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Are you thinking of going into the business of importing and distributing goods manufactured offshore? Do you realise 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 products liability cover to cover this exposure?

Australian Consumer Law

In a nutshell, under the ACL, an importer is a deemed a manufacturer in some situations, and will face the same liability for problems with the goods as the actual manufacturer, particularly where, for example, the actual manufacturer cannot be identified, or you are the importer and the manufacturer does not have an office in Australia, or you hold yourself out to be the manufacturer.

Generally as an importer, you are responsible for product safety/liability issues and exposed to claims.

Product Safety, Consumer Guarantees and Liability under the ACL

For product safety/liability purposes, you are caught if you sell “consumer goods” – it does not matter to whom. These 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.”

Another whole 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. These guarantees cannot be excluded by you in the terms of your contracts with your customers. Importantly, these guarantees apply to all goods and services sold to “consumers”, not just “consumer goods” as defined above.

Some manufacturers, importers and suppliers make the mistake of assuming that because they are wholesaling to other businesses, that the consumer guarantees do not apply to them. It is important to note that “consumer” is defined very broadly in the ACL as any person (individual or company) who purchases goods or services that cost less than $40,000, for whatever purposes.

Goods and services that cost over $40,000 are only caught if they are of a type that are normally bought for personal or household use.

The ACCC guide to the consumer guarantees can be found here.

Conclusion

For further general information and guidance about the ACL generally the ACCC guides can be found here and the ACCC website.

Please let us know if we can assist you in guiding you through the minefield that is the ACL. Our lawyers are ready to assist, simply call us on 1300 544 755.

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