Issue: The issue in this case is related with the impact of exclusion clause mentioned on the sign placed at the gate of EnviroPro Pty Ltd, which excludes the liability of the company for any damages.
Rule: Apart from the general rules of business law, in the present case, sale of goods Act (Vic) also applies. It makes the remission that the provisions of this legislation apply only in case of the contracts related with the sale of goods. This Act provides that a difference exists between consumer and on consumer transactions (Carpet Call Pty Ltd v Chan, 1987). The Act also provides that the terms that can be implied under Trade Practices Act also apply in case of consumer contracts concluded in Victoria.
The law defines a consumer contact as a contract related with the sale of goods for less than $20,000 or when it deals with the goods that are generally acquired over domestic purposes and when these goods are not going to be used for sale or inputs in the process of manufacture (Crawford v Mayne Nickless Ltd., 1992). Therefore, as mentioned above, there are certain conditions that can be implied in case of these contracts. One of the implied conditions. In such cases is the condition according to which the goods should match the description, when the goods have been sold by description. Terms can be implied in case of a contract dealing with the sale of goods expressly or impliedly when the purpose behind the purchase of goods, has been revealed by the purchaser to the seller (Jillawarra Grazing Co v John Shearer Ltd., 1984). Similarly, the implied conditions are also applicable when the circumstances are of the nature that it can be assumed that the seller should have been aware of the fact that the buyer is relying on skill of the seller to make the purchase. According to section 20 of this legislation, and implied condition is present, which requires that the goods should be fit for purpose under the above-mentioned circumstances.
Application: in the present case, a large sign has been placed at the entrance of Enviro Pty Ltd. This sign mentions an exclusion clause according to which the company will not be liable for any damages suffered by the consumers except to replace the goods, that too in cases where the goods were shown as being faulty at the time of sale. In the present case, when Charlie went to purchase equably, he had toured the salesperson of Enviro Pty Ltd that he was going to use the product for reclaiming marketing water. The salesperson also gave an assurance that you are that the water will be fit for this purpose. On the other hand, in reality, the water produced by this product was not fit for drinking purposes. Therefore, when Charlie consumed this water for some time, he became ill. As a result, he was forced to miss work, and he also started to suffer from irritable bowl syndrome. As a result is quality of life was also affected adversely. Under these circumstances, it is clear in this case that Enviro Pty Ltd. had breached the terms of the contract, particularly the requirement according to which the goods should be fit for purpose.
Rule: The Australian Consumer Law is a part of Competition and Consumer Act, 2010. This legislation has imposed an obligation on the manufactures according to which they should take the consumers fairly. In case of a breach of the statutory guarantees provided by the ACL, the law provides that such manufacturer owes a liability for the strict liability offense (Haros v Linfox Australia Pty Ltd., 2012). The strict liability that has been imposed on the manufacturers by the ACL provides that a particular manufacturer can be held liable for breach even if there is no negligence of the manufacturer (Keays v J P Morgan Administrative Services Australia Ltd., 2011). The statutory guarantees mentioned in the ACL, and the body of strict liability offense so that it can be ensured that the manufacturers should fulfill the expectations of consumers.
The strict liability provisions mentioned in the ACL are applicable in case of the manufactures were supplying goods in trade or commerce. The ACL provides that in such cases, a company can be considered as the manufacture of goods if it has imported goods or resemble the goods or the brand name of the company has been used to be promoted as the manufacturer. In the same way, the law provides that it can be said that the goods contain a safety defect if it is found that the level of safety is not the same that can be generally expected from such goods. Although the level of safety may vary in each case, however, the ultimate decision has to be made by the court to see if a safety defect is present or not.
Application: by applying the legal rules mentioned above, it has been provided by the strict liability provisions of the ACL that these provisions maybe breached even if the manufacturer was not negligent. Interview of disposition of law, in the present case also, Clean Aqua Pty Ltd. can be held liable for breach of strict liability provisions.
In this case, Charlie wanted a product that can be used for producing drinking water. But the reality was that Clean Aqua produced the water that could be used for gardening or swimming pools etc. The water was not fit for human consumption. On these grounds, it can be held that Clean Aqua is liable for the breach of a statutory guarantee mentioned in the ACL.
Conclusion: Charlie can bring a case against Clean Aqua Pty Ltd for the violation of strict liability provisions that are imposed by the Australian Consumer Law on the manufacturers.
Carpet Call Pty Ltd v Chan (1987) ASC 55-553
Crawford v Mayne Nickless Ltd (1992) ASC Business-law.
Jillawarra Grazing Co v John Shearer Ltd (1984) ASC 55-307
Haros v Linfox Australia Pty Ltd (2012) 287 ALR 507
Keays v J P Morgan Administrative Services Australia Limited  FCA 358