If you run a business in Australia, you’ll be affected by the Australian Consumer Law (ACL). Whether you work with customers, businesses, provide services or sell goods, it is important to know how the consumer laws affects your business.
The ACL is a national, generic law which applies in the same way to all sectors and in all Australian jurisdictions. This means that all consumers in Australia enjoy the same rights and all businesses have the same obligations, regardless of which state or territory you or the business reside in.
The ACL covers general standards of business conduct, prohibits unfair trading practices, regulates specific types of business-to-consumer transactions, provides basic consumer guarantees for goods and services , and regulates the safety of consumer products and product-related services.
The ACL governs many business transactions and provides protections for consumers under the law. New changes to the ACL which came into effect on 1 July 2021 have broadened the definition of ‘consumer’, providing greater legal protection for business-to-business transactions.
How has the Australian Consumer Law changed?
The ACL provides ‘consumers’ with a number of legal protections against suppliers of goods and services. These include consumer guarantees, such as goods being fit for their purpose and of acceptable quality. Under the recent changes to the ACL, the monetary threshold of goods and services to determine whether a person or business is a ‘consumer’ has increased from $40,000 to $100,000.
Who is a ‘consumer’ under changes to the ACL?
From 1 July 2021, the definition of ‘consumer’became a person or business who acquires goods or services:
- for $100,000 or less (increased from the previous threshold of $40,000); or
- which are ordinarily acquired for personal, domestic or household use or consumption; or
- consisting of a vehicle or trailer acquired principally for the transport of goods on public roads.
Consumers who fall within one of these definitions have available protections under the Australian Consumer Law, including consumer guarantees.
So, what are consumer guarantees?
The ACL provides for a number of statutory guarantees for goods and services to protect consumers under the law.
These include that any goods supplied are:
- of acceptable quality;
- fit for their purpose;
- accurately described;
- match any sample or demonstration model; and
- satisfy any express warranty.
Suppliers must also guarantee that any services are:
- provided with due care and skill;
- fit for their purpose; and
- provided within the stated time or a reasonable time where it is not stated.
What does this mean?
Businesses should consider the impact of the changes to the Australian Consumer Law on their transactions. To ensure compliance, businesses may wish to:
- Review existing arrangements and determine whether they are now covered by the ACL under the increased threshold;
- Review how their services and products are marketed or described and ensure this matches the service or product;
- Update their policies, terms and conditions, and contracts to manage liability risks; and
- Talk to a legal professional about business compliance with the Australian Consumer Law.
If you need more information about your rights as a consumer or a business please contact Jeremy or Noel for a confidential conversation.