Commonwealth Numbered Acts

TRADE PRACTICES AMENDMENT ACT 1978 No. 206 of 1978 - SECT 14

14. After Division 2 of Part V of the Principal Act the following Division is
inserted:

''Division 2A-Actions against Manufacturers and Importers of Goods
Interpretation
''74A. (1) In this Division-

'express warranty', in relation to goods, means an undertaking, assertion or
statement in relation to the quality, performance or characteristics of the
goods given or made in connexion with the supply of the goods, or in connexion
with the promotion by any means of the supply or use of goods, the natural
tendency of which is to induce persons to acquire the goods;

'manufactured' includes grown, extracted, produced, processed and assembled.

''(2) In this Division-

   (a)  a reference to goods shall, unless the contrary intention appears, be
        read as a reference to goods of a kind ordinarily acquired for
        personal, domestic or household use or consumption;

   (b)  a reference to the quality of goods includes a reference to the state
        or condition of the goods;

   (c)  a reference to antecedent negotiations in relation to the acquisition
        of goods by a consumer shall be read as a reference to any
        negotiations or arrangements conducted or made with the consumer by
        another person in the course of a business carried on by the other
        person whereby the consumer was induced to acquire the goods or which
        otherwise promoted the acquisition of the goods by the consumer; and

   (d)  a reference to the person by whom any antecedent negotiations were
        conducted shall be read as a reference to the person by whom the
        negotiations or arrangements concerned were conducted or made.

''(3) If-

   (a)  a corporation holds itself out to the public as the manufacturer of
        goods;

   (b)  a corporation causes or permits the name of the corporation, a name by
        which the corporation carries on business or a brand or mark of the
        corporation to be applied to goods supplied by the corporation; or

   (c)  a corporation causes or permits another person, in connexion with the
        supply or possible supply of goods by that other person, or in
        connexion with the promotion by that other person by any means of the
        supply or use of goods, to hold out the corporation to the public as
        the manufacturer of the goods, the corporation shall be deemed, for
        the purpose of this Division, to have manufactured the goods.

''(4) If-

   (a)  goods are imported into Australia by a corporation that was not the
        manufacturer of the goods; and

   (b)  at the time of the importation the manufacturer of the goods does not
        have a place of business in Australia, the corporation shall be
        deemed, for the purposes of this Division, to have manufactured the
        goods.

''(5) For the purposes of paragraph (3) (b)-

   (a)  a name, brand or mark shall be deemed to be applied to goods if it-

        (i)    is woven in, impressed on, worked into or annexed or affixed to
               the goods; or

        (ii)   is applied to a covering, label, reel or thing in or with which
               the goods are supplied; and

   (b)  if the name of a corporation, a name in which a corporation carries on
        business or a brand or mark of a corporation is applied to goods, it
        shall be presumed, unless the contrary is established, that the
        corporation caused or permitted the name, brand or mark to be applied
        to the goods.

''(6) The reference in sub-section (5) to a covering includes a reference to a
stopper, glass, bottle, vessel, box, capsule, case, frame or wrapper and the
reference in that sub-section to a label includes a reference to a band or
ticket.

''(7) If goods are imported into Australia on behalf of a corporation, the
corporation shall be deemed, for the purposes of this Division, to have
imported the goods into Australia.

''(8) For the purposes of this Division, goods shall be taken to be supplied
to a consumer notwithstanding that, at the time of the supply, they are
affixed to land or premises. Actions in respect of unsuitable goods
''74B. (1) Where-

   (a)  a corporation, in trade or commerce, supplies goods manufactured by
        the corporation to another person who acquires the goods for
        re-supply;

   (b)  a person (whether or not the person who acquired the goods from the
        corporation) supplies the goods (otherwise than by way of sale by
        auction) to a consumer;

   (c)  the goods are acquired by the consumer for a particular purpose that
        was, expressly or by implication, made known to the corporation,
        either directly, or through the person from whom the consumer acquired
        the goods or a person by whom any antecedent negotiations in connexion
        with the acquisition of the goods were conducted;

   (d)  the goods are not reasonably fit for that purpose, whether or not that
        is a purpose for which such goods are commonly supplied; and

   (e)  the consumer suffers loss or damage by reason that the goods are not
        reasonably fit for that purpose, the corporation is liable to
        compensate the consumer for the loss or damage and the consumer may
        recover the amount of the compensation by action against the
        corporation in a court of competent jurisdiction.

