Returning, Replacing or Repairing Consumer Goods

Purchasing clothes, electronics, furniture and other household products are a daily occurrence for most people, but many of us have no idea about what to do in the event that something goes wrong and we want a product repaired, returned or replaced. The Australian Consumer Law provides many protections to consumers who purchase products that are under $40,000. The aim of this article is to inform you of your rights - in case you ever find yourself needing to return, repair or replace a product you have purchased.

When you may request a return, replacement or repair.

It is often the case that you will purchase a product and take it home only to realise that:

-        it is damaged;

-        it is not the same as the display model;

-        it is poor quality;

-        it doesn’t do what the salesperson said it would;

-        you have changed your mind and don’t want it any more;

-        you have found it cheaper somewhere else. 

In which of these situations may you repair, replace or refund the product?

Major or Minor Faults

Generally, a product may only be repaired, replaced or refunded in the event that it has either a major or a minor fault. Depending on whether a fault in the product is determined to be major or minor, both you and the seller of the product have different actions that you may take.

 A major fault is found if:

-        it would render the product unsafe;

-        it would have stopped you buying the product in the first place;

-        the product significantly differs from the description;

-        the product doesn’t do what the packaging/salesperson said it would.  

If the product is subject to a major fault, then you may decide to:

-        return the product and receive a full refund; or

-        keep the product, and receive compensation for the difference in the value; or

-        replace the product.

If the product is subject to a minor fault, the seller may choose to repair the product rather than replace or refund it.

If you are told you must have a receipt to return, replace or repair the product.

Many stores will attempt to stop you returning, replacing or repairing an item if you do not have the receipt from the original purchase. While it always a good idea to store your receipts in case you find yourself in a situation such as this, presentation of any proof of purchase will be sufficient to show you are entitled to a return, replacement or repair. Some alternatives to a receipt include:

-        a credit/debit card statement;

-        a photograph of the receipt;

-        a barcode that is linked with the sellers sales records;

-        an alternative reference number (eg. one received when making an internet payment).

If you are told products on sale may not be returned, replaced or repaired.

Sellers often state that products on sale are exempt from any returns, replacements or repairs. Regardless of store policy (eg, a sign that states ‘no returns on sale items’), the law makes no differentiation between products that are on sale and those that are not. Accordingly, you are entitled to a return, replacement or repair under the same conditions as above even if you purchased the product on sale.

When you may not request a return, replace or repair.

There are certain situations in which you may not request a return, replacement or repair.  These include:

-        If you have simply changed your mind and no longer want the product.

-        If you have found the product cheaper somewhere else.

-        If you knew (or were told) of the faults in the product when you purchased it.

-        If you misused the product.

-        If you purchased the item at an auction.

-        If you purchased the item at a private sale (eg, a garage sale).

Remember, businesses are legally obliged to provide an appropriate remedy in the circumstance that the product contains a major or minor fault. If they refuse to do so, you may report the business to the ACCC, or alternatively get in contact with us on 03 8877 6888.

Disclaimer: This article contains general information only and is not intended to be a substitute for legal advice.

Update on police powers in Victoria

It has been two months since Victoria Police used its “special powers” to search members of the public for illegal weapons in the south-eastern suburb of Dandenong. In light of such powers, the aim of this article is to take you through the recent increase in police powers and some of the rights you have at law.

Power to ask for your personal information

The police have a general power to ask for your name and address.

There are a number of reasons that empower police to ask for this information, such as:

• when you are believed to have committed a crime;
• about to break the law;
• stopped over for a breath test;
• you have witnessed a crime; or
• the police believe you are carrying an illegal weapon.

Unless the police have a reason, a person can choose not to give his or her personal details. In any case, the police should tell you why they require your details and once that reason is provided you must comply with the request.

Power to question you

You are either a witness or a suspect at this stage. If you are a witness and refuse to provide information in certain circumstances, you can be charged by the police. Accordingly, your right to silence does not apply in all situations and you should ask to speak with a lawyer if you are unsure about police questioning. You would also want to know whether the police consider you to be a suspect and whether your rights have been read to you at that stage.

Power to search you, without a warrant too!

So you walk into a public place such as a train station or a shop and the police approach you. You are informed that the police will conduct a frisk or pat-down search immediately. The first question that comes to mind is “Can I object?”

In such situations, the answer depends on a variety of factors including whether:

• the public place is located in a ‘designated area’
• the police reasonably suspect that you have illegal drugs, an illegal weapon or an item that can explode or ignite;
• you are in a public place where crime usually happens.

The lesson to be learnt from the above example is that the police now have much broader powers. Such powers can even extend to searches of your vehicle, even when you are not in it.

The effect of the powers on you

In light of the above powers, the need for a warrant has become less significant. While this does not mean you do not have any rights at law, the main message is that you must be a lot more alert and vigilant. Accordingly, if you approached or questioned by the police and you are unsure what to do, ask to speak with a lawyer.

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

Buying property in Victoria?

The tips, traps and legal risks – Part Two

The moderating housing market in Melbourne has provided positive news for buyers. But unlike other industries, the housing market can also be quite volatile. Part two of this article focuses on some of the traps and legal risks associated with buying property.

1.    Contract of sale

Buyers must understand the ‘particulars of sale’ and ‘general conditions’ in any contract of sale. In Victoria, the prescribed standard contract used by agents and lawyers is the “Contract of Sale of Real Estate” issued pursuant to the Estate Agents (Contracts) Regulations 2008. While the seller can use a different form of contract to effect the sale, this must be prepared by a solicitor or licensed conveyancer. The real challenge for buyers is when they are faced with a contract that significantly alters their legal rights, either by way of amendment to the general conditions or by way of overriding “special conditions”.

