CONSUMER LAWILAC 1/2:Robert is renovating his home kitchen and decides to replace the old electric oven. He buys a newgas oven from Nice Guys, who deliver and install it for him. A few days later, Robert is cooking aroast dinner in the oven and it explodes, causing substantial damage to his house.Does Robert have any rights against Nice Guys under the Australian Consumer Law?ANSWERIssue:Under the Australian Consumer Law (ACL):1.Can Robert sue Nice Guys for breach of the consumer guarantees regarding acceptablequality and fitness for purpose?2.If so, what remedies will be available to Robert?LawLegislation - Competition and Consumer Act (2010) (ACL)ss3(1)(a), (b), (c) & (2): Definition - Consumers54: Guarantee - Acceptable Qualitys55: Guarantee - Fitness for Purposes236: DamagesCasesNone applicableApplicationRobert is the consumer of Nice Guys based on the definition of consumer which stated in s3(1) as aperson who acquired particular goods if the amount payable for the goods did not exceed $40,000; orthe goods were of a kind ordinarily acquired for personal, domestic or household use or consumption;or the goods consisted of a vehicle or trailer for use principally in the transport of goods on publicroads (“Slide”, p7). The gas oven Robert bought from Nice Guys fits the second qualification as a“household use” application (“Facts”). On the other hand, according to section 3(2), a person is not aconsumer if they purchase the goods for re-supply, or to use them in the course of production. In thiscase, Robert only uses the oven for cooking purpose (i.e: roast dinner) (“Facts) so section 3(2) doesnot apply.Because Robert is a consumer of Nice Guys, this means he has guarantees from the companyapplied to him. And in this circumstance, Robert can sue Nice Guys for breach of the consumerguarantees regarding acceptable quality and fitness for purpose. Firstly, section 54 states that goodsmust be of an “acceptable quality” having regard to the type of goods, the price paid and any otherrelevant circumstances. Meanwhile, section 55 states that goods must be fit for any “disclosedpurpose”. A disclosed purpose can be made known to the supplier or the manufacturer eitherexpressly or by implication (“Slides”, p9). However, when Robert uses the gas oven it explodes whichproves it does not satisfy both guarantees (“Facts”).Conclusion
On the balance of probabilities it is likely the Federal Court will find that Robert does have an actionagainst Nice Guys for breach of the consumer guarantees regarding acceptable quality and fitness forpurpose. Robert is likely to be able to recover damages under s236. ILAC 2/2: Mr Smith decides to sell his hotel, The King’s Feet Hotel, which operates 160 poker machines. MrJones, a potential buyer, inspects the Hotel, counts 160 poker machines in the gaming room of theHotel, and inspects the financial records.