March 31, 2022
As a small business owner, you should be aware of the consumer laws that protect your customers and your business. Competition and Consumer Act 2010 (Cth) deals with how all businesses in Australia must deal with their customers, competitors and suppliers and The Australian Consumer Law (ACL) is schedule 2 to the Act. These laws include rules about consumer guarantees, refunds, and advertising. Knowing and following these laws can help you avoid legal problems and maintain a positive reputation with your customers. This article provides an overview of some of the most frequently triggered consumer laws.
The Australian Consumer Law (ACL) was expanded in July 2021 and small businesses are the main beneficiaries. ACL protects both you as a business owner, but also your clients who receive goods or services from you! Here is quick run-down of some of your rights under the ACL:
You are considered a consumer and entitled to consumer guarantee when you buy goods and services for:
Your business will be considered a consumer and entitled to consumer guarantees.
Note: Consumer guarantees do not apply if goods are purchased to be resold.
You might wonder what these consumer guarantees are. Consumer guarantees are promises under the ACL that businesses cannot contract out of. Examples of consumer guarantee in relation to goods and services are as follows:
What happens if a guarantee is breached, for example if goods are faulty?
Remedies for breach of consumer guarantees depend on the extent of the problem.
In case of a major problem, the consumer has the choice between
If the problem is minor, the supplier of goods can choose to provide a replacement, refund or repair free of charge. If the problem with services is minor, the consumer must give the supplier an opportunity to fix the issue free of charge. The consumer cannot cancel the contract.
Obviously as a small business owners you have obligations. Keeping abreast of your obligations ensures you are in compliance avoiding any legal headaches down the path. Some of your obligations are:
As a small business owner, you are covered against unfair contract terms. But what is an unfair contract term? An unfair contract term is a term only to be found in standard form contracts. Standard form contracts are agreements prepared by one party where the other party has had little or no opportunity to negotiate the terms.
A term may be unfair if it enables one party (and not the other) to:
If a term is considered unfair by a court, it will be voided.
If you’re a small business owner, it’s important to be aware of your rights and obligations under Competition and Consumer Laws. Contact our team of experts for legal advice if you have any questions or need help complying with the law.
This is NOT legal advice and should NOT be relied as such.