Australian consumer law

• A. The Corporations Act 2001
• B. The Competition and Consumer Act 2010 ✓
• C. The Privacy Act 1988
• D. The Australian Securities and Investments Commission Act 2001

Why: The Competition and Consumer Act 2010 (Cth) is the main federal statute governing consumer protection in Australia. It contains the Australian Consumer Law (ACL) in Schedule 2.

• A. The Reserve Bank of Australia
• B. The Australian Competition and Consumer Commission (ACCC) ✓
• C. The Office of the Australian Information Commissioner
• D. The Australian Taxation Office

Why: The ACCC is the national regulator responsible for enforcing the ACL, promoting competition, and taking action against misleading or unfair conduct in trade or commerce.

• A. The goods must be free of any defect whatsoever
• B. The goods must be of acceptable quality ✓
• C. The goods must be sold at the lowest market price
• D. The goods must be delivered within 24 hours

Why: Section 54 of the ACL guarantees that goods are of acceptable quality, meaning they are fit for purpose, safe, durable, free from defects, acceptable in appearance and finish, and match any description or sample.

• A. Businesses may exclude all consumer guarantees if the contract is in writing
• B. Businesses may exclude consumer guarantees provided the consumer signs a waiver
• C. Businesses cannot exclude, restrict or modify the consumer guarantees under the ACL ✓
• D. Businesses may exclude guarantees only for goods sold at a discount

Why: Section 64 of the ACL prohibits contracting out of the consumer guarantees. Any term attempting to exclude, restrict or modify them is void, regardless of whether the consumer agreed to it.

• A. Conduct that is intended to harm a competitor's business
• B. Conduct that is, or is likely to be, misleading or deceptive, regardless of intention ✓
• C. Only conduct that results in a consumer actually losing money
• D. Conduct that is carried out only through face-to-face sales

Why: Section 18 of the ACL prohibits conduct that is misleading or deceptive, or likely to mislead or deceive. The test is objective and does not require proof of intention or actual loss.

• A. The Competition and Consumer Act 2010 (Cth), Schedule 2 ✓
• B. The Corporations Act 2001 (Cth)
• C. The Sale of Goods Act 1923 (NSW)
• D. The Privacy Act 1988 (Cth)

Why: The Australian Consumer Law is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth), and it is there that the consumer guarantees are set out. The Corporations Act deals with company law, the Sale of Goods Act is a state law that has largely been superseded for consumer transactions, and the Privacy Act concerns personal information handling.

• A. The laptop is free from any defects and will never need repair.
• B. The laptop is durable, free from defects, safe, and fit for the purposes for which such goods are commonly supplied. ✓
• C. The laptop must be sold at the lowest price available in the market.
• D. The laptop must be delivered within 24 hours of purchase.

Why: Acceptable quality under the ACL requires goods to be safe, durable, free from defects, acceptable in appearance and finish, and fit for all the purposes for which goods of that kind are commonly supplied. Option A overstates the guarantee, since normal wear and tear is expected, and options C and D are not consumer guarantees.

• A. Services are excluded from the consumer guarantees regime in all circumstances.
• B. Services must be rendered with due care and skill and be fit for any purpose that the consumer made known to the supplier. ✓
• C. Services only need to be completed if the consumer pays in advance.
• D. Services are only covered if they are provided by a licensed professional.

Why: Under the ACL, services must be rendered with due care and skill, be fit for any disclosed purpose, and be supplied within a reasonable time if no time is agreed. The guarantees apply regardless of whether the supplier is licensed or whether payment was made in advance.

• A. Only a discount on the next purchase from the same supplier.
• B. A refund, replacement, or compensation for the reduction in value, at the consumer's choice. ✓
• C. Nothing, because the consumer must accept the product as sold.
• D. Only a repair, with no other option available.

Why: For a major failure, the consumer may choose to reject the goods and receive a refund or replacement, or to keep the goods and claim compensation for the drop in value. The choice of remedy belongs to the consumer, not the supplier, which is why option D is incorrect.