''(2) Sub-section (1) does not apply-

   (a)  if the goods are not reasonably fit for the purpose referred to in
        that sub-section by reason of-

        (i)    an act or default of any person (not being the corporation or a
               servant or agent of the corporation);or

        (ii)   a cause independent of human control,

occurring after the goods have left the control of the corporations; or

   (b)  where the circumstances show that the consumer did not rely, or that
        it was unreasonable for the consumer to rely, on the skill or judgment
        of the corporation. Actions in respect of false descriptions
''74C. (1) Where-

   (a)  a corporation, in trade or commerce, supplies goods manufactured by
        the corporation to another person who acquires the goods for
        re-supply;

   (b)  a person (whether or not the person who acquired the goods from the
        corporation) supplies the goods (otherwise than by way of sale by
        auction) to a consumer by description;

   (c)  the goods do not correspond with the description; and

   (d)  the consumer suffers loss or damage by reason that the goods do not
        correspond with the description, the corporation is liable to
        compensate the consumer for the loss or damage and the consumer may
        recover the amount of the compensation by action against the
        corporation in a court of competent jurisdiction.

''(2) Sub-section (1) does not apply if the goods do not correspond with the
description referred to in that sub-section by reason of-

   (a)  an act or default of any person (not being the corporation or a
        servant or agent of the corporation); or

   (b)  a cause independent of human control, occurring after the goods have
        left the control of the corporation.

''(3) A corporation is not liable to compensate a consumer for loss or damage
suffered by the consumer by reason that goods do not correspond with a
description unless the description was applied to the goods-

   (a)  by or on behalf of the corporation; or

   (b)  with the consent of the corporation, whether express or implied.

''(4) If the goods referred to in sub-section (1) are supplied to the consumer
by reference to a sample as well as by description, it is not a defence to an
action under this section that the bulk of the goods corresponds with the
sample if the goods do not also correspond with the description.

''(5) A supply of goods is not prevented from being a supply by description
for the purposes of sub-section (1) by reason only that, being exposed for
sale or hire, they are selected by the consumer. Action in respect of goods of
unmerchantable quality
''74D. (1) Where-

   (a)  a corporation, in trade or commerce, supplies goods manufactured by
        the corporation to another person who acquires the goods for
        re-supply;

   (b)  a person (whether or not the person who acquired the goods from the
        corporation) supplies the goods (otherwise than by way of sale by
        auction) to a consumer;

   (c)  the goods are not of merchantable quality; and

   (d)  the consumer or any person who derives title to the goods through or
        under the consumer suffers loss or damage by reason that the goods are
        not of merchantable quality, the corporation is liable to compensate
        the consumer or person who so derives title to the goods for the loss
        or damage and the consumer or person who so derives title to the goods
        may recover the amount of the compensation by action against the
        corporation in a court of competent jurisdiction.

''(2) Sub-section (1) does not apply-

   (a)  if the goods are not of merchantable quality by reason of-

        (i)    an act or default of any person (not being the corporation or a
               servant or agent of the corporation); or

        (ii)   a cause independent of human control,

occurring after the goods have left the control of the corporation;

   (b)  as regards defects specifically drawn to the consumer's attention
        before the making of the contract for the supply of the goods to the
        consumer; or

   (c)  if the consumer examines the goods before that contract is made, as
        regards defects that the examination ought to reveal.

''(3) Goods of any kind are of merchantable quality within the meaning of this
section if they are as fit for the purpose or purposes for which goods of that
kind are commonly bought as it is reasonable to expect having regard to-

   (a)  any description applied to the goods by the corporation;

   (b)  the price received by the corporation for the goods (if relevant); and

   (c)  all the other relevant circumstances. Actions in respect of
        non-correspondence with samples, &c.
''74E. (1) Where-

   (a)  a corporation, in trade or commerce, supplies goods manufactured by
        the corporation to another person who acquires the goods for
        re-supply;

   (b)  a person (whether or not the person who acquired the goods from the
        corporation) supplies the goods (otherwise than by way of sale by
        auction) to a consumer;

   (c)  the goods are supplied to the consumer by reference to a sample;

   (d)  the bulk of the goods does not correspond with the sample in quality
        or the goods have a defect, rendering them unmerchantable, that is
        not, or would not be, apparent on reasonable examination of the
        sample; and

   (e)  the consumer suffers loss or damage by reason that the bulk does not
        correspond with the sample in quality or by reason that the goods have
        that defect, the corporation is liable to compensate the consumer for
        the loss or damage and the consumer may recover the amount of the loss
        or damage by action against the corporation in a court of competent
        jurisdiction.

