HOW CHANGES TO THE AUSTRALIAN CONSUMER LAW WILL BENEFIT SMALL BUSINESSES

The Australian Consumer Law (‘ACL’) provides both general and specific consumer protections across a range of conduct in commerce and transactions. They aim to protect consumers who acquire goods or services:

• That would ordinarily be acquired for, “personal, domestic or household use or consumption”; or
• That, “did not exceed $40,000”; or
• That are a, “vehicle or trailer acquired for use principally in the transport of goods on public roads”

As such, consumer protections have applied to goods or services that were bought for commercial purposes so long as the purchase price was less than $40,000.

On 1 July 2021, an amendment to the ACL will increase the cap on the value of goods and services to $100,000. This will counteract the effects of inflation as the current limit has not changed since 1986. As a result, the real value of the threshold has decreased and business purchases that used to be covered by the ACL are no longer.

Small Businesses will now benefit from many of their purchases being protected under the ACL with Consumer Affairs Australia and New Zealand naming industrial air-conditioning units, water tanks and commercial vehicles as examples of purchases by businesses that should be protected by the ACL.

WHAT DOES THIS MEAN FOR SMALL BUSINESSES?

Most purchases by Small businesses will attract protections outlined in the ACL such as:

• being fit for purpose
• Corresponding to the advertised description
• Acceptable appearance
• Restricting unsolicited
• Protected lay-by
• Regulation as to linked credit contracts

Whilst the proposed widening of the term ‘consumer’ extends protections to small businesses, contracts, agreements and policies will all need to be changed to align with the ACL and case law.

If you require advice regarding the new changes to the ACL and how it might affect your or your business, Straits Lawyers are here to help. We are now offering online services in both English and Chinese.