legal Action Against Johnny under ACL and the Sort of Penalties

Question: Discuss about the legal Action Against Johnny under ACLand the Sort of Penalties. Answer: Facts Johnny has decided to add a new range of pasta dishes to the menu of his restaurant. In order to promote his idea, he placed a large signboard on the window of the restaurant stating his new pasta dishes as the best pasta in town which will be made with all the fresh ingredients. Another restaurant owner named Angel got annoyed due to sign as she had been serving pasta for years. She made accusations on Johnny of misleading the customers because it was in his knowledge that he was still using preserved olives for the purpose of making pasta dishes. To this, Johnny responded that despite using preserved olives from tin, he was still using them fresh from a tin. Angel threatened him of taking legal action under section 18 of Australian Consumer Law. Issue How should Angel bring a legal action against Johnny under ACL and will such an action likely to succeed and the sort of penalties on Johnny if he is found guilty of breaching the ConsumerLaw Guarantees. Relevant Laws and Applicability in Case The Australian ConsumerLaw (ACL) establishes consumer rights also known as consumer guarantees. These guarantees, in case of damages and loss, provide consumers rights to reimbursement/compensation, replacement, or repair. The customer also has right to cancel the services, if it is faulty. Section 18 of ACL for misleading or deceptive conduct states that a person must not get involved in such a conduct in trade and commerce that are misleading and deceptive or most probably mislead or deceive others(Australian Consumer Law, 2010). Such a kind of prohibition is not restricted to the supply of goods and services but holds broad and economy wide standards of the conduct. In this case, on one hand, Johnny put the sign claiming to serve the best pasta in the town made with fresh ingredients and on other side, he accepted that he was using tinned preserved olives for making pasta. Both the conditions were contradictory to each other and it was the misleading and deceptive conduct of Johnn y towards his consumer (Commonwealth of Australia , 2016). Under the ACL, when products and services are purchased, it automatically comes under the guarantee of their proper and desired function and if it fails to be in compliance with the law, consumer rights can be availed. Businesses are required to guarantee products and services sold, hired or leased by them both under and over the cost of $40000. In case business fails to fulfill the guarantees, consumer rights related to compensation, replacement, or repair, can be availed. Moreover, service can also be cancelled by the consumer and they can compensate for damages and loss (Clements, 2016). In this case, Johnny was clearly deceiving the consumers despite promoting his pasta on the guarantee of being made with fresh ingredients. Thus, his products were not under the compliance of consumer guarantee. Consumer guarantees on products require meeting the expectations of the consumers in accordance with the guarantee or the acceptable quality of products provided at the time of sale (Austr alian Capital Territory, 1992). In this sequence, the products are required to match with the descriptions made by the salesperson over packages, promotions, and advertisings. The food item which was being sold by Johnny did not meet the conditions mentioned for consumer guarantee on products and services (Australian Government Solicitor, 2011). Products are also required to match with the demonstration model or the sample which have been asked for and befit with the purpose of the business for which it had been required to be fit with and also for all the purposes that might have been known to the business before purchasing the products(Legislation, 2012). Furthermore, the products are also required to meet all the extra assurances made about the performance, condition and the quality of the products which also includes lifetime guarantees and the money back offers (Commonwealth of Australia, 2010). Claims of remedy can be made from the retailer, manufacturer or the importer if the goods or products do not meet the consumer guarantees of acceptable quality, matching the description as well as extra promises made regarding the performance, condition and quality. In case of failure with the compliance under consumer guarantees, the consumers are eligible reimbursement of costs from the manufacturer or the importer which inclu des an amount of the reduction in the value of products and in some situations, compensation for the damages or loss incurred to the consumers (Austlii, 2017). Thus, the food an item i.e. varying range of pasta which has been sold by Johnny does not meet the criteria as mentioned by Johnny during the promotion of his new range of pasta as he was using tinned olives as an ingredient for making pasta, he was required to compensate the consumers (Federal Register of Legislation, 2010). However, it was a fact that Johnny was liable to pay back or compensate the consumers but Angel was his competitor as she had been operating the restaurant next door to the restaurant of Johnny and was annoyed due to the promotion of a new range of pasta by Johnny. Johnny will not be held liable to pay compensation to Angel. If consumers want a claim, he will be required to pay back to the consumers under consumer guarantees of ACL (ACCC, 2017). The consumers, in case of failure of the products and services remain in compliance with the consumer guarantees, can ask the relevant business for the preference of free repair, replacement or refund as desired. In this case, consumers can only demand replacement or refunds as the issue with the