2.    Special conditions

A solicitor or agent may add additional clauses to go into the contract — known as “special conditions”. While ‘special conditions’ are a common feature in today’s housing market, they are usually requested implemented by the seller. Accordingly, special conditions should not be read lightly and a professional must be retained to interpret such conditions. There are several cases where the Court has found special conditions relating to deposits, completion, time and notice to be void with the consequence of incurring a penalty.

3.    Inspect! Inspect! Inspect!

Buyers must consider whether they need to undertake any pre-contract searches and enquiries and arrange for inspections. Particularly when the sale occurs by way of auction, buyers continuously downplay the importance of pre-contract and pre-settlement inspections. The unfortunate result is that a building defect may be discovered following completion of the contract and, in the absence of a legal warranty, the implications can be quite significant. Some of the overlooked inspections include: building and pest inspections, sewerage and drainage, zoning and reports on landslips.

4.    Read first, sign second

Purchasing property is one of the greatest financial decisions and buyers should ensure that they understand their rights and obligations under the contract. Buyers should also be careful in relying on verbal statements and signing documents based on something they have not read. Buyers should request all representations to be made in writing and if something requires an explanation, professional advice should be sought. For more information, see our article on false statements and promises here.

5.    Buying off the plan

Buying off the plan entails a significant land tax concession in addition to the other grants a buyer may receive from the State Revenue Office. However, there is a great risk that you may end up with a property that is different to the plan, the artist’s impression or the advertising material. Accordingly, it is important that you receive the right legal advice when you buy off the plan, particularly when a firm completion date has not been provided.

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

False statements, promises and negligence – Be smart and alert!

Have you been in a situation where you have you lost your money as a result of your reliance on a promise? You may have relied on a verbal statement made by another person or misled into entering a contract? This is where the law of negligence comes into play. 

The law of negligence concerns the failure of a person to take reasonable care over something. It is a broad area of law and there are countless examples where companies, organisations, individuals have been held to be negligent. Although many of the examples involve a certain degree of damage, what happens in a situation where the loss you suffer is purely monetary?

You may have suffered a considerable amount of money just because a party had been reckless in the information they provided to you. Such information can take the form of advice, market statistics or even online newsfeeds. One example that comes to mind is an investor’s reliance on the opinion of a financial institution regarding the financial viability of a product or a statement made by a person who possesses expert knowledge.

It is important that you obtain legal advice before relying and acting on such information. It becomes more important when a significant portion of your equity is at stake and you have clearly relied on the false information.

You must also consider whether you relied on a statement made by a person with the required skill and knowledge. That statement may be a general statement or made by a person who does not have the required skill and knowledge. At that stage, you may have no action against that person and carry the risk of being sued.

In the majority of cases, you must demonstrate that you have suffered an economic loss as a result of the false, statement or promise made by the person. It is essential that you obtain legal advice before commencing any sort of action because without loss, you cannot ask to be reimbursed for anything. For example, you may have relied on a false statement made by a builder in relation to the construction of a set of units. In this example, it must be demonstrated that the builder’s false statement was the cause of your monetary loss.

Even if you have suffered an economic loss as a result of false statement or promise, you will need to provide evidence of the loss and its connection to the false statement or promise. Usually clients that suffer a loss are those clients that do not consult a lawyer at the outset of the transaction.

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

Buying property in Victoria?

The tips, traps and legal risks – Part One

Buying property in Victoria can be a complicated process. In addition to the personal and commercial considerations, buyers must be aware of their rights and obligations. Part one of this fact sheet focuses on the buyer’s right to information, entitlements and tax implications.

1.    Vendor’s Statement

Before signing the sale of contract, the vendor must provide you with a statement of matters affecting land pursuant to section 32 of the Sale of Land Act 1962. This is known as a ‘vendor’s statement’ and the purchaser's solicitor should check this against any mortgages over the property, covenants, easements, local council zoning restrictions and other important information. Failure of the seller to provide this statement can result in rescission of the contract depending on the legal implications of the failure to comply.

2.    Due Diligence Checklist

Prospective purchasers must be aware of the ‘Due Diligence Checklist’. A copy of the ‘Due Diligence Checklist’ can be found on the Consumer Affairs Victoria website and is an important document that purchasers must consider before buying property. According to the checklist, many people engage a lawyer to help them understand the contract and ensure the sale goes through correctly.

3.    Right to rescind the contract

As the purchaser, you have a right to rescind the contract of sale in a number of situations. For example, where the seller provides you with false information. At the same time, the right to rescind does not apply if a court finds that the seller acted honestly and reasonably. In our experience, buyers assume a right to rescission for simple breach of contract which is a dangerous assumption to make without proper legal advice.

4.    Stamp duty

Purchasers of residential property must be aware of the land transfer duty (stamp duty) and the recent changes in this area. It is also important that the stamp duty figures and applicable concessions are correct to prevent costly drafting mistakes. For instance, any foreign residents wanting to buy property in Victoria must pay an additional stamp duty surcharge of 3 per cent. This applies to any contract of sale entered on or after 1 July 2015. Foreign purchasers must also take into account any fees imposed by the Federal Government to assess applications for foreign nationals to invest in the Australian residential property.

5.    Land tax

Purchasers of commercial or investment properties over the $250,000 mark must pay land tax. From 1 January 2016, Victorian land that belongs to an owner that does not ordinarily reside in Australia will incur a 0.5 per cent land tax. This tax applies to individuals, corporations and absentee trusts. Owners that pay land tax, must also lodge a notice of acquisition. While these requirements may seem straightforward, any mistake or failure to comply results in hefty costs and possibly fines down the track. Therefore, it is important that purchasers obtain proper legal advice when considering investment or commercial property.

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.