• A. A supplier can exclude consumer guarantees by including a clear statement in the sales contract.
• B. Consumer guarantees cannot be excluded, restricted, or modified by contract for consumer transactions. ✓
• C. Consumer guarantees only apply where the supplier has not provided a written warranty.
• D. Consumer guarantees can be waived by the consumer when signing a contract.

Why: Under the ACL, the consumer guarantees cannot be excluded, restricted, or modified, and any attempt to do so is void. A supplier's own warranty can supplement the statutory guarantees but cannot replace them. Consumers also cannot waive these rights by signing a contract.

• A. Sections 23 to 25 of the Australian Consumer Law (Competition and Consumer Act 2010 Schedule 2) ✓
• B. Sections 12CB to 12CC of the Australian Securities and Investments Commission Act 2001
• C. Sections 52 to 55 of the Trade Practices Act 1974
• D. Sections 18 to 19 of the Sale of Goods Act 1923

Why: Since 2016, unfair contract terms in standard form consumer and small business contracts are addressed in sections 23 to 25 of the Australian Consumer Law, found in Schedule 2 of the Competition and Consumer Act 2010. Sections 12CB and 12CC of the ASIC Act cover unfair terms in financial services contracts, not general consumer contracts.

• A. The term must be individually negotiated between the parties
• B. The term must cause a significant imbalance in the parties' rights and obligations, be not reasonably necessary to protect the legitimate interests of the party advantaged, and cause detriment if relied upon ✓
• C. The term must be included in a contract signed by both parties in the presence of a lawyer
• D. The term must be illegal under another statute

Why: Section 25 of the ACL sets out three cumulative elements: a significant imbalance in rights and obligations, that the term is not reasonably necessary to protect the legitimate interests of the advantaged party, and that it would cause detriment to the disadvantaged party if relied upon. Individual negotiation actually weighs against a finding of unfairness.

• A. The Australian Competition and Consumer Commission (ACCC) ✓
• B. The Australian Taxation Office (ATO)
• C. The Fair Work Commission
• D. The Australian Human Rights Commission

Why: The ACCC enforces the Australian Consumer Law, including the unfair contract terms provisions. It can seek civil penalties, injunctions, and corrective advertising orders. The ATO handles taxation, the Fair Work Commission handles employment matters, and the Human Rights Commission handles discrimination and human rights complaints.

• A. The entire contract becomes void from the outset
• B. The term is void, but the rest of the contract continues to bind the parties where it is capable of operating without the unfair term ✓
• C. The consumer must pay a fine to the business
• D. The business is automatically banned from trading

Why: Under section 23 of the ACL, an unfair term is void. However, the contract remains binding on the parties so far as it is capable of operating without the unfair term. The whole contract is not automatically voided, which preserves the bargain as far as possible.

• A. Only contracts for the sale of real property
• B. Only contracts negotiated individually between two large corporations
• C. Standard form consumer contracts and standard form small business contracts ✓
• D. Contracts made entirely by verbal agreement with no written terms

Why: The unfair contract terms regime applies to standard form consumer contracts and, since 2016, standard form small business contracts (where the business has fewer than 100 employees or turnover below a threshold). Individually negotiated contracts and certain excluded categories fall outside the regime.

• A. Section 18 ✓
• B. Section 50
• C. Section 29
• D. Section 74

Why: Section 18 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010) prohibits a person from engaging in conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive. Section 50 deals with mergers, section 29 with false or misleading representations about goods and services, and section 74 with the mandatory bar on certain price representations.

• A. Yes, intention to deceive must always be proven
• B. No, the conduct only needs to be misleading or likely to mislead or deceive ✓
• C. Yes, but only where the consumer suffered financial loss
• D. No, but the consumer must have actually relied on the conduct

Why: Liability under section 18 does not depend on intention or fault. The test is objective: whether the conduct is misleading or deceptive, or likely to mislead or deceive. Intention may be relevant to penalties but is not an element of the contravention.

• A. Whether the defendant acted in good faith
• B. Whether the conduct induced or was capable of inducing error in a reasonable person ✓
• C. Whether the consumer read the relevant terms and conditions
• D. Whether the conduct caused the consumer to pay a higher price

Why: Courts ask whether the conduct induced or was capable of inducing error, considering the overall impression created on the relevant audience, which typically includes ordinary or reasonable members of the class to whom the conduct was directed. Good faith and whether the consumer read the fine print are not decisive.