product are major (ACCC, 2017). In the case of replacement, it is essential that the replaced products must be of a same type of the product which had been initially supplied to them. In the case of refund, it should be of the same amount as had been already paid to the consumer and as the original payment. It depends upon the business to take into consideration the time that had been passed after purchasing the product which include various factors such as the type of product, the type of utilization of the product, reasonable length of time up to which the product can be utilized as well as the type of its utilization that can be expected to be tolerated before the failure had become notic eable. All these factors can be taken into consideration by Johnny in case the demand for compensation from the consumers arises. The product or goods can be considered to be a major problem if the issue with them stops others from buying them in case they know about the problem. Moreover, if it can be considered as unsafe or is considerably dissimilar from the sample or description provided to the consumers by the retailers or the manufacturers, then it is considered as a major issue with the products or goods. If the products or goods do not match with the functions as ensured by the retailers or manufacturers to be served and the issue cannot be fixed as well. In this case also, the pasta dishes being served by Johnny to the consumers are provided with the assurance to be made with fresh ingredients, however, olives that are being used in the preparation of pasta are tinned and preserved (Common Wealth of Australia, 2017).. Thus, it has been an issue of clear misleading and deceiving the clients or the customers for which he will have to compensate or pay back to the customers. According to ACL, the retailers or the manufacturers who had sold products, goods or services to the consumers cannot refuse to help them by providing them with the costs in order to recover the damages. The costs being paid to the consumers must include the amount of reduction in the value of the products and in some cases if compensation for the purpose of damages or loss is required to be paid. One cannot demand repair, replacement, and refund from the manufacturer according to ACL. However, businesses cannot deny refunds by showing the signs of no refunds under any circumstances. The rights of consumers under consumer guarantees do not have a specific expiry date and can apply even after the expiry of any kind of warranties which had not been received by the business (ACCC, 2017). The consumers can seek compensation for the purpose of damages and loss suffered due to a problem with the products and services if the supplier could have already predicted the issue with the products and services. The compensation to the consumers includes the costs incurred by the consumers due to such a problem with the products, goods, and services. It usually includes financial costs but in some cases, it can also include other costs a well such as lost time or productivity. Suppliers do not have the authority to mislead the consumers regarding their rights to compensation just by stating that they are not responsible for any kind of losses which might have been suffered by the consumers during or after the use of products and services. Therefore, to conclude, Angel can take legal action against Johnny under ACL under section 18 i.e. under the misleading and deceptive conduct and for consumer guarantees as well. The action taken by Angel will most probably succeed because Johnny is involved in misleading and deceiving the consumers for which he will have to pay the compensation to the consumers. References ACCC. (2017). Compensation for damages loss. Retrieved from accc: https://www.accc.gov.au/consumers/consumer-rights-guarantees/compensation-for-damages-loss ACCC. (2017). Repair, replace, refund. Retrieved from accc: https://www.accc.gov.au/consumers/consumer-rights-guarantees/repair-replace-refund Austlii. (2017). Commonwealth Consolidated Acts. Retrieved from austlii: https://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html Australian Capital Territory. (1992). Fair Trading (Australian Consumer Law) Act 1992. Retrieved from legislation: https://www.legislation.act.gov.au/a/1992-72/current/pdf/1992-72.pdf Australian Consumer Law. (2010). Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010. Australian Consumer Law. Australian Government Solicitor. (2011). Australian Consumer Law. Retrieved from https://ags.gov.au: https://ags.gov.au/publications/fact-sheets/Fact_sheet_No_12.pdf Clements, G. (2016). Australian Consumer Law Review. Retrieved from cdn.tspace.gov.au: https://cdn.tspace.gov.au/uploads/sites/86/2016/03/ACLreview_issues_paper.pdf Common Wealth of Australia. (2017). Legislation. Retrieved from consumerlaw: https://consumerlaw.gov.au/the-australian-consumer-law/legislation/ Commonwealth of Australia . (2016). Consumer guarantees. Retrieved from tspace.gov.au: https://consumerlaw-staging.tspace.gov.au/files/2016/05/0553FT_ACL-guides_Guarantees_web.pdf Commonwealth of Australia. (2010). The Australian Consumer Law. Retrieved from publications.qld.gov.au: https://publications.qld.gov.au/dataset/1b96f0f9-1d84-44b4-9448-7d871dbd3b9d/resource/a9a1cc75-3b45-44fb-a08d-33d1e6ac7c10/download/aclguidetoprovisions.pdf Federal Register of Legislation. (2010). Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010. Retrieved from legislation: https://www.legislation.gov.au/Details/C2010A00103 Legislation. (2012). Australian Consumer Law and Fair Trading Act . Retrieved from legislation: https://www.legislation.vic.gov.au/Domino/Web_Notes/LDMS/PubStatbook.nsf/edfb620cf7503d1aca256da4001b08af/a7a06c0b33b7f723ca2579f80018c9f2/$FILE/12-021abookmarked.pdf