Consumer rights Reforming statutory implied conditions and warranties
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- Colin Neave Chairman, Commonwealth Consumer Affairs Advisory Council Table of contents Glossary 6 Findings 7
- 1 Consumers in a changing marketplace 13
- Part II — Problems with current arrangements 36 5 Clarity in legislation 37
- 7 Difficulty in enforcement 63
- 10 The online environment 92
- 12 Conclusion 112 References 114 Appendices 119
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Consumer rights Reforming statutory implied conditions and warranties Final report October 2009 Commonwealth of Australia 2009 ISBN 978 0 642 74534 7 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and enquiries concerning reproduction and rights should be addressed to the: Commonwealth Copyright Administration Attorney General’s Department 3 5 National Circuit BARTON ACT 2600 Or posted at: http://www.ag.gov.au/cca 30 October 2009 The Hon Dr Craig Emerson MP Minister for Competition Policy and Consumer Affairs Parliament House CANBERRA ACT 2600 Dear Minister On 12 March 2009 the former Minister for Competition Policy and Consumer Affairs, the Hon Chris Bowen MP, requested that the Commonwealth Consumer Affairs Advisory Council (CCAAC) undertake a review of statutory implied conditions and warranties as part of the broader Australian Consumer Law reforms. As part of this process, CCAAC has examined the existing laws on implied conditions and warranties in the Trade Practices Act 1974 and state and territory fair trading and sale of goods laws. The findings of the report have been drawn from extensive consultation and research undertaken by CCAAC. CCAAC commissioned research from Sparke Helmore to inform the review, and this work, combined with a study undertaken by the National Education and Information Advisory Taskforce, has provided further information and assistance to the review process. Additionally, CCAAC acknowledges the considerable contribution that Consumer Affairs Victoria has made to research in this field. Clarity and awareness of the law, combined with clear and effective methods for redress, are fundamental attributes in the law, and have been identified as being imperative in addressing the issues faced by consumers, retailers and manufacturers. Information about the type of warranties and remedies available to consumers when they experience product failure is crucial in promoting wellbeing and empowering consumers in today’s environment. This report considers how these issues can be addressed to protect and enhance the wellbeing of consumers now and into the future. I offer my thanks to and acknowledge the expertise and commitment of the CCAAC Subgroup in compiling this report. The Subgroup was led by Professor Stephen Corones and assisted by Ms Deborah Healey, Mr Ray Steinwall and Ms Carolyn Bond, along with contributions from our other colleagues. I also thank those who provided submissions to CCAAC. I am pleased to enclose a copy of CCAAC’s final report. Yours sincerely 
Colin Neave Chairman, Commonwealth Consumer Affairs Advisory Council Table of contents Glossary 6 Findings 7 Reforming the law (Chapter 5) 7 Enhancing awareness (Chapter 6) 9 Enforcement and dispute resolution (Chapter 7) 9 Extended warranties (Chapter 8) 11 Dealing with motor vehicle issues (Chapter 9) 11 Online sales (Chapter 10) 12 Liability limitations (Chapter 11) 12 Auctions (Chapter 11) 12
Context of the review 13 Purpose 13 The current environment 14 Types of warranties 14 Challenges and catalysts for change 15 Structure of the report 18
Application of Divisions 2 and 2A 20 Existing implied terms and statutory rights 22
Implied terms 27 Manufacturers’ liability 30 Application 30 Excludability 32 Remedies 33 Part II — Problems with current arrangements 36 5 Clarity in legislation 37 Problem of lack of clarity in legislation 37 Clarity in terms 39 Clarity in scope 47 Clarity in remedies 50
The problem of lack of awareness 57 Support for consumers 58 Consumer detriment 59 Alternative options for addressing the problem 60
Existing remedies for implied terms 63 Alternative remedies 64 Barriers to enforcement 65 Alternative enforcement mechanisms 65 Access to remedies 70 Part III — Other issues 74 8 Extended warranties and consumer choice 75 Nature of extended warranties 75 Existing Commonwealth legislation 76 Consumers and extended warranties 77 Overseas models 79 The changing consumer environment 81 9 Lemon laws 84 Identifying lemons 84 Motor vehicle lemon laws 87 Adequacy of the generic law 88 A lemon law for Australia? 90
Online sales 92 Existing regulation 93 Purchasing online 94 Overseas models 95 Online auctions 98 Online consumer protection 99
Limitation for recreational services 101 Optional limitation of liability 106 Specific industries 107 Auctions 108
Context 120 Background 120 Scope of study 121 Key considerations 121
New Zealand 138 United Kingdom 142 European Union 144 United States 146 Canada 147 South Africa 149
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