Are you thinking of going into the business of importing and distributing goods manufactured offshore? Do you know what your duties are under the Australian Consumer Law (ACL), particularly where the manufacturer does not have an office in Australia? Have you got proper product liability insurance to cover this exposure? This article will explore the legal considerations for importers under the ACL.
Australian Consumer Law
In a nutshell, under the ACL, an importer or supplier is deemed a manufacturer in some situations. Therefore, they will face the same liability for any problems with the goods as the actual manufacturer. This is particularly in circumstances where, for example, you:
- cannot identify the actual manufacturer; or
- are the importer, and the manufacturer does not have a place of business in Australia.
Generally, as an importer, you are responsible for product safety and liability issues. Therefore, you may be exposed to claims by consumers. In some circumstances, the actual foreign manufacturer and the Australian importer/supplier can both be liable to consumers for breaches of the ACL.
Product Safety Under the ACL
You will be subject to the product safety provisions in the ACL if you sell (or import for sale) ‘consumer goods’. It does not matter to whom. Consumer goods are defined as things ‘intended for personal, domestic or household use or consumption or likely to be used for personal, domestic or household use or consumption’.
Additionally, under the ACL product safety provisions, the Australian Competition and Consumer Commission (ACCC) can:
- impose mandatory safety standards or information standards for consumer goods;
- ban consumer goods, either on a short term or permanent basis; and
- issue compulsory recall notices.
What Happens if I Do Not Comply?
If you do not comply with the product safety requirements, you could be:
- issued infringement notices by the ACCC;
- sued by the ACCC and required to pay monetary penalties; and
- subject to other court orders.
Additionally, a consumer could sue you if they have suffered loss or damage. This can include injuries, death or economic loss.
Continue reading this article below the formConsumer Guarantees Under the ACL
A major area of liability for both manufacturers and all suppliers (including importers) under the ACL is in the area of consumer guarantees. In essence, all goods and services that are sold, hired or leased in Australia to ‘consumers’ as defined in the ACL come with automatic guarantees that they will work and do what the customer asked for. Specifically, the guarantees are that:
- goods are of acceptable quality;
- goods will match any description provided; and
- any express warranties will be honoured.
You cannot exclude these guarantees in the terms of your contracts with your customers. The court will consider contracts that try to exclude these guarantees as void.
Definition of ‘consumer’
It is important to note that the ACL defines ‘consumer’ very broadly as any person (individual or company) who purchases goods or services that cost less than $100,000, for whatever purposes. Prior to 1 July 2021, a person (individual or company) who purchased goods or services that cost less than $40,000 was considered a ‘consumer’ under the ACL. This change has meant that more businesses will be subject to the consumer guarantees, and the provisions will catch more business to business transactions. Therefore, you should consider these changes and what they might mean for your business.
Remedies for Breaching Consumer Guarantees
If goods or services fail to meet the consumer guarantees, a consumer may have rights against you, and you may have to provide a remedy. The remedy may be a repair, replacement or refund and/or compensation for damages and loss. Therefore, as an importer, you should ensure that the goods you are importing meet the consumer guarantees.
However, if a consumer does have a claim against you as an importer for breach of a consumer guarantee, you may have a right to make an indemnity claim against the manufacturer under the ACL. A three-year limit applies to any such claim.
Key Takeaways
You must ensure that you understand what obligations your business has under the ACL as an importer. You can find further general information and guidance about the ACL on the ACCC website. Additionally, you can read the ACCC guide to the consumer guarantees. If you would like further advice on importers’ obligations or assistance navigating the minefield that is the ACL, contact LegalVision’s consumer lawyers on 1300 544 755 or fill out the form on this page.
Frequently Asked Questions
You will be subject to these provisions if you sell (or import for sale) ‘consumer goods’. It does not matter to whom. Consumer goods include things ‘intended for personal, domestic or household use or consumption or likely to be used for personal, domestic or household use or consumption’.
The ACL defines ‘consumer’ very broadly as any person (individual or company) who purchases goods or services that cost less than $100,000, for whatever purposes.
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