Changes to consumer laws in 2021 and the impact on business

Changes to consumer laws in 2021 and the impact on business

There have been a number of changes to the Australian Consumer Law (ACL) recently. One of these is an increase in the financial threshold for the definition of ‘consumer’ from $40,000 to $100,000. From 1 July 2021, the consumer guarantees apply in any case where the price of the goods or services is less than $100,000. In other words, if the product is sold for less than $100,000 then the buyer is automatically a ‘consumer’ for the purposes of the ACL, whether or not the product is ordinarily regarded as a consumer good.

This change means that a great many more contracts will have the consumer guarantees and the protections they afford incorporated into them automatically by law. There is no requirement for them to be written into the contract of sale. This change is in-turn expected to benefit many businesses (in particular small businesses) which often enter into contracts for goods or services exceeding $40,000 but for less than $100,000. Examples include contracts to purchase new or replacement plant, machinery and equipment.

Formerly, where a product sold was not used for personal, domestic or household use (which would otherwise have invoked the consumer guarantees) then the contract would not ordinarily have been protected by the consumer guarantees. By extension, if a product was faulty or defective many buyers found themselves struggling to reach reasonable outcomes with suppliers where contract terms were also often stacked against them. These disputes were typically an uneven fight against a much larger business (with typically much greater resources available to carry on a legal fight if needs be). This in turn meant that many businesses which would have had a valid claim under a consumer guarantee found themselves unable to take such a claim due to not covered by the statutory regime.

Further, you may like to note that guarantees regarding goods include that they are to be fit for purpose, free from defects, safe and durable. The ‘guarantee’ will vary depending on the type of goods purchased. For example, an expensive fridge would be expected to last longer than a cheap item of clothing. Guarantees about services, entitle the buyer to expect due care and skill, fitness for purpose and the services to be provided within a reasonable time or within the time agreed. Where a breach of a consumer guarantee occurs, the consumer has a range of remedies available, including a repair, a refund, a replacement and/or compensation.

Finally, if you have read this far and think that you need some practical advice or assistance in relation to your situation, then now is probably the time to get in touch. Austral Legal can help and we offer an initial discounted 30-minute SmartMove appointment for $80 by phone or in person at our office. Bookings can be made online through our website or simply by phoning our office on 08 9745 9550. Once we have a handle on what is required, we may well be able to offer a fixed fee for any further legal services, giving you cost certainty from the start. Austral Legal. Practical advice.