Includes All The Statutory Requirements †Myassignmenthelp.Com

Question: Discuss About The Includes All The Statutory Requirements? Answer: Introducation The Australian Consumer Law (ACL) includes all the statutory requirements, remedies or courses of actions that would provide a guideline for the individuals and businesses who are dealing in commerce or trade. The ACL Act is the national law that deals with fair consumer and trading protection. The ACL also entails that a term of a consumer contract is void if the terms of the contract is unfair and the contract is a standard form of contract[1]. The contracts for sale between an individual as buyer and the developer as seller are considered standard form of contracts unless established otherwise. A consumer contract under the ACL refers to any contract for the sale or grant of a interest in land to any individual either predominantly or wholly for household, domestic or personal purpose. In order to determine whether a sale contract or a contract for grant f interest is a consumer contract under the ACL, the court shall consider the intention of the purchaser. In case land purchased in not used for private purposes, such contracts shall not be subject to the Australian Consumer Law[2]. As per Schedule 2 of the Competition and Consumer Act 2010, a contract for sale shall be considered as consumer contract under the Australian Consumer law provided such land be held for any household purpose as was found by the Supreme Court of West Australia in OPR WA Pty Ltd v Marron [2016] WASC 395. In case such land is held for the purpose of business investment, it shall be considered as a consumer contract under the Australian Consumer Law. The judgment of the court in this case establishes the fact that all lands purchased for household or private purposes shall be governed by the ACL. The ACL imposes certain limitations on the sellers and at the same time, endows the buyers with consumer guarantee with respect to the manner of carrying out the business operations. The limitations imposed upon the seller include application of deceptive or misleading conduct, use of unfair terms and bait advertisements. The paper entails about the impact, the Australian Consumer Law has on the sale of land with respect to unfair contract terms and misrepresentation. Unfair Contract terms The Trade Practices Amendment (Australian Consumer Law) Act (No. 1) 2010 (the ACL) aims at regulating unfair terms in standard form consumer contracts. The statute has substantial impact on developers contracts in relation to individuals[3]. After the commencement of the statute, the provisions for unfair terms stipulated under the statute that any unfair terms used in the standard form of contracts shall be considered as void and unenforceable. The ACL has laid down the terms that shall be considered as unfair terms, which are as follows: Any term that leads to a substantial imbalance in the rights and obligations of the parties; Any term that is not rationally necessary to safeguard the genuine interests of the developer; and, Any term that would be unfavorable for the purchaser, both financially or otherwise, if the purchaser relies on such terms; Although several clauses are incorporated in a developers contract that tends to result in favor of the developer and provides him with flexibility to complete the development project, but in order to establish the infringement of the ACL provisions, it is important to prove that the imbalance on part of the developer was significant. Further, in order to determine whether any particular term is necessary to safeguard the interests of the developer, the developer is required to provide evidence about the market in which they function, the economic factors that are imposed by the financiers, planning schemes and other regulations of the councils that provides the developer with a level of flexibility[4]. The statute requires the developers to ensure that their contracts include provision that provide discretion to the extent it is necessary to deliver finished products to the consumers and it must not provide any additional freedom as it would otherwise amount to unfair contractual terms. The terms that are not considered as unfair include the following: any term that defines the subject matter of the contract; any term that highlights the upfront price payable under the developers contract; any tern that is expressly allowed or are required to be incorporated by the state or Commonwealth law; As discussed, earlier about the restrictions that are imposed on the businesses with respect to the incorporation of the unfair terms in a standard form of consumer contracts, consumers are often made to sign standard contracts relating to the sale of land[5]. The new provisions related to unfair contracts terms purports to create transparent contracts in relation to consumer transactions with a view to deal with the risk that may arise with respect to such contracts. The terms would also serve the purpose of preventing the businesses from incorporating terms that may be unfavorable to the legitimate interest of the consumers. The incorporation of section 23 of the ACL stipulates that a term shall be considered void if such term is unfair and it affects the legitimate interest of the consumers. Further, the provisions of ACL are applicable only to transactions the value of which do not exceed $40000 or for transactions that are made to serve household and private purposes[6]. Thus, if the sale of land is made for household purpose, it shall become subject to the provisions of unfair terms stipulated under the contract. According to the definition of interest of land mentioned under Schedule 1, section 2 of the Australian Competition and Consumer Act 2010 (Cth), it is equal to the legal estate of land. It further includes shares of a company owning the land, right, a power, or privilege, held in relation to a land and occupancy right in the land or a building erected on it. The provisions of ACL are not applicable to business contracts rather the applicability of the provisions with respect to unfair terms is confined to standard form of contracts only. Nevertheless, as per section 27(1) of the Act, it is required to prove that a standard form of contract is