Table of Contents
Introduction
Every transaction in Australia is governed by legislation. The Sale of Goods Act (NSW) and the Australian Consumer Law (ACL) are key pieces of legislation that govern the buying and selling of goods in Australia. The Sale of Goods Act primarily regulates the contractual relationship between buyers and sellers, focusing on the conditions of sale and warranties. In contrast, the ACL, as part of the Competition and Consumer Act 2010, provides broader consumer protections, addressing issues such as unfair practices, misleading representations, and consumer guarantees. This article will explore both laws, highlighting their key provisions and outlining the main differences in scope and application.
The Australian Consumer Law (ACL)
The Australian Consumer Law (ACL) is a comprehensive regime to provide protection to consumers. The Australian Consumer Law is not a specific piece of legislation– it refers to the regulations set out under the Competition and Consumer Act 2010 (Cth) which is specific to consumer rights and protections. The Australian Consumer Law was a key recommendation of the Productivity Commission’s 2008 Review of Australia’s Consumer Policy Framework which recommended a single national consumer law. The ACL is a cooperative reform of the Australian Government and the States and Territories, through the Council of Australian Governments (COAG).
When Does It Apply?
The Australian Consumer Law applies to all consumers and businesses in Australia. The Australian Consumer Law provides specific protections, consumer guarantees and general protections within transactions.
Below is a table of the guarantees that are granted under the Australian Consumer Law:
Application to any sale of goods
| Section of ACL | Guarantee The Section Provides |
| Section 51 | The seller has the right to dispose of the goods. |
| Section 52 | The consumer will have undisturbed possession of the goods. |
| Section 53 | The goods are free from any undisclosed securities. |
Only applicable if supplied in trade or commerce and not via auction
| Section of ACL | Guarantee The Section Provides |
| Section 54 | The goods are of acceptable quality. |
| Section 55 | The goods are fit for purpose. |
| Section 56 | In the case of a sale of goods by description, the goods match their description. |
| Section 57 | Goods sold by sample or model correspond to the sample or model. |
| Section 58 | Manufacturer’s guarantee as to availability of repair fasciitis and spare parts. |
| Section 59 | Compliance with express warranties made by the supplier or manufacturer. |
Essentially, the Australian Consumer Law provides guarantees for consumers, as the table above shows.
Consumers have the right to ensure the goods they purchase are fit for the purpose which the good is expected to fulfil (Section 55) and that they have undisturbed possession of the goods (Section 53). The Australian Consumer Law exists to provide a clear, rigid and comprehensive list of rights consumers are entitled to when purchasing goods within Australia.
General Protections
The ACL provides specific protections as listed above, however the Australian Consumer Law also provides general and broader protections that essentially apply to all purchases within Australia.
The ACL also provides general protections such as:
- Unfair terms within consumer contracts (Section 23).
- Unconscionable conduct within the written contract (Section 20).
- Unconscionable conduct in connection with goods or services. (Section 21).
- Matters that the Court may have regard to for the purposes of section 21 (Section 22).
The ACL attempts to ensure fairness and equity for all consumers within Australia by ensuring, through both specific and general protections, that guarantees exist to avoid any unjust outcomes or situations when purchasing an item within Australia.
The Sale of Goods Act 1923 (NSW)
Unlike the ACL, The Sale of Goods Act 1923 (NSW) is specific to contracts of sale and transferring of ownership. The Sale of Goods Act is legislation that acts to protect parties in commercial transactions in NSW. Each state has its own version, so if you conduct business in multiple states, your duties will be different. Due to the Australian Consumer Law, the Sale of Goods Act primarily impacts business to business transactions. However, in some circumstances it still affects business to consumer transactions.
When Does It Apply?
The Sale of Goods Act 1923 (NSW) applies when a few criterion have been met.
Firstly, there must be a contract of sale.
Secondly, there must be a transfer of goods.
Thirdly, there must be monetary consideration (the goods are being sold for money).
The Sake of Goods Act 1923 is specific to the act of transferring goods to another person.
The ‘nemo dat’ Principle
The nemo dat principle refers to the latin phrase ‘Nemo dat quod non habet’, meaning ‘no one can give what they do not have’. In regards to the Sale of Goods Act 1923 (NSW), it essentially refers to the fact that sellers cannot sell goods if they do not have ownership (title) to it. If a good has been illegally sold to a manufacturer for example, the nemo dat principle has been broken as the original seller does not have title to it.
Implied Terms
The Sale of Goods Act also provides implied terms and remedies in regards to the transferring of ownership through property.
| Section of the Sale of Goods Act 1923 (NSW) | Implied Term Established |
| Section 18 | Establishes that there is an implied condition that the goods sold correspond to the description– that buyers should get goods of the same identity that they have bargained for. |
| Section 19(1) | Establishes that there is an implied term that the good sold is fit for the purpose which it has been created for. |
| Section 19(2) | Establishes that there is an implied term that the goods sold are of merchantable quality. |
| Section 20 | Establishes that there is an implied term that the goods, if sold by sample, correspond to the sample which has been provided. |
The Australian Consumer Law vs The Sale of Goods Act 1923 (NSW): What Is The Difference?
The Australian Consumer Law (ACL) and the Sale of Goods Act 1923 (NSW) serve different, though complementary, roles in regulating transactions in Australia. The ACL is a national framework that provides broad consumer protections and guarantees, such as ensuring goods are of acceptable quality, fit for purpose, and match their description. It applies to all transactions involving consumers, both in business-to-consumer and business-to-business contexts, with a focus on fairness and preventing misleading conduct. On the other hand, the Sale of Goods Act 1923 (NSW) is specific to the sale and transfer of goods in New South Wales, mainly regulating business-to-business transactions. It establishes implied terms, such as the goods must correspond to the description or be of merchantable quality, and follows the ‘nemo dat’ principle, meaning goods cannot be sold if the seller does not have ownership. While the ACL focuses on consumer protection, the Sale of Goods Act is more concerned with the legalities of commercial transactions.
Conclusion
In conclusion, while the Australian Consumer Law provides comprehensive consumer protections across all transactions, the Sale of Goods Act 1923 (NSW) focuses on regulating the sale and transfer of goods, primarily in business-to-business contexts, ensuring proper contractual obligations are met.
