Competition and Consumer Act 2010

I. Consumer Guarantees

Chapter 1—Introduction

Section 3 Meaning of consumer - Acquiring goods as a consumer

(1) A person is taken to have acquired particular goods as a consumer if, and only if:
(a) the amount paid or payable for the goods did not exceed:
(i) $40,000; or
(b) the goods were of a kind ordinarily acquired for personal, domestic or
household use or consumption; or
(c) the goods consisted of a vehicle or trailer acquired for use principally in the
transport of goods on public roads.
(2) However, subsection (1) does not apply if the person acquired the goods, or held
himself or herself out as acquiring the goods:
(a) for the purpose of re supply; or
(b) for the purpose of using them up or transforming them, in trade or commerce:
(i) in the course of a process of production or manufacture; or
(ii) in the course of repairing or treating other goods or fixtures on land

Chapter 3 Specific protections

Part 3-2 – Consumer transactions
Division 1 – Consumer guarantees
Subdivision A--Guarantees relating to the supply of goods

Section 54 Guarantee as to acceptable quality

(1) If:
(a) a person supplies, in trade or commerce, goods to a consumer; and
(b) the supply does not occur by way of sale by auction;
there is a guarantee that the goods are of acceptable quality.
(2) Goods are of acceptable quality if they are as:
(a) fit for all the purposes for which goods of that kind are commonly supplied;
and
(b) acceptable in appearance and finish; and
(c) free from defects; and
(d) safe; and
(e) durable;
as a reasonable consumer fully acquainted with the state and condition of the goods (including
any hidden defects of the goods), would regard as acceptable having regard to the matters in
subsection (3).
(3) The matters for the purposes of subsection (2) are:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and
(c) any statements made about the goods on any packaging or label on the
goods; and
(d) any representation made about the goods by the supplier or manufacturer of
the goods; and
(e) any other relevant circumstances relating to the supply of the goods.
(6) Goods do not fail to be of acceptable quality if:
(a) the consumer to whom they are supplied causes them to become of
unacceptable quality, or fails to take reasonable steps to prevent them from
becoming of unacceptable quality; and
(b) they are damaged by abnormal use.

55 Guarantee as to fitness for any disclosed purpose etc.

(1) If:
(a) a person (the supplier ) supplies, in trade or commerce, goods to
a consumer; and
(b) the supply does not occur by way of sale by auction;
there is a guarantee that the goods are reasonably fit for any disclosed purpose, and for any
purpose for which the supplier represents that they are reasonably fit.
(2) A disclosed purpose is a particular purpose (whether or not that purpose is a
purpose for which the goods are commonly supplied) for which the goods are
being acquired by the consumer and that:
(a) the consumer makes known, expressly or by implication, to:
(i) the supplier; or
(ii) a person by whom any prior negotiations or arrangements in relation to
the acquisition of the goods were conducted or made; or
(b) the consumer makes known to the manufacturer of the goods either directly
or through the supplier or the person referred to in paragraph (a)(ii).
(3) This section does not apply if the circumstances show that the consumer did not
rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the
supplier, the person referred to in subsection (2)(a)(ii) or the manufacturer, as the case may
be.
Subdivision C -- Guarantees not to be excluded etc. by contract

Section 64 Guarantees not to be excluded etc. by contract

(1) A term of a contract (including a term that is not set out in the contract but is
incorporated in the contract by another term of the contract) is void to the extent that
the term purports to exclude, restrict or modify, or has the effect of excluding,
restricting or modifying:
(a) the application of all or any of the provisions of this Division; or
(b) the exercise of a right conferred by such a provision; or
(c) any liability of a person for a failure to comply with a guarantee that applies
under this Division to a supply of goods or services.

64A Limitation of liability for failures to comply with guarantees

(1) A term of a contract for the supply by a person of goods other than goods of a kind
ordinarily acquired for personal, domestic or household use or consumption is not void
under section 64 merely because the term limits the person's liability for failure to
comply with a guarantee (other than a guarantee under section 51, 52 or 53) to one or
more of the following:
(a) the replacement of the goods or the supply of equivalent goods;
(b) the repair of the goods;
(c) the payment of the cost of replacing the goods or of acquiring equivalent goods;
(d) the payment of the cost of having the goods repaired.

