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The original 20 consumer laws that had governed the states and its territories across the Commonwealth were replaced by the "Australian Consumer Laws," which went into force on January 1st, 2011. The Law was established with the primary goal of providing unified customer protection laws. Due to its incorporation into all Australian State laws, it is enforceable as a rule of the Commonwealth of Australia. Unfair contract terms, safety laws and enforcement mechanisms, guarantees for purchases, unsolicited consumer agreements, penalties, powers of enforcement, consumer redress, and rules on rules for lays are some of the issues that the law is particularly worried about. The Law as effected applies to all businesses that are conducted nationally
and within the various territories and its States however any business transactions that occurred before the 1st January 2011 would be governed by the previous State and Territory as well as national consumer laws. The Consumer Law is administered by consumer protection agencies at the State level, as well as ‘Australian Competition and Consumer Commission’ even though the enforcement is under the Australian tribunals and courts of States and territories. Under the Australian Consumer Law, the consumers do possess similar expectations and protection regarding business conduct whilst in Australia. Likewise, the businesses are obliged by the law while in operations.
Specific Provisions in Competition and Consumer Act 2010 and Impact on Contracts
The Australian Consumer Law is envisaged in the Competition and Consumer Act 2010. Within the Act, there are a number of provisions that are necessary for the businesses to take place with regards to land and buildings. The specific focus is on Chapter 1 Section 12 that provides for how the license and leases of the land should be handled to ensure there is continuous business. The provisions outline the standard and recommended practices those vendors and their agents must undertake while leasing land. Chapter 2 Part 2-1 Section 18 (1) prohibits traders from engaging in deceptive and misleading acts that are likely to cause undue advantage over the innocent party during commerce or trade. Closely related to this Section is Part 2-2, S 20(1) that warns those engaged in business such as the builders and land dealers to avoid engaging in unconscionable conducts that may make the innocent part to incur financial losses or put him or her at a disadvantaged position. Part 2-3 of the Competition and Consumer Act 2010 further provides for S 23 (1) that prohibits business deals that are based on unfair terms of contracts. In particular the said S 23 stipulates conditions under which a contract is void and specifically states that a contract is void if it is a standard form or if it unfair. Section 24 of the Act also defines what constitutes unfair contract and warns any business person be it the land dealers and renovators to stick to the fair practices. The same Section 24 (2) defines what a fair contract is and in particular notes that the elements of transparency and the contract as a whole defines what fairness implies in business. Section 24 (3) requires that business contracts such as sale land and development be in plain language, legible, clear and readily available. The provisions as established in Part 2-3, Section 27 stipulates that a contract is of standard for as stated unless otherwise proven by one party.
Chapter 3 particularly Section 29 (1) specifically outlines the unfair practices while engaged in business contracts. It prohibits business persons from offering misleading or misinterpretation reading the standard, quality, agreement among other things between the parties to a contract. Section 30 prohibits any false or misinterpretation about sale of land with regards to interest on the land, affiliation or sponsorship , price to be paid, use, location characteristic and existence of attached facility. Section 50 talks of harassment and coercion that one must be subjected to such as undue influence or physical force while engaged in contract of sale of land, payment or grant on the same. The provision further in Section 69 cautions parties to a contract such as land to avoid solicited consumer agreement. It encourages business dealings through negotiation or door to door that is unsolicited. These sections among other ensures that the land and building vendors are guided according while engaged in their daily today transactions without compromising each other thus ensuring that business is run in accordance to standard and recommended practices.
Unfair Contract Terms and Applicability in Property
Under this provision, a contract to buy property or land in any given plan is deemed to be unfair under the Australian Consumer Law when the contract in question is of a standard form. Under standard contract, a person is deemed to buy or sell goods for personal use only. In this case one is considered to have entered into a contract to supply services or goods or sale of land for own use. In this type of contract, there is no negotiation and the contract is prepared by an individual and it’s on ‘a take it or leave it’ terms. If however the ‘off-the-plan’ contract of purchase is made with intention to invest or business purposes, the Law does not apply. The term of a contract that contains unfair practices is deemed to be void and any party to that agreement at any time may opt out of the same. There are certain features that must be met for a contract to be deemed as unfair.