• A. Refusing to give a refund to a customer who changed their mind
• B. Failing to mention a material fact when the silence creates a false impression in the consumer's mind ✓
• C. Declining to disclose supplier pricing to a competitor
• D. Refusing to negotiate a lower price at the point of sale

Why: Section 4 of the ACL provides that misleading conduct can include silence in some circumstances. Where a business's silence about a material matter creates a false impression, it may breach section 18. Simply declining to disclose information or negotiate does not, by itself, amount to misleading conduct.

• A. Puffery is a specific, verifiable claim about a product's performance
• B. Puffery is vague, obviously exaggerated sales talk that a reasonable consumer would not take literally, and is generally not misleading ✓
• C. Puffery is always prohibited under section 18
• D. Puffery applies only to advertising on television

Why: Puffery refers to vague or obviously exaggerated statements, such as 'the best coffee in town', which ordinary consumers would not treat as factual claims. Such statements are generally not misleading or deceptive. Specific, verifiable claims are not puffery and can breach section 18 if false.

• A. The Australian Securities and Investments Commission (ASIC)
• B. The Australian Competition and Consumer Commission (ACCC) ✓
• C. The Therapeutic Goods Administration (TGA)
• D. The Australian Human Rights Commission (AHRC)

Why: The ACCC is the national regulator responsible for enforcing the Australian Consumer Law, including product safety provisions. ASIC regulates financial services and corporations, the TGA regulates therapeutic goods, and the AHRC deals with human rights matters, so they are not the primary consumer law enforcers.

• A. A guarantee that goods will be free of any defects for exactly 12 months
• B. A guarantee that goods are of acceptable quality ✓
• C. A guarantee that goods will always be cheaper than competitors' products
• D. A guarantee that goods can be returned for any reason within 30 days

Why: Section 54 of the ACL guarantees that goods are of acceptable quality, meaning they are safe, durable, free from defects, acceptable in appearance and finish, and fit for all purposes for which goods of that kind are commonly supplied. The other options are not statutory consumer guarantees under the ACL.

• A. They are not liable because the consumer did not read the instruction manual
• B. They may be liable for injury caused by the product, regardless of whether they were negligent ✓
• C. They are only liable if the consumer purchased the product directly from them
• D. They are only liable if the product was sold after the expiry date printed on the packaging

Why: Part 3-5 of the ACL establishes a product liability regime under which manufacturers can be liable for loss or damage caused by a safety defect in their goods. Liability does not depend on the consumer buying directly from the manufacturer, and is not defeated merely by the consumer failing to read the manual; the focus is on whether the product had a safety defect.

• A. A consumer's right to change their mind and return a product bought online
• B. A process where a supplier or manufacturer removes or fixes unsafe goods that have already been supplied to the public ✓
• C. A government ban on the import of a product from overseas
• D. A retailer's decision to discontinue a product due to low sales

Why: A product recall is the process by which suppliers or manufacturers take unsafe goods back from the market, either to repair, replace, or refund them. Under the ACL, suppliers must notify the ACCC and the public where a good has a safety defect, and recalls are a key tool for protecting consumers from products that are already in circulation.

• A. Any minor cosmetic scratch on the surface of a product
• B. A feature of a product that makes it less safe than consumers would generally expect ✓
• C. Any product that is priced above the average market rate
• D. A product that has been used by a consumer for more than five years

Why: Under section 9 of the ACL, a safety defect exists where the safety of the goods is less than consumers generally expect, taking into account factors such as the presentation of the goods, the use to which they would reasonably be expected to be put, and the time they were supplied. Cosmetic scratches, price, or age alone do not automatically establish a safety defect.

• A. Any conduct that causes a consumer to pay more than the market price for a good
• B. Conduct that is likely to mislead or deceive, whether or not anyone was actually misled ✓
• C. Only conduct that results in a consumer suffering financial loss
• D. Conduct that is made intentionally with the aim of deceiving a consumer

Why: Under section 18 of the ACL, the test is whether conduct is likely to mislead or deceive. Intention to deceive and actual loss are not required, which makes the prohibition broad and focused on the effect of the conduct on consumers.