Chapter 5—Enforcement and remedies

Part 5-4 -- Remedies relating to guarantees

Section 259 Action against suppliers of goods

(1) A consumer may take action under this section if:
(a) a person (the supplier) supplies, in trade or commerce, goods to the
consumer; and
(b) a guarantee that applies to the supply under Subdivision A of Division 1 of
Part 3-2 (other than sections 58 and 59(1)) is not complied with.
(2) If the failure to comply with the guarantee can be remedied and is not a major
failure:
(a) the consumer may require the supplier to remedy the failure within a
reasonable time; or
(b) if such a requirement is made of the supplier but the supplier refuses or fails
to comply with the requirement, or fails to comply with the requirement
within a reasonable time--the consumer may:
(i) otherwise have the failure remedied and, by action against the
supplier, recover all reasonable costs incurred by the consumer in
having the failure so remedied; or
(ii) subject to section 262, notify the supplier that the consumer rejects
the goods and of the ground or grounds for the rejection.
 (3) If the failure to comply with the guarantee cannot be remedied or is a major failure,
the consumer may:
(a) subject to section 262, notify the supplier that the consumer rejects the goods
and of the ground or grounds for the rejection; or
(b) by action against the supplier, recover compensation for any reduction in
the value of the goods below the price paid or payable by the consumer for
the goods.
(4) The consumer may, by action against the supplier, recover damages for any loss or
damage suffered by the consumer because of the failure to comply with the
guarantee if it was reasonably foreseeable that the consumer would suffer such loss
or damage as a result of such a failure.
(5) Subsection (4) does not apply if the failure to comply with the guarantee occurred
only because of a cause independent of human control that occurred after the goods
left the control of the supplier.
(6) To avoid doubt, subsection (4) applies in addition to subsections (2) and (3).
(7) The consumer may take action under this section whether or not the goods are in
their original packaging.

Section 260 When a failure to comply with a guarantee is a major failure

A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of
goods is a major failure if:
(a) the goods would not have been acquired by a reasonable consumer fully acquainted
with the nature and extent of the failure; or
(b) ……………………………………………
(c) the goods are substantially unfit for a purpose for which goods of the same kind are
commonly supplied and they cannot, easily and within a reasonable time, be
remedied to make them fit for such a purpose; or
(d) the goods are unfit for a disclosed purpose that was made known to:
(i) the supplier of the goods; or
(ii) a person by whom any prior negotiations or arrangements in relation to the
acquisition of the goods were conducted or made;
and they cannot, easily and within a reasonable time, be remedied to make them fit for such a
purpose; or
(e) the goods are not of acceptable quality because they are unsafe.

Section 261 How suppliers may remedy a failure to comply with a guarantee
If, under section 259(2)(a), a consumer requires a supplier of goods to remedy a failure to
comply with a guarantee referred to in section 259(1)(b), the supplier may comply with the
requirement:
(a) …
(b) …by repairing the goods; or
(c) by replacing the goods with goods of an identical type; or
(d) by refunding:
(i) any money paid by the consumer for the goods; and
(ii) an amount that is equal to the value of any other consideration provided by
the consumer for the goods.
Section 263 Consequences of rejecting goods
(4) The supplier must, in accordance with an election made by the consumer:
(a) refund:
(i) any money paid by the consumer for the goods; and
(ii) an amount that is equal to the value of any other consideration
provided by the consumer for the goods; or
(b) replace the rejected goods with goods of the same type, and of similar value,
if such goods are reasonably available to the supplier.

II. Unfair contract terms

Chapter 2—General protections

Part 2 3—Unfair contract terms

Section 23 Unfair terms of consumer contracts and small business contracts

(1) A term of a consumer contract or small business contract is void if:
(a) the term is unfair; and
(b) the contract is a standard form contract.
(2) The contract continues to bind the parties if it is capable of operating without the
unfair term.
(3) A consumer contract is a contract for:
(a) a supply of goods or services; or
(b) a sale or grant of an interest in land;
to an individual whose acquisition of the goods, services or interest is wholly or predominantly
for personal, domestic or household use or consumption.
(4) A contract is a small business contract if:
(a) the contract is for a supply of goods or services, or a sale or grant of an interest
in land; and
(b) at the time the contract is entered into, at least one party to the contract is a
business that employs fewer than 20 persons; and
(c) either of the following applies:
(i) the upfront price payable under the contract does not exceed $300,000;
(ii) the contract has a duration of more than 12 months and the upfront price
payable under the contract does not exceed $1,000,000.
(5) In counting the persons employed by a business for the purposes of paragraph
(4)(b), a casual employee is not to be counted unless he or she is employed by the
business on a regular and systematic basis.
Section 24 Meaning of unfair
(1) A term of a consumer contract or small business contract is unfair if:
(a) it would cause a significant imbalance in the parties' rights and obligations
arising under the contract; and
(b) it is not reasonably necessary in order to protect the legitimate interests of
the party who would be advantaged by the term; and
(c) it would cause detriment (whether financial or otherwise) to a party if it were
to be applied or relied on.
(2) In determining whether a term of a contract is unfair under subsection (1), a court
may take into account such matters as it thinks relevant, but must take into account
the following:
(a) the extent to which the term is transparent;
(b) the contract as a whole.
(3) A term is transparent if the term is:
(a) expressed in reasonably plain language; and
(b) legible; and
(c) presented clearly; and
(d) readily available to any party affected by the term.
(4) For the purposes of subsection (1)(b), a term of a contract is presumed not to be
reasonably necessary in order to protect the legitimate interests of the party who
would be advantaged by the term, unless that party proves otherwise.

Section 27 Standard form contracts

(1) If a party to a proceeding alleges that a contract is a standard form contract, it is
presumed to be a standard form contract unless another party to the proceeding
proves otherwise.
(2) In determining whether a contract is a standard form contract, a court may take into
account such matters as it thinks relevant, but must take into account the following:
(a) whether one of the parties has all or most of the bargaining power relating to the
transaction;
(b) whether the contract was prepared by one party before any discussion relating to
the transaction occurred between the parties;