''(2) Sub-section (1) does not apply where-

   (a)  the sample is not supplied by the corporation;

   (b)  the supply by sample is made without the express or implied
        concurrence of the corporation; or

   (c)  the failure of the bulk of the goods to correspond with the sample in
        quality or the existence of the defect is due to-

        (i)    an act or default of any person (not being the corporation or a
               servant or agent of the corporation), or a cause independent of
               human control, occurring after the goods have left the control
               of the corporation; or

        (ii)   other circumstances that were beyond the control of the
               corporation and that it could not reasonably be expected to
               have foreseen. Actions in respect of failure to provide
               facilities for repairs or parts
''74F. (1) Where-

   (a)  a corporation, in trade or commerce, supplies goods manufactured by
        the corporation to another person who acquires the goods for
        re-supply;

   (b)  a person (whether or not the person who acquired the goods from the
        corporation) supplies the goods (otherwise than by way of sale by
        auction) to a consumer;

   (c)  at a time (in this section referred to as the 'relevant time') after
        the acquisition of the goods by the consumer-

        (i)    the goods require to be repaired but facilities for their
               repair are not reasonably available to the consumer; or

        (ii)   a part is required for the goods but the part is not reasonably
               available to the consumer;

   (d)  the corporation acted unreasonably in failing to ensure that
        facilities for the repair of the goods were, or that the part was,
        reasonably available to the consumer at the relevant time; and

   (e)  the consumer suffers loss or damage by reason of the failure of the
        corporation to ensure that facilities for the repair of the goods
        were, or that the part was, reasonably available to the consumer at
        the relevant time, the corporation is liable to compensate the
        consumer for the loss or damage and the consumer may recover the
        amount of the compensation by action against the corporation in a
        court of competent jurisdiction.

''(2) Sub-section (1) does not apply where the corporation took reasonable
action to ensure that the consumer acquiring the goods would be given notice
at or before the time when he acquired the goods that-

   (a)  the corporation did not promise that facilities for the repair of the
        goods, or that parts for the goods, would be available; or

   (b)  the corporation did not promise that facilities for the repair of the
        goods, or that parts for the goods, would be available after a
        specified period, being a period that expired before the relevant
        time.

''(3) Where the corporation took reasonable action to ensure that the consumer
acquiring the goods would be given notice at or before the time when he
acquired the goods that the corporation did not promise that-

   (a)  facilities for the repair of the goods, being facilities of a kind
        specified in the notice, would be available;

   (b)  parts for the goods, being parts of a kind specified in the notice,
        would be available; or

   (c)  facilities for the repair of the goods would be available at, or parts
        for the goods would be available from, a place or places specified in
        the notice, the corporation is not liable to compensate the consumer
        for loss or damage suffered by the consumer by reason of the failure
        of the corporation to ensure that facilities of the kind specified in
        the notice, or parts of the kind specified in the notice, were
        available, or that facilities for the repair of the goods were
        available at, or parts for the goods were available from, a place or
        places specified in the notice, as the case may be.

''(4) In determining whether a corporation acted unreasonably in failing to
ensure that facilities for the repair of goods were, or that a part was,
reasonably available to the consumer at the relevant time, a court shall have
regard to all the circumstances of the case, and in particular to the
existence, at the relevant time, of circumstances that prevented those
facilities or that part being so available, being circumstances beyond the
control of the corporation. Actions in respect of non- compliance with express
warranty
''74G. (1) Where-

   (a)  a corporation, in trade or commerce, supplies goods manufactured by
        the corporation to another person who acquires the goods for
        re-supply;

   (b)  a person (whether or not the person who acquired the goods from the
        corporation) supplies the goods (otherwise than by way of sale by
        auction) to a consumer;

   (c)  the corporation fails to comply with an express warranty given or made
        by the corporation in relation to the goods; and

   (d)  the consumer suffers loss or damage by reason of the failure, the
        corporation is liable to compensate the consumer for the loss or
        damage and the consumer may recover the amount of the compensation by
        action against the corporation in a court of competent jurisdiction.

''(2) For the purposes of any action instituted by a consumer against a
corporation under this section, where-

   (a)  an undertaking, assertion or statement in relation to the quality,
        performance or characteristics of goods was given or made in connexion
        with the supply of the goods or in connexion with the promotion by any
        means of the supply or use of the goods; and

   (b)  the undertaking, assertion or statement would, if it had been given or
        made by the corporation or a person acting on its behalf, have
        constituted an express warranty in relation to the goods, it shall be
        presumed that the undertaking, assertion or statement was given or
        made by the corporation or a person acting on its behalf unless the
        corporation proves that it did not give or make, and did not cause or
        permit the giving or making of, the undertaking, assertion or
        statement. Right of seller to recover against manufacturer or importer
''74H. Where-

   (a)  a person (in this section referred to as the 'seller') is under a
        liability to another person (in this section referred to as the
        'consumer') in respect of loss or damage suffered by the consumer as a
        result of a breach of a condition or warranty implied by a provision
        of Division 2 in a contract for the supply of goods (whether or not
        the goods are of a kind ordinarily acquired for personal, domestic or
        household use or consumption) by the seller to the consumer; and