not a contract that considers the contrary[7]. The onus of proof is on the seller to establish that the contract was subject to negotiation. Several factors that are laid down under Section 27(2) must be taken into consideration by the courts in order to determine whether the contract is a standard form of contract. This is because all contracts are deemed as standard form of contract unless the seller is able to establish the contrary. The provisions related to unfair terms as stipulated under section 24 of the ACL can be applied to a contract after the contract is assessed to be a standard form of contract by the court. The terms of the contract shall be considered as unfair if I causes an imbalance between the rights and responsibilities of the parties, and fails to safeguard the legitimate interests of the party who is otherwise, entitled to the benefits assured by the contract[8]. Further, it shall be considered as detrimental for the part in case the party acts, relying on the terms included in the contract. While entering into a sale of land contract, the Accounting must not incorporate any terms into the contract that violates the rights of a party excluding the restricted terms. They must not include terms that entitle only one party to terminate the contract, or terms that sets out penalties only for one party and other clauses that permits unilateral variation of interest in land and terms that restricts the right of one party towards legal actions[9]. In Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) it was found that a contract that has been subject to negotiation by the parties cannot include any term that can be deemed as unfair term. In ACCC v Bytecard Pty Ltd 2013, the court decided in favor of the Australian Completion and Consumer Commission against the defendant company in relation to the sale of an interest in land. This is the first case that applied the relevant provisions relating to the newly incorporated unfair contract terms under the ACL. In the case of Director of Consumer Affairs Victoria v AAPT Ltd (Civil Claims) [2006] VCAT 1493 the court held that if an additional term is added along with unfair term, to a contract in favor of the consumer, it would counter balance the unfair term in case the consumer is unaware of the terms. It is imperative for the developers to take reasonable steps to ensure that they have sufficient knowledge about the rules that have been imposed on them by the recently introduced provisions relating to unfair contract terms under the ACL so that the terms incorporated in the contract are not deemed as unfair terms. In case the court believes the term of a contract to be unfair, the aggrieved parties whose rights are breached must be entitled to terminate the contract. However, if there is a scope that these contract can still be valid and enforceable even after the removal of the unfair terms from the contract, the court shall orders to remove such unfair term and declare the contract to have a binding effect upon the parties[10]. Misrepresentation The term may be defined as a false statement that is made by one party in order to persuade the other party to enter into the contract, where such statement does not form any term of the contract. As per the Commonwealth and the state legislations, it is an offense to induce a person to enter into a contract by using false statements or by making misleading representations. The Australian Consumer Law (ACL) characterizes any false statements or misleading representations as an offence under section 2, Schedule 2 of the Act. Several instances of misrepresentations include testimonials for good or service, goods being new, any specific history or standard, value, quality, availability of repairing facilities, etc. According to section 18 of the ACL, a person within the scope of trade and commerce is prevented from engaging into any conduct that may cause misrepresentation either by way of misleading or deceptive conduct. According to section 30 of the ACL, a business or person is prohibited from making any misleading or false representation relating to sale or promotion of a property in land[11]. It also entails the sponsorship, approval, affiliation of individual by whom the statement is made, the kinds of benefits associated with the land, the venue, the price, the permission to have access to the facilities associated with the land. The section is applicable when there is misrepresentation and deceiving whole dealing with contracts for sale of land. In Given v Pryor (1979)[12], the court explained what might amount to misrepresentation and misleading conduct. In this case, the court asserted that representation is not restricted to verbal statement but extends to any form of oral or written statement, words, plans, drawings, maps and photographs and gestures and other conducts. Mere silence with respect to a fact shall be deemed as misrepresentation especially under circumstances where silence can have a negative impact on the purchaser. In Williams v Pisano[2015][13], the issue in question before the New South Wales court of appeal was to decide whether a seller of a private home who confesses having committed misrepresentation with respect to the quality of the house is liable under the statutory provisions of misleading and deceptive conduct stipulated the Australian Consumer Law. While determining the issue, the court had taken the proportionate liability regime as provided by Part VIA of the statute into consideration. In this case, the seller of the property was the owner of the building which implies that the owner shall be accountable for any defects arising out of the work carried out by her in the building. The seller and his wife owned the plot for several years and they decided to refurbish the same. The wife had obtained a builder permit and engaged consultants and a builder to develop a plan based on cost plus payment mode. The wife supervised the renovation work carried out by the builder but there was no detailed architectural supervision carried out. The vendors had made an advertisement for the sale of the property. A real estate agent had been engaged in order to assist for the sale. The wife introduced herself as the project designer. The sellers and the agent to the