If the contract in question is bound to cause a considerable imbalance in the parties; obligations and rights that arise from the contract.
If it is not sensibly essential to defend the lawful interest of the party who would be privileged by the term.
If the said contract would cause financial or otherwise, to a party when such contract is relied or be applied upon.
If however a court strikes out the unfair term, then unfair contract would proceed unless the unfair section is central to the agreement being entered into by the parties. In the case where the unfair term is central and cannot be struck, then, the contract is likely to be unenforceable. It is thus the duty of a court to determine and establish if a term is unfair within a standard form of contract. It is however expressly stated within the Australian Consumer Law that stipulations that defines the key subject matter of a contract or a term is permitted or required by law, sets the upfront price is not considered as unfair. It is in addition not applicable to commodities that a consumer has agreed to purchase.
Misrepresentation in the Sale of Land
The Australian Consumer Law has directly stipulated that consumers must at all cost be protected against any misleading or false representations that are likely to cause financials loss to the parties involved. Whenever a sale of goods or property such as land is involved due diligence must be conducted to ensure that the buyer does not suffer any material loss due to the transaction engaged in. Chapter 2 of the Australian Consumer Law provides for the right of the buyer against unconscionable and deceptive acts that end up causing losses to the purchaser. In particular, Section 30(1) of the Australian Consumer law does provide that anybody in a business dealing such as commerce or trade in connection to grant or sale or grant of an interest or the possible sale or promotion by way of sale should not make any false representation or any misrepresentation with regards to characteristic, price payable, nature of interest, location, use and any sponsorship relating to land
Case Study on Misrepresentation
In the case of Pryor v Given ‘(1979) 24 ALR 442; (1980) 30 ALR 189 (FC)’, the appellant had engaged in misleading information and the case was filed under Federal Court of Australia. In this case the appellant had engaged in advertisement regarding a sale of land through media. During the advertisement the appellant had used pictorial representation as well as the following words a ‘wonderful place to live’ and ‘watch it grow’ to refer to the peace of land under the market consideration. According to the advertisement, the appellant had indicated that once bought the peace of land could be used to build houses when in essence the peace of land was under special planning that needed permission other than being based on onerous conditions. According to the appellate judge, the advertisement could easily convince an individual that once purchase was done, one could easily engage in building when this was not the case pursuant to s 53A(1)(b) of the Trade Practices Act 1974, which was a predecessor to s 30(1)(f) of the Australian Consumer Law. According to Section 30 provisions of the Australian Consumer Law, one needs not to prove that a sale was likely or resulted from the misleading advertisement or misrepresentation as long as the misrepresented advert was run. In this connection, much as the decision was made in relation to Section 30 of the Consumer Law, the authority of ‘Videon v Barry Burroughs Pty Ltd (1981) 37 ALR 365’ was critical when it was held by Federal Court of Australia that:
“For a misleading statement to be made “in connection with the promotion of the sale” there is no necessity to establish that a sale resulted from or was the likely result of the making of a statement. The fact that a brochure containing the statement was available to the public is sufficient and there is no need to establish that it was read by any person...”
More recent authority however, has been brought on record to clarify when a vendor is deemed to sell a property. In the case of ‘Pisano v Georgia Dandris  NSWSC 1070 ‘ more clarification has been granted on when one is considered to be trading a property for commercial purposes under the Australian Consumer Law. It is particularly noted that an ordinary sale of residential premise is not applicable in Australian Consumer Law. Under this case the owner of the house having lived for quite some time decided to renovate the house thereafter advertised the same and eventually selling the house to Pisano. Earlier on a primary court had found the defendant guilty of damages arising out of the sale of property. The case was appealed and the judgment overturned on grounds that the despite the advertisement and the renovations the house sold for personal use and not for commercial purposes thus the Consumer Law was not applicable.
