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Negligence

Discuss About The Consumer Affairs Victoria Damages Compensation?

In Australian, liability related to the product is recognized by both common law and legislation. Any person who suffer damage, injury or loss then such person has right to initiate legal proceedings on following grounds:

  • Under tort of negligence if duty of care breached.
  • Under Australian consumer law, if any provision of ACL breached.

In this report, terms related to product liability is discussed in the form of 3 questions which are answered below. Subsequently report is concluded with brief conclusion.

Usually, manufacturer of the product owns duty of care towards the ultimate consumer of the product for the purpose of protecting the consumer against any risk or injury which is foreseeable in nature. It is not allowed to retailers and importers to test the reliability of the product if it is supplied by the manufacturer in the container which is sealed pack. These sealed pack containers are directly opened by the ultimate consumers. However, it must be noted that if product cause damage or injury to the person then retailer also under obligation to safeguard the person from such risk and injury which is foreseeable in nature. If any party make in the supply chain make any modification in the product then such party is also liable towards the consumer in lieu of those changes.

It must be noted there is no restriction on parties to enter into contract on the terms which are agreed between the parties, but there are some implied terms also which are imposed by Common law and statute. It must be noted only parties to the contract has right to seek remedies under the contract. In number of cases contracting parties are retailer and consumer, therefore retailer is liable towards the consumer if any implied condition or warranty is breached. However, retailer also enter into contract with manufacturer which means retailer has right to seek remedy from manufacturer. ACL introduced various statutory guarantees which can be considered as implied conditions and warranties under the contract. These guarantees exist in every contract which is entered between the consumer and retailer (Clayton UTZ, 2015).

Following are some statutory guarantees introduced by the ACL under chapter 2 and 3, and under these guarantees manufacturer are directly liable towards the consumer:

  • If goods are of unacceptable quality.
  • Goods are not fit for the stated purpose.
  • Goods do not match with their description.
  • Manufacturer does not compile with existing warranties (ACCC, n.d.).

This can be understood through case law Donoghue v Stevenson [1932] A.C. 562, [1932] UKHL 100. In this case, Mrs. Donoghue claims against the manufacturer off ginger beer under tort of negligence for breaching their duty of care. In this Court stated that manufacturer is liable towards the ultimate consumer because it is the consumer who ultimately consumes the product.

In the present case, manufacturer of the product is liable towards Mr. George for failing to meet the statutory guarantees stated under ACL. Manufacturer fails to provide the product which meets the description and also product supplied by manufacturer fails to fit for stated purpose. Therefore, in this case manufacturer is liable towards the George.

Chapter 2 and 3 of ACL sates the guarantee provided to consumer by common law and statute. If any person buy product under ACL then such person automatically get the protection under consumer statutory guarantee. Following are some statutory guarantees provided by ACL:

Contract

Section 59 of Competition and Consumer Act 2010 states that manufacturer and supplier of product and services are under obligation to meet any express warranty stated by manufacturer at the time of formation of contract. In other words, if manufacturer at the time of formation of contract made any promise related to the quality, standard, condition, and performance of contract then it is necessary that manufacturer fulfill such promises. These promises are considered as express warranty of the contract. This can be understood through case law Norman Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCATA 047. In this case, Tribunal stated that money back guarantee provided by seller is considered as express warranty (Competition and Consumer Act 2010).

Section 60 of the ACL states that it is the duty of manufacturer and supplier to perform their functions and render their services with due care skill. In other words, manufacturers are obliged to ensure reasonable care and skill while manufacturing any product and perform the services (Competition and Consumer Act 2010).

Section 61 of competition and Consumer Act 2010 states that it is the duty of manufacturer and supplier to ensure that goods delivered by them and services rendered by them fit for the purpose stated. In other words, if consumer stated any particular purpose at the time of formation of contract then manufacturer and supplier is under obligation to ensure that goods must meet that particular purpose or desired result of the consumer (Competition and Consumer Act 2010).

This can be understood through case law Campbell v Lane (No 2), [2013] QCATA 307. In this case Court stated that horse was so lame that it was not fit for disclosed purpose.