purchaser contended that the renovation work of the property had been carried out in the best possible way considering any expenses. After the property was sold, it was discovered by the purchaser that various short cuts were adopted while carrying out the renovation process, which led to significant defects[14]. One of the significant defects included a major problem related to water penetration. The trial judge held that the cost to remedy the damages was worth $1.2 million. The trial judge held that the wife was liable for the violation of warranties stipulated by her being the owner of the building. The purchaser made a further claim against the husband under the provisions of ACL that he was not accountable for the warranties. It was held by the trial judge that the representation made by William with respect to the claim, that the representation was made with respect to trade and commerce hence, the husband was imposed with a penalty of $1.7 million. The court held that there was a joint liability on part of each of the vendors. The husband appealed against the decision of the trial court. The following grounds of appeal were submitted before the court including that the representation of the vendor had not been made in trade or commerce and thus the ACL was not applicable to the defendant. The court further supported its decision on Taco Co of Australia Inv v Taco Bell Pty Ltd (1982)[15]. The court held that when it comes to the sale of land, the vendors of land shall be subject to the same rules of misrepresentation as discussed above in relation to the contract for the sale of land. In the case of Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011][16] it had been provided by the court that there has been violation of provisions Section 30 of the ACL. The violation was caused in relation to valuation on the ground that it made misleading and false statement related to the payable price for the land. Thus, from the above discussion, it can be stated that the Australian consumer law has become more stringent in its application when it comes to the sale of land for serving household and domestic purpose. It requires application of the statutory provisions with a view to safeguard the rights of the consumers. The businesses must have knowledge about the impact and outcomes of unfair terms and misrepresentation with respect to consumer contracts in relation to sale of land must take reasonable steps to avert the legal liabilities. Reference ACCC v Bytecard Pty Ltd 2013 Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No 4) [2011] FCA 442 Butler, Desmond, et al. "Contract Law Case Book." (2013). Casson, Jonathan. "Small business and unfair contract terms: Changes on the horizon."LSJ: Law Society of NSW Journal3.2 (2016): 76. Competition, Australian, and Consumer Commission. "Compliance and enforcement policy." (2017). Director of Consumer Affairs Victoria v AAPT Ltd (Civil Claims) [2006] VCAT 1493 Director of Consumer Affairs Victoria v Craig Langley Pty Ltd Matrix Pilates and Yoga Pty Ltd (Civil Claims) Evans, Phil. "The building and construction industry code of conduct (WA)."Brief44.6 (2017): 22. Given v Pryor (1979) 39 FLR 437 Greenwood, Verity, and Larry Dwyer. "Consumer protection as essential to destination competitiveness."CAUTHE 2015: Rising Tides and Sea Changes: Adaptation and Innovation in Tourism and Hospitality(2015): 486. Latimer, Paul. "Protecting Consumers from Unfair Contract Terms: Australian Comparisons." (2016). Nahan, N., and Eileen Webb. "Unfair contract terms in consumer contracts."Consumer Law and Policy in Australia and New Zealand. 2013. Pearson, Gail. "Current Issues for Consumer Protection Law in Australia."Consumer Law and Socioeconomic Development. Springer, Cham, 2017. 199-208. Pearson, Gail. "Further challenges for Australian consumer law."Consumer Law and Socioeconomic Development. Springer, Cham, 2017. 287-305. Simons, Josh. "The end of'unfairness' in commercial contracts: Proposed extension of'unfair contract terms' laws to business to business transactions."Governance Directions66.7 (2014): 431. Smith, Nicholas. "Intellectual property: Misleading and deceptive conduct: When copying is not enough."LSJ: Law Society of NSW Journal11 (2015): 76. Supreme Court of West Australia in OPR WA Pty Ltd v Marron [2016] WASC 395. Taco Co of Australia Inv v Taco Bell Pty Ltd (1982) 2 TPR 48 Tran-Tsai, Kye. "Property law: Off-the-plan contracts: The sun has set on vendors' rescission rights."LSJ: Law Society of NSW Journal3.1 (2016): 80. Williams v Pisano[2015]NSWCA 17 [1] Latimer, Paul. "Protecting Consumers from Unfair Contract Terms: Australian Comparisons." (2016). [2] Simons, Josh. "The end of'unfairness' in commercial contracts: Proposed extension of'unfair contract terms' laws to business to business transactions."Governance Directions66.7 (2014): 431. [3] Pearson, Gail. "Current Issues for Consumer Protection Law in Australia."Consumer Law and Socioeconomic Development. Springer, Cham, 2017. 199-208. [4] Casson, Jonathan. "Small business and unfair contract terms: Changes on the horizon."LSJ: Law Society of NSW Journal3.2 (2016): 76. [5] Nahan, N., and Eileen Webb. "Unfair contract terms in consumer contracts."Consumer Law and Policy in Australia and New Zealand. 2013. [6] Competition, Australian, and Consumer Commission. "Compliance and enforcement policy." (2017). [7] Pearson, Gail. "Further challenges for Australian consumer law."Consumer Law and Socioeconomic Development. Springer, Cham, 2017. 287-305. [8] Butler, Desmond, et al. "Contract Law Case Book." (2013). [9] Evans, Phil. "The building and construction industry code of conduct (WA)."Brief44.6 (2017): 22. [10] Smith, Nicholas. "Intellectual property: Misleading and deceptive conduct: When copying is not enough."LSJ: Law Society of NSW Journal11 (2015): 76. [11] Tran-Tsai, Kye. "Property law: Off-the-plan contracts: The sun has set on vendors' rescission rights."LSJ: Law Society of NSW Journal3.1 (2016): 80. [12] [1979] 39 FLR 437. [13] NSWCA 177. [14] Greenwood, Verity, and Larry Dwyer. "Consumer protection as essential to destination competitiveness."CAUTHE 2015: Rising Tides and Sea Changes: Adaptation and Innovation in Tourism and Hospitality(2015): 486. [15] [1982] 2 TPR 48. [16] [2011] FCA 442.