Category: Australian Consumer Law

Don’t oversell your capabilities

Over the years we have assisted many of our clients when responding to commercial tenders for the provision of goods or services. Care must be taken when responding to tenders to ensure compliance with the Australian Consumer Law (formerly Trade Practices Act 1974), which applies nationally to all Australian businesses.

Under Chapter 2 (General protections) of the Australian Consumer Law, certain standards of business conduct in the market have been laid out, including:

  1. a general ban on false, misleading and deceptive conduct in trade or commerce;
  2. a general ban on unconscionable conduct in trade or commerce and specific bans on unconscionable conduct in consumer and some business transactions; and
  3. a provision that makes unfair contract terms in consumer contracts void.

Suppliers of goods or services can be found liable if they make false, misleading or deceptive statements about their goods or services. A recent example can be found in the decision from the NSW Court of Appeal dated 3 September 2015. In this case, a technology manufacturer had made incorrect representations about the compatibility of its product with others used by the customer and the reseller had relied upon such representations in its tender to the customer. The manufacturer was found liable of misrepresentation regarding the technical capability of its product supplied as part of the tender process.

In addition to the above bans and protection, the Australian Consumer Law provides businesses with guaranteed rights. When a business purchases a good of a value of $40,000 or less, for use within the business, the law guarantees the product must be safe, durable, free from defects, fit for purpose, acceptable in appearance, match its description and match any sample or demonstration model.

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