that has been approved by the Australian Securities and Investments Commission (ASIC) (ss 912A(2)(b) and 1017G(2)(b) of the Corporations Act 2001 (Cth)). The FOS (which incorporated the previous BFSO, IOS and IBD on 1 July 2008) and FICS have been approved by ASIC. For guidance on how ASIC determines whether to approve an external dispute resolution scheme, see its Policy Statement 139 on the ASIC website at www.asic.gov.au.

For details on how to access these schemes, and other industry specific schemes, see Contacts, Links, Resources and References.

There are many agencies operated by both the Commonwealth and ACT governments responsible for the receipt and resolution of complaints, as well as private, independent industry-based dispute resolution schemes.

Most of these are referred to in the relevant subject chapters of the Law Handbook. Readers are referred to the chapter dealing with their specific area of complaint as well as to the list given here.

The following list deals mainly with areas that are not dealt with in any detail elsewhere in the Law Handbook. Where appropriate, addresses to useful Internet sites have been provided.

General Complaints

ACT Office of Fair Trading (part of the Office of Regulatory Services) www.ors.act.gov.au/community/fair_trading

Australian Competition and Consumer Commission www.accc.gov.au. See in particular: Australian Prudential Regulation Authority (APRA) www.apra.gov.au

Australian Securities and Investments Commission Canberra Connect www.canberraconnect.act.gov.au

International E-Consumer Project www.econsumer.gov

Complaintline www.complaintline.com.au

Complaints and Alternative Dispute Resolution Schemes

Financial Ombudsman Service 1300 78 08 08 www.fos.org.au. This service incorporates the former Banking and Financial Services Ombudsman, Credit Union Dispute Resolution Centre, Financial Industry Complaints Service, Insurance Brokers Disputes Limited, and Insurance Ombudsman Service (itself formerly Insurance Enquiries and Complaints Limited).

Credit Ombudsman Service www.creditombudsman.com.au

Superannuation Complaints Tribunal www.sct.gov.au

Telecommunications Industry Ombudsman (TIO) www.tio.com.au Complaint line 1800 062 058

Fair Trading Offices in other States and Territories

Australian Consumer Law homepage www.consumerlaw.gov.au

Consumer Affairs Tasmania www.consumer.tas.gov.au

Consumer Affairs Victoria www.consumer.vic.gov.au

NSW Office of Fair Trading www.fairtrading.nsw.gov.au

New Zealand Ministry of Consumer Affairs www.consumeraffairs.govt.nz

NT Office of Consumer Affairs and Fair Trading www.nt.gov.au/justice/consaffairs

QLD Office of Fair Trading www.fairtrading.qld.gov.au

SA Office of Consumer and Business Affairs www.ocba.sa.gov.au

WA Department of Consumer and Employment Protection www.docep.wa.gov.au/ConsumerProtection

Useful Documents

Electronic Funds Transfer (EFT) Code of Conduct www.asic.gov.au/fido/fido.nsf/byheadline/Electronic+Funds+Transfer+(EFT)+Code+of+Conduct?opendocument

Other Contacts

AUSIndustry www.ausindustry.gov.au

CITEC Confirm www.confirm.citec.com.au

Licence Recognition www.licencerecognition.gov.au

References

Seddon NC and Ellinghaus MP, Cheshire & Fifoot's Law of Contract (9th Aus ed 2008)

Seddon, N, Government Contracts: Federal, State and Local (4th ed 2009)