If any manufacturer and supplier breach above stated liability, then following rights are available to consumer:

  • Consumer can terminate the contract on the ground of breach of statutory guarantee.
  • Consumer can ask for refund for any services not consumed by consumer.
  • Consumer can claim for compensation for the difference occurred in desired result and actual result.

In the present case, Newman and manufacturer breach number of statutory guarantee available to George under ACL.

Newman breach guarantee under section 59, 60, and 61 as he fails to meet the express warranties at the time of formation of contract. He further fails to perform his duties with due care and skill. Therefore, Newman is liable towards George under ACL.

George has right to seek compensation under ACL or terminate the contract.

However, Newman also failed to provide goods which fit for disclosed purpose. Therefore, both manufacturer and Newman are liable under section 61 of ACL. George can also seek for compensation under this section also.

As stated above, consumer has right to recover damages from manufacturer for breaching the consumer guarantees stated under Australian Consumer law. However, manufacturer is liable in following circumstances towards the consumer:

  • If goods does not fit for stated purpose.
  • Breach of express warranty.
  • Goods or services fail to match description.
  • Repair and spare parts.

Therefore, it is necessary for manufacturer to honor the rights of the consumer under consumer guarantee.

If any manufacturer and supplier breach above stated liability, then following rights are available to consumer:

  • Consumer can terminate the contract on the ground of breach of statutory guarantee.
  • Consumer can ask for refund for any services not consumed by consumer.
  • Consumer can claim for compensation for the difference occurred in desired result and actual result.

Manufacturer is liable to pay compensation, and amount of compensation is determined through analyzing the amount of goods and services and loss or injury suffered by consumer. Amount of compensation must be equal to the value of product or less than the difference between current value of product and it can be the lowest of either:

  • Retail price of the goods at the time of purchase.
  • Actual price paid by consumer.

If manufacturer does not meet with the express warranty and fail to meet the express warranty within reasonable time period then consumer has right to take legal action against the manufacturer for the purpose of enforcing the warranty in Court or Tribunal. Consumer also has right to enforce their rights under consumer guarantee and claim for compensation for consequential loss because of manufacturer’s failure to meet the warranty.

In the present case, George can ask for money refund that is $550 under the express guarantee because consumer has right to enforce their rights under consumer guarantee and George can also claim for compensation because manufacturer fail to meet its liability (Consumer affairs Victoria, n.d.).

Conclusion:

After considering above facts, it is clear that ACL protect the rights of consumer and ensures fair dealings in Australia. In this report various statutory guarantees are stated such as guarantee related to acceptable quality, express warranty, etc. Lastly, it is concluded that ACL provides various rights to the consumer.

References:

ACCC. Consumer guarantees. Retrieved on 23rd September 2017 from: https://www.accc.gov.au/consumers/consumer-rights-guarantees/consumer-guarantees.

ACL. Consumer Guarantees. Retrieved on 23rd September 2017 from: https://consumerlaw-staging.tspace.gov.au/files/2016/05/0553FT_ACL-guides_Guarantees_web.pdf.

Campbell v Lane (No 2), [2013] QCATA 307.

Clayton UTZ, (2015). Product Liability 2015. Retrieved on 23rd September 2017 from: https://www.claytonutz.com/articledocuments/178/ICLG-Product-Liability-Australia-2015.pdf.aspx?Embed=Y.

Competition and Consumer Act 2010- Schedule 2- Section 59.

Competition and Consumer Act 2010- Schedule 2- Section 60.

Competition and Consumer Act 2010- Schedule 2- Section 61.

Consumer Affairs Victoria. Damages and compensation. Retrieved on 23rd September 2017 from: https://www.consumer.vic.gov.au/products-and-services/refunds-repairs-and-returns/damages-and-compensation.

Donoghue v Stevenson [1932] A.C. 562, [1932] UKHL 100.

Norman Enterprises Pty Ltd t/as Leimo Australia v Deng [2013] QCA
Cite This Work

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