Consumer rights Reforming statutory implied conditions and warranties

Manufacturers’ liability

The TPA provides for certain statutory causes of action for a consumer against a manufacturer (or importer) of goods. Unlike the implied terms, these causes of action arise independently of any contract between the consumer and the manufacturer (and, in fact, do not apply where there is a contract). The relevant causes of action allow the consumer to bring a claim against the manufacturer of the goods where the consumer has suffered loss or damage in respect of:

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  unsuitable goods (section 74B);
  
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  false descriptions (section 74C);
  
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  goods of unmerchantable quality (section 74D);
  
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  goods which do not correspond with samples (section 74E);
  
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  failure to provide facilities for repairs or parts (section 74F); and
  
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  non compliance with an express warranty (section 74G).
  

Only NSW and the NT have enacted similar provisions to the TPA in their FTAs and the only difference is that the provisions in the FTAs have wider application as they apply to persons as well as corporations in trade or commerce. In SA, non excludable manufacturer warranties are provided for in the Manufacturers’ Warranties Act 1974 (SA).

Application

As previously mentioned, there are differences in the application of the statutory implied terms between each jurisdiction. First, the TPA applies to corporations while state and territory laws apply to ‘persons’, including both individuals and corporations. Second, the SGAs apply to all contracts for the sale of goods but the application of other consumer legislation is different between the jurisdictions and will depend on the nature of the goods or services supplied or the monetary value of those goods or services.

The following is a brief overview of the application of the implied terms provisions to goods and services:

Commonwealth (TPA section 4B)

Under $40,000 — the goods or services can be of any kind (that is, ordinarily of a domestic, household, personal or business nature).

Over $40,000 — the goods or services must be of a kind ordinarily acquired for personal, domestic or household use or consumption (unless it is a commercial road vehicle).

The TPA does not apply to goods which were acquired for 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.

New South Wales (FTA sections 5 and 40L)

No value limit, but the goods or services must be of a kind ordinarily acquired for personal, domestic or household use or consumption.

The FTA does not apply to goods or services which were acquired for re supply or, in the case of goods, in the course of a business other than a farming undertaking, for the purpose of consuming or transforming them by a process of manufacture or production, or using them for repair or treatment of other goods or fixtures on land.

Victoria (FTA sections 32D and 32DA)

Under $40,000 — the goods or services can be of any kind.

Over $40,000 — the goods or services must be of a kind ordinarily acquired for personal, domestic or household use or consumption.

The FTA does not apply to goods (or services) which were acquired for re supply, or to raw materials or goods that are ordinarily acquired for the purposes of repairing or treating other goods or fixtures on land or being incorporated in other goods where they are purchased for the purpose of transforming them or incorporating them in other goods, in trade or commerce, in the course of a process of production or manufacture or repairing or treating other goods or fixtures on land.

Western Australia (FTA section 6)

Under $40,000 — the goods or services can be of any kind.

Over $40,000 — the goods or services must be of a kind ordinarily acquired for personal, domestic or household use or consumption (unless it is a commercial road vehicle).

The FTA does not apply to goods which were acquired for 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.

South Australia (CTA³⁸ section 2)

Under the CTA, the goods or services can be of any kind but must not cost more than $40,000.

The CTA, however, does not include sale by auction, sale to a person who trades in goods of that description, interests in land or other contracts declared by regulation. The definition of ‘consumer’ in the CTA does not include bodies corporate. The definition of ‘services’ is limited to the services listed in the CTA and regulations.

Northern Territory (CAFTA³⁹ section 5)

The legislation contains no value limit, but excludes those goods acquired for the purpose of re supply or for the purpose of using them up or transforming them, in the course of a business, in or in connection with a process of manufacture or production or with the repair or treatment of other goods or of fixtures on land.

However, implied terms in respect of goods and services of a kind ordinarily acquired for personal, domestic or household use or consumption can not be excluded, restricted or modified.

Queensland (SGA), Tasmania (SGA), Australian Capital Territory (SGA)

There is no value limit or limit on the type of goods to which the implied terms apply.

The SGAs apply to all contracts for the sale of goods by a seller to a buyer (a person who buys or agrees to buy goods).

The SGAs do not apply to supply of services.

Excludability

All jurisdictions make provision for implied terms in contracts for the sale of goods in SGAs. These terms can be effectively modified or excluded by the supplier only in some jurisdictions.

Only NSW, Victoria, WA, SA and the NT have introduced explicitly non excludable warranties in their respective FTAs.

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  Under the TPA and in WA, Victoria and the NT, liability may be limited in respect of goods or services which are not of a kind ordinarily acquired for personal domestic or household use or consumption but not otherwise.
  
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    Liability will not be limited if the consumer establishes that the limitation was not fair or reasonable (TPA, WA and NT) or unconscionable (Victoria).
    
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  In NSW, liability can not be limited but as the implied terms only apply in respect of goods or services which are not of a kind ordinarily acquired for personal domestic or household use or consumption, there is no practical difference with the TPA.
  
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  Under the TPA and in NSW and Victoria, liability in relation to recreation services can be excluded, restricted or modified provided it is limited to liability for death or personal injury.⁴⁰
  

The ACT and Tasmania do not cover warranties and refunds in their FTAs. The ACT is covered by the TPA. In Tasmania, the SGA allows contracts to vary the statutory warranties relating to clear title.

In Queensland, the same provisions exist in the SGA as in Tasmania, but the FTA prohibits manufacturers’ voluntary warranties from overriding statutory warranties.