How Consumer Contract Affect Sales of Land under Australian Consumer Law
As earlier noted, under the Australian Consumer Law, a contract that involves consumer must include any of the following a contract of grant, sale of an interest in land to a person for the purposes of domestic or household or personal use. The decision thus on which a contract is for grant of interest or sale of land depends entirely on the intention of buyer. It is thus critical for the developers to collect necessary information or data pertaining to the potential purchaser to help establish the intention of the prospective buyer as whether it’s for personal use or investment purposes. The application of The Australian Consumer Law would not be applicable where the purchaser intends to use the land for investment purposes. Where proper research is not done by the vendors and their agents, the business may end up losing on such claims as may be made against them regarding the intention for purchasing a house. The law requires that careful analysis of implied terms be evaluated to ascertain whether the purchaser has the intention to buy the land for private use or for business purposes.
Chapter 2 of the Australian Consumer Law has provided the generally accepted conduct for business entities as well as providing the unethical behaviors that shapes the operations of business. Businesses are in particular warned from engaging in deceptive or misleading conducts that are likely to cause harm to the trading party. In this connection, the Law has provided a smooth operation environment free from infringement. It puts the business owners particularly those who would like to sell land to be straight forward and provide the necessary conducts that are truthful and reflects the true value of the deals. Any individual who suffers as a result of misrepresentation involving sale of land is eligible to compensation as set up the Australian Consumer Law and can be ascertained by the tribunal or court in question. The chapter provides for proper dealings as it warns entities from making misleading statement while in trade. Full disclosure is provided for within the Law and failure to do so amounts to breach and damages are claimable. The land seller as well as builders must therefore make a honest promise, provide a honest opinions , honest predictions as well as disclose necessary information that influence the decisions of purchaser.
Chapter 2 again prohibits any party to a contract from engaging in unconscionable conduct towards business or consumer. This chapter also ensures that there is trust within the business. To the land owners and buyers, it is critical therefore to ensure that no any form of conduct that is likely to interfere with the bargaining and negation ability of the parties. Establishing whether an individual has engaged in unconscionable act would depend on a number of factors such undue influence, unfair or pressure by stronger party, bargaining power of parties, extent of utmost good faith as well as willingness to negotiate conditions and terms of the contract. Because of this established mechanism of free and fair trade environment, the house builders and land vendors have been offered opportunities to ensure they present facts and not use their undue influence to secure business deals.
The Law provides for consumers protection provisions that do not allow deceptive or misleading conduct while engaged in any business dealings such as sale of land as well as building and constructions. It in addition provides for unfair terms and unconscionable conduct in a standard contract. Furthermore, the Law provides for specific protection not in favor of definite defined unfair practices with particular focus to component pricing, pyramid selling, deceptive or misleading conduct, provision of bills as well as unsolicited supplies of commodities. The Law further provides for regulations that relates to the consumer transactions such as consumer’s guarantee less than $40,000, as well as framework for unsolicited selling such as telephone sales and doo to door selling. The consumer redress option are provided for to ensure that any contract entered into can be enforced should the need be. The last provision is national product safety to ensure all the products being offered are up to standard. Without this Act, the sale agreements between the buyers would be skewed towards one side that has the ability to influence each other.
Consumer Affairs Australia and New Zealand. (2017). Australian Consumer Law Review: Final Report. Commonwealth of Australia .
Competition and Consumer Act 2010 (Cth) sch 2 Australian Consumer Law s 3.
Department of Commerce. (2014). Buying Land or Property Off-the-plan. Government of Western Australia Department of Commerce Consumer Protection .
NSW Governent. (2010). Consumer law changes in NSW. Fact Sheet .
Pryor v Given ‘(1979) 24 ALR 442; (1980) 30 ALR 189 (FC)
Pisano v Georgia Dandris  NSWSC 1070
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