Articles > Startups

eCommerce and Australian Consumer Law

February 17, 2021   Philip EvangelouPhillip Salakas

eCommerce sites and apps have to abide by the Australian Consumer Laws (ACL) when selling products or services online. The ACL is the primary piece of legislation that protects consumers within Australia, affording Australian consumers certain legal rights and holding businesses legally accountable to consumer guarantees.

All online retailers must meet the consumer guarantees and comply with the remedies in the ACL. The guarantees under the ACL apply to: 

  • Goods or services up to $40,000;
  • Goods or services over $40,000 typically purchased for domestic, household or personal purposes; nad 
  • Business vehicles and trailers used to transport goods.

What Must Be Guaranteed?

When a consumer purchases a product from your eCommerce store you must guarantee the following under the ACL: 

  • The quality of the product is acceptable, safe and without defects
  • It matches the description you make on your website and advertising campaigns
  • Comes with full ownership 
  • Is it fit for purpose as advertised
  • Carries no hidden securities or charges 
  • Meets any additional promises you make regarding performance, quality or condition 
  • Matches all sample and demonstration models
  • All your products and services must meet Australian safety regulations 
  • Your business gives automatic guarantees with the right to ask for a repair, replacement, refund, cancellation or compensation as appropriate if there is a problem

These are basic guarantees that all businesses in Australia need to comply with. If a business fails to meet its consumers guarantees, consumers have the right to seek remedies or to make a report with the ACCC (Australian Competition and Consumer Commission).

It is worth noting that you cannot contract out of any legal obligations listed in the ACL, meaning you cannot avoid these legal obligations under the ACL by having a contract in place that states otherwise. Keep in mind these guarantees are legally enforceable, this means you could be taken to court under the ACL for breaching any of the above obligations.

Consumer Rights

The ACL outlines certain remedies that are available to consumers. These are available in cases where businesses do not fulfil consumer guarantees. These remedies include: 

  • Repair or replacement 
  • Refund; or 
  • Compensation

These remedies are available for minor incidents, and major breaches of the ACL will be investigated by the ACCC.

What Should Be Included in My eCommerce Policy?

It is important that your eCommerce business has a specific eCommerce policy in place (often termed ‘terms of use’). This policy must be easily accessible by your customers and situated on your website. An eCommerce policy will usually stipulate the time frame for returns, conditions of returns, the type of refund offered (in store credit or funds), your shipping policy, the types of warranties offered on products, and the disclosure of any fees associated with returns.  

To Sum Up

  • The ACL is applicable to all online retailers and eCommerce businesses online
  • eCommerce businesses have a series of obligations that must be met under the ACL
  • You must provide an appropriate remedy in situations where you do not meet your obligations under the ACL

If you need help drafting your eCommerce policy get in touch with our start-up lawyers via the form on this page or calling us on 1300 337 997.

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.

About Phillip Salakas

Phillip SalakasPhillip is completing his law degree at the University of Technology (Sydney). He worked previously with Lawpath, and Justice Action. His interests are with construction and technology law.