Not only has the world of online shopping expanded exponentially in recent years, but also its growth is set to continue. While shopping online offers consumers a different kind of experience to traditional stores, the consumer law obligations that apply to the proprietors of bricks and mortar stores equally affect online retailers.  This article discusses three e-commerce laws that online retailers need to consider.

1. Australian Consumer Law

The Australian Consumer Law (‘ACL’) (Cth) is one of the most important e-commerce laws that online retailers need to consider. It is the primary legislation governing consumer law in Australia. The legislation exists as Schedule 2 of the Competition and Consumer Act 2010 (Cth). It applies in all Australian states and territories, even if your business trades online.  The Australian Competition and Consumer Commission enforces the ACL and investigates all breaches of it.

The Australian government enacted the ACL to provide certain protections and assurances to consumers. The legislation works to mitigate the relative power differentials between individual consumers and businesses, particularly large businesses.

The ACL provides a set of guarantees for all Australian consumers when they purchase certain goods or services. The guarantees apply to:

  • Goods or services up to $40,000.00; and
  • Goods or services over $40,000.00 typically purchased for domestic, household or personal purposes;
  • Business vehicles and trailers used to transport goods.

All businesses must meet these guarantees automatically, in addition to any other warranty that they provide to consumers. These guarantees give purchasers legally enforceable rights against a business if they do not meet their obligations.  The ACL also specifies appropriate remedies in cases where the consumer guarantees are breached.  No business can contract out of these obligations.

How the ACL Affects Online Businesses

Under the ACL, a supplier is any person who, in the course of business, sells goods or services. People commonly describe them as traders, retailers or service providers.

The ACL, therefore, applies to goods and services purchased online from an Australian business. As such, all online retailers must meet the consumer guarantees and must be prepared to offer a customer the appropriate remedy if a product does not.

As an online retailer, you must also be aware that the ACL does not cover the field of consumer law. Your online business may have obligations under other relevant state or territory legislation in addition to those under the ACL.

2. Consumer Guarantees

If a consumer purchases a good, the ACL provides that:

  • It is of an acceptable quality, safe, without faults and lasts;
  • Matches any description made by the retailer (on packaging, labels, in promotions or advertising);
  • Matches any sample or demonstration model;
  • Comes with undisturbed possession so that another person cannot repossess,  take back the product or prevent a consumer from using it;
  • Is fit for the purpose the supplier informed the consumer it was fit for and any purpose the consumer specified to the supplier before purchase;
  • Comes with full title and ownership;
  • Carries no hidden securities or charges;
  • Meets any additional promises made by a supplier as regards performance, quality, condition. For example, a lifetime guarantee; and
  • Has spare parts and repair facilities available for a reasonable time after purchase unless the supplier informed the consumer otherwise before purchase.

Further, when consumers purchase a service, the ACL guarantees that:

  • The supplier will provide the service with acceptable care and appropriate skill. Further, the supplier will take the necessary care to avoid damage or loss;
  • The service is fit for the purpose or gives the result agreed between the supplier and consumer;
  • Be supplied within a reasonable time (even if the supplier specified no date or time).

3. Remedies

If a retailer does not meet all of their consumer guarantees, a consumer has the right to seek a:

  • Repair;
  • Replacement; or
  • Refund.

The situations when a consumer can request these remedies vary. For example, they cannot seek a refund at first instance. In some cases, a consumer may also have the right to compensation for loss and damages. A consumer has no legal right to a remedy if they only changed their mind about an online purchase.

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LegalVision has provided many businesses with tailored online legal advice.  If you have any further questions about how e-commerce laws affect your business, get in touch with LegalVision today on 1300 544 755.

Carole Hemingway

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