• A. A business stating that its product is 'Made in Australia' when it was manufactured overseas ✓
• B. A business offering a standard refund policy of 30 days
• C. A retailer running a clearance sale on last season's stock
• D. A supplier providing a written warranty for its goods

Why: Falsely claiming country of origin is a false representation about the goods, which is prohibited under sections 29 and 18 of the ACL. The other options describe lawful commercial practices.

• A. Offering a discount to customers who pay in cash
• B. Using unfair contract terms in standard form consumer contracts ✓
• C. Advertising a product at a lower price than competitors
• D. Requiring customers to visit a physical store to make a return

Why: Unfair contract terms in standard form consumer contracts are prohibited under the ACL (Part 2-3), and such terms can be declared void. The other options are generally lawful commercial conduct.

• A. Advertising a product at a low price with no intention of supplying it on those terms, to lure customers to buy a more expensive alternative ✓
• B. Advertising using celebrity endorsements without disclosure
• C. Sending unsolicited marketing emails to consumers
• D. Offering prizes in a competition where the odds of winning are unknown

Why: Bait advertising is prohibited under section 36 of the ACL. It occurs when a business advertises goods at a bargain price intending to switch the customer to a dearer product, which is an unfair practice that misleads consumers.

• A. The Australian Securities and Investments Commission (ASIC)
• B. The Australian Competition and Consumer Commission (ACCC) ✓
• C. The Australian Taxation Office (ATO)
• D. The Reserve Bank of Australia (RBA)

Why: The ACCC enforces the ACL at the national level, including the prohibitions on misleading conduct and unfair practices. ASIC regulates financial services and corporations, while the ATO deals with taxation and the RBA with monetary policy.

• A. The Australian Securities and Investments Commission (ASIC)
• B. The Australian Competition and Consumer Commission (ACCC) ✓
• C. The Australian Prudential Regulation Authority (APRA)
• D. The Office of the Australian Information Commissioner (OAIC)

Why: The ACCC is the national regulator responsible for enforcing the Australian Consumer Law, including taking action against misleading and deceptive conduct and unfair practices. ASIC focuses on financial services and corporate regulation, APRA supervises financial institutions, and the OAIC handles privacy and information access matters.

• A. The consumer must always accept a replacement product only
• B. The consumer may be entitled to a refund, replacement, or compensation for reasonably foreseeable loss ✓
• C. The consumer must pay a restocking fee to return the goods
• D. The consumer has no remedy if the warranty period has expired

Why: Consumer guarantees under the ACL apply regardless of any manufacturer warranty. For major failures, a consumer may choose a refund or replacement, and may also claim compensation for reasonably foreseeable loss. Remedies depend on whether the failure is major or minor.

• A. 30 days from purchase
• B. 6 months from purchase
• C. Generally, the claim must be made within a reasonable time, and the guarantee period for durable goods is typically assessed by reference to the goods' expected lifespan ✓
• D. No claim can be made after the first year

Why: The ACL does not set a fixed limitation period for all goods. Instead, the consumer guarantee applies for a reasonable time, which is judged by the expected lifespan of the goods. Durable goods may be covered for several years, though the ACL's general limitation periods for court action also apply.

• A. Only a criminal fine imposed on the consumer
• B. Court orders such as injunctions, damages, or corrective advertising orders ✓
• C. Automatic cancellation of all consumer contracts
• D. Mandatory arbitration with no right to court action

Why: The ACL allows courts to grant a range of remedies for misleading or deceptive conduct, including injunctions to stop the conduct, damages, and orders requiring corrective advertising or publication. These aim to compensate the consumer and prevent future harm.

• A. They have no role; only the ACCC can enforce the ACL
• B. They can also take enforcement action and deal with consumer complaints within their jurisdiction ✓
• C. They only set the prices of consumer goods
• D. They only provide legal advice to suppliers

Why: The ACL is enforced jointly by the ACCC and state and territory consumer agencies. These bodies can investigate complaints, take enforcement action, and provide dispute resolution and information to consumers and businesses within their jurisdictions.