   (b)  a third person (in this section referred to as the 'manufacturer')-

        (i)    is liable to compensate the consumer in respect of the same
               loss or damage by reason of a provision of this Division; or

        (ii)   in a case where the goods referred to in paragraph (a) are not
               of a kind ordinarily acquired for personal, domestic or
               household use or consumption-would, if the provisions of
               sections 74B, 74C, 74D and 74E applied in relation to those
               goods, be liable to compensate the consumer in respect of the
               same loss or damage by reason of any of those provisions, the
               manufacturer is liable to indemnify the seller in respect of
               the liability of the seller to the consumer and the seller may,
               in respect of the manufacturer's liability to indemnify the
               seller, institute an action against the manufacturer in a court
               of competent jurisdiction for such legal or equitable relief as
               the seller could have obtained if the liability of the
               manufacturer to indemnify the seller had arisen under a
               contract of indemnity made between the manufacturer and the
               seller. Time for commencing actions
''74J. (1) Subject to this section, an action under a provision of this
Division may be commenced at any time within 3 years after the day on which
the cause of action accrued.

''(2) For the purposes of this section, a cause of action shall be deemed to
have accrued-

   (a)  in the case of an action other than an action under section 74H, on
        the day on which the consumer first became aware, or ought reasonably
        to have become aware-

        (i)    in the case of an action under section 74B-that the goods were
               not reasonably fit for the purpose referred to in that section;

        (ii)   in the case of an action under section 74C-that the goods did
               not correspond with the description referred to in that
               section;

        (iii)  in the case of an action under section 74D-that the goods were
               not of merchantable quality;

        (iv)   in the case of an action under section 74E-that the bulk of the
               goods did not correspond with the sample in quality or the
               goods had the defect referred to in that section;

        (v)    in the case of an action under section 74F-that the goods
               required to be repaired or that the part was required for the
               goods, as the case may be; or

        (vi)   in the case of an action under section 74G-of the failure of
               the corporation to comply with the express warranty referred to
               in that section; or

   (b)  in the case of an action under section 74H, on-

        (i)    the day, or the first day, as the case may be, on which the
               seller referred to in that section made a payment in respect
               of, or otherwise discharged in whole or in part, the liability
               of that seller to the consumer; or

        (ii)   the day on which a proceeding was instituted by the consumer
               against that seller in respect of that liability or, if more
               than one such proceeding was instituted, the day on which the
               first such proceeding was instituted,

whichever was the earlier.

''(3) In an action under a provision of this Division, it is a defence if the
defendant proves that the action was not commenced within 10 years after the
time of the first supply to a consumer of the goods to which the action
relates. Application of Division not to be excluded or modified
''74K. (1) Any 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)
that purports to exclude, restrict or modify, or has the effect of excluding,
restricting or modifying, any liability of a person to compensate or indemnify
another person that may arise under this Division, is void.

''(2) A term of a contract shall not be taken to exclude, restrict or modify
the application of a provision of this Division unless the term does so
expressly or is inconsistent with that provision.

''(3) Nothing in this section applies to a term of a contract referred to in
sub-section 74L (4). Limitation in certain circumstances of liability of
manufacturer to seller
''74L. (1) Notwithstanding section 74H but subject to this section, in the
case of goods other than goods of a kind ordinarily acquired for personal,
domestic or household use or consumption, the liability under that section of
a manufacturer to a seller is limited to a liability to pay to the seller an
amount equal to-

   (a)  the cost of replacing the goods;

   (b)  the cost of obtaining equivalent goods; or

   (c)  the cost of having the goods repaired, whichever is the lowest amount.

''(2) Sub-section (1) does not apply in relation to particular goods if the
seller establishes that it is not fair or reasonable for the liability of the
manufacturer in respect of those goods to be limited as mentioned in
sub-section (1).

''(3) In determining for the purposes of sub-section (2) whether or not it is
fair or reasonable for the liability of a manufacturer to a seller in respect
of goods to be limited as mentioned in sub-section (1), a court shall have
regard to all the circumstances of the case and, in particular, to-

   (a)  the availability of suitable alternative sources of supply of the
        goods;

   (b)  the availability of equivalent goods; and

   (c)  whether the goods were manufactured, processed or adapted to the
        special order of the seller.

''(4) This section is subject to any term of a contract between the
manufacturer and the seller imposing on the manufacturer a greater liability
than the liability mentioned in sub-section (1).

''(5) In this section, the expressions 'manufacturer' and 'seller' have the
same respective meanings as in section 74H.