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Legals
Guarantees relating
In addition, if it was reasonably foreseeable at the time of purchasing the goods that the consumer would suffer a loss, the consumer can claim damages for the failure to provide goods of acceptable quality.
The principles discussed
above were recently applied in
a case against a well-known car manufacturer. In that case, three models from its range of cars that were supplied over a four-and-a- half-year period suffered from a major defect. Despite the defect, the cars were still safe to drive. However, the defect affected
the value of the cars and
resulted in additional expenses in driving the cars.
In a lengthy decision, the Court found that the defect resulted in a 17.5 per cent reduction in value in the cars sold. The manufacturer sold approximately 264,000 affected cars, resulting in a claim against it of approximately $1.8bn plus interest.
If you are a manufacturer or supplier of goods you need to ensure that the goods you supply are acceptable in quality. If a claim is made that goods you have supplied suffer from a minor defect, you can either:
a) repairthegoods;
b) replace the goods; or
c) refund the amount paid for the
goods.
It is also important that you do
not make any statements about the quality of the goods you supply that may be misleading or deceptive.
If you are a consumer, who has a complaint about the quality of goods you have purchased, you need to
get advice on whether the defect is
a major or minor defect, and what remedies you may have. 21
to the supply of goods
Print21’s resident legal eagle Wal Abramowicz outlines the legislation regarding the supply of goods and services that may be defective.
The following scene plays out multiple times every day – a person walks into a shop to buy something. Sometimes a discount in
the price can be negotiated. The item is paid for and the person leaves the shop. Excited about their new item, they do not think that there might be something wrong with it. However,
if they had known of the defect, they may have paid less for the item or not bought it at all.
Goods that are supplied to a consumer, in trade or commerce, come with a guarantee that the goods will be of acceptable quality. The guarantee does not apply if the goods were supplied by way of auction.
Goods are of acceptable quality
if a reasonable consumer, who is fully acquainted with the state and condition of the goods, would regard them as:
a) fit for all the purposes for which
the goods are commonly supplied;
b) acceptable in appearance and
finish;
c) free from defects;
d) safe; and
e) durable.
If a dispute as to whether goods
are of acceptable quality arises,
the Court will consider things such as the nature of the goods, the
price paid, any statements made
on the packaging or label, and any representations made by the supplier or manufacturer.
“Goods that are supplied to a consumer, in trade or commerce, come with a guarantee that the goods will be of acceptable quality. The guarantee does not apply if the goods were supplied by way of auction.”
The Australian Consumer Law provides a remedy to a consumer who has acquired goods that are not of acceptable quality. If the defect is not a major defect and can be fixed, the consumer can ask the supplier to fix the defect within a reasonable time.
However, if the defect is a major failure, the consumer can reject the goods and receive a refund, or the consumer can claim payment of the reduction in value. The test is an objective test – what would a reasonable hypothetical consumer pay for the goods? The time to determine the value is at the time the goods were supplied.
Safeguards: Wal Abramowicz
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