Overview of Australian Consumer Law
Issue
- Whether Karen is liable to pay $100 to the gym for the termination of her membership
- Whether any provisions of the Australian Consumer Law been violated the Gym
- What remedies are available to Karen in this situation
- How misrepresentation which is a provisions of common law is applicable in this situation
Rule
Australian consumers are provided protection under the rules of the Australian Consumer Law which is a part of the Competition and Consumer Commission Act 2010 (Cth) schedule 2.
A consumer is a person who has indulged in the purchase or services or good for household or domestic use and the price paid by the person for should goods needs to be less than $40000.
The legislation deals with the rules in relation to a conduct of a misleading and deceptive nature. These rules have been discussed specifically through the provisions of s 18 of the Law. The application of this section makes it illegal for a person while in course of trade and commerce to get into an act which has a misleading and deceptive character or which is most likely to mislead and deceive.
The legislation prevents the inclusion of unfair terms in the contract through the application of s 23.under this section the legislation provides that a term in a consumer contract will not be valid in case it is an unfair term and the contract has been provided in a standard form.
Further s 23(2) defines a consumer contract as a contract in relation to supply of goods and services used for domestic and household purpose. The meaning of unfair has been discussed under s 24. A term will be unfair in a consumer contract where it creates a major imbalance between the obligations and rights of partiers which is created under the contract. The term is not necessarily and reasonably needed for the purpose of giving legitimate protection to the business. The terms may result in a disadvantage to the party if it is to be applied or relied upon.
Under s24 (2) in the determination of unfairness of a contractual term that court may analyze the content of the contract as a whole and the degree to which the term is clear. A transparent term must be expressed in plain language, presented clearly, legible and available readily.
Section 25 of the ACL provides examples as to what is considered as an unfair term. Under s 25(a) a term giving right to a party to avoid contractual performance is unfair. A term which allows a party to bring a contract to an end is unfair under s 25(b). A term which may have the effect of penalizing only one party for the breach of contract is an unfair term under s 25(c).
Misrepresentation and the Gym Contract
The meaning of a standard form of contract is provided under s 27. Under s 29 a person should not make a representation in relation to sale of goods and services which can be considered and misleading and deceptive.
Under common law misrepresentation rules if a party makes a false statement of fact and the other party which is relied upon to form a contract then misrepresentation takes place. These rules have been provided in the case of Derry v Peek [1889] UKHL 1. The courts may allow the innocent party to rescind the contract and also claim damages where the misrepresentation is of a fraudulent or negligent nature.
A common remedy which can be sought by the claimants for where they have suffered under s 18 is that provided in s236. Under this section it has been stated that the claimant has the right to recover loss or damages suffered due to the prohibited conduct.
Application
Karen is a consumer as she has obtained services for household purpose under s 3.
According to the facts of the situation it can be stated that the Gym has indulge in a breach of s 18 by the making the advertisement which includes the word unlimited access. It is illegal for a person while in course of trade and commerce to get into an act which has a misleading and deceptive character or which is most likely to mislead and deceive. This conduct of the gym is deceptive and misleading as after providing in the advertisement that they will provide unlimited access they are saying that it does not include all gym equipment.
Further there is term in the contract which states that the gym may terminate the membership of the member anytime they want. On the other hand they would charge a fee of $100 for the termination of contract by the member. This term would be an unfair term under s 23 of the ACL as the contract between Karen and the gym is a consumer contract, the contract in a standard form under the meaning of s 27 and the term is unfair under the meaning of s 24. The term is unfair because it creates a major imbalance between the obligations and rights of Karen and the Gym which is created under the contract.
The term is not necessarily and reasonably needed for the purpose of giving legitimate protection to the business of the Gym. The term will result in a disadvantage to the Karen if it is to be applied or relied upon. In addition under s 25 the examples of unfair term also support the fact that the term introduced by the gym is an under ter. This is because a term giving right to a party to avoid contractual performance is unfair and the gym seeks to avoid their contractual performance.
Analysis of the Unfair Term
A term which allows a party to bring a contract to an end is unfair as the gym seeks to have the right through the terms of the contract to bring the membership of a member to an end upon discretion. Further the term is unfair because it has the effect of penalizing only one party for the breach of contract as it seeks to impose penalty of $100 on the members only rather than the gym. Thus the court in this case would find this term in the contract to be void. However the contract will be valid if it can be continued without this term.
Under the provisions of misrepresentation discussed above, it can be stated that the Gym has been indulged in such actions. This is because the gym has made a false statement of fact that they would be providing unlimited access to the gym but are not allowing the use of all equipment. This statement of fact has induced Karen to get into the contract. The gym is ought to know that the term has been misrepresented to the consumers. Thus it is a fraudulent misrepresentation as previously also there were complaints regarding it.
In relation to the above discussed contraventions, Karen can make a claim under s 236 for any damages she has sustained and can rescind the contract. She can also do the same under common law provisions of misrepresentation.
Conclusion
Karen is not liable to pay $100 to the gym for the termination of her membership. Provisions of s 18, 23, 29 of the Australian Consumer Law been violated the Gym. Karen in this situation can rescind the contract and claim damages. Common law misrepresentation is applicable
Answer 1
The name of the island in relation to this case is Mer, which is also known as Murray Island, located in the Torres Strait. The name of the people who occupy this island are known as Aboriginals and Torres Strait islanders.
Answer 2
In relation to this case the people were allowed to live on the land, have access to it for traditional purpose, fish, hunt or gather traditional food, protect and visit important sites and places, teach the traditional laws. The foundation of native title would have disappeared when policies are made to discriminate against native people.
Answer 3
Native title is considered to be different from land title as under land title rights policies, indigenous people groups in Australia are provided a fee simple title or they can be provided with a lease given by the crown. Native title is considered to be the recognition of a thing which indigenous people groups in Australia already possess. These laws are present for the purpose of identifying, protecting and recognizing the title which is already present. In this case there is nothing granted by the crown as it does not belong to the crown to grant.
Answer 4
The Act which has been passed due to the decision of this case was Native Title Act in 1993. In this case it had been decided that Aboriginal and Torres Strait Islander have a unique connection with their land and the land cannot be taken from them by passing a law which has no place in the contemporary society.
Answer 5
The Yorta Yorta people continued from 1998 to 2002. In this case the submission made by The Yorta Yorta people had been rejected by both the trial and high court.
References
Competition and Consumer Commission Act 2010 (Cth)
Derry v Peek [1889] UKHL 1
Mabo and others v Queensland (No 2) (1992)
Yorta Yorta v Victoria [2002] HCA 58
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