A research
report on consumer protection in ecommerce

Business law

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Table of Contents
1.     Introduction. 4
1.1       Purpose of this research. 4
1.2       Research methodology. 4
. 4
2.     E-Commerce. 5
2.1       Legal aspects and legal issues of Ecommerce. 5
2.2       E-commerce and the Australian Consumer Law (ACL). 5
2.3       Consumer protection law.. 6
3      Consumer guarantee. 6
3.1       Acceptable quality s54 ACL. 7
3.2       Fit for purpose s55 ACL. 7
3.3       Goods must match their description and Sample s56 and
s57 ACL. 7
3.4       Warranties s59 ACL. 7
3.5       Repaired s58 ACL. 7
3.6       Right to title s51 ACL. 7
3.7       Remedies relating to the consumer guarantee. 8
4      Case example. 8
4.1       Rasell v Garden city Vinly and Carpet Centre Pte Ltd
1991. 8
3.1       Griffiths v peter Conway ltd (1939) 1 ALL ER 685. 8




Chapter 1

Sushila Guni Kattel (11701312)




With the advancement of technology, the
gaining popularity of internet shopping has changed significantly in the last
decade. Almost all the businesses are moving to e-commerce. Generally,
ecommerce is another way of doing business. Due to easy and convenient access
to the product and service number of consumer are attracted towards ecommerce. Internet is one of the key aspects
of E-commerce market. Business to consumers (B2C) online business, offers
Australian consumers and business substantial benefits. It added value to the
people who love to hunting online shopping. Consumers are able to purchase and
choose range of goods from different suppliers without any restriction of time
and distance whereas, also it is convenient access to the product particularly
in rural area. Online business creates opportunity to consumers to purchase
goods and service via internet wherever and whenever they are (Savantesson and
Clarke, 2010). However, it also presents some challenges for buyers that
different experienced from traditional stores, increased in number of
challenges have given priority to the need to adopt existing legal and
regulatory framework to the particular requirement of e commerce.


Purpose of this research


determine the consumer protection law in ecommerce business in relation to
business and consumer in Australia.


Research methodology


Here in
this paper, secondary sources of data have been carried out such as book,
journals, cases and website in order to accomplish the research purposes.








Over the last year, electronic commerce has change the
dramatic changes in business world. It has been a fundamental part of everyday life.
According to Priestley and Stretton (2001), electronic commerce refers as a
selling and buying of goods via internet/online. Furthermore, mentioned by Dave
and Steve (2005), E-commerce is exchanging information through electronic
device within an organization, between business to business, between business
to consumer and with many more other trade business and electronic business. Currently
e commerce has become very common among Australians, and continuity to grow

However, taking consideration of important factor, the
consumers experience is quite different from the traditional retail
environment. The factor that include the way they provide information, privacy
of personal information, consumer protection and their rights (Savantesson and
Clarke, 2010). As stated by the Australian bureau of statistics, 76 percent of
Australians made purchase over the internet in 2012-2013 According to the
survey conducted by Phillips, (2012), 94% of Australian accessing internet with
almost 80% are browsing online daily routine. Yet the online businesses are
providing a number of benefits to consumer but in other hand, online business
have been poor at building trust in e-commerce and many retailers fails to gain
trust (Xu and Quaddas, 2014). Therefore, many retailers are facing plentiful
challenges and issues regarding consumer protection and consumer guarantee in e
commerce. Any e-commerce business operating inside Australia and selling to
consumer will be subject to the regulation relation to online business.

Legal aspects and legal issues of Ecommerce


protection law


and privacy


business practice

and copy right

scram and fraud


E-commerce and the Australian Consumer Law


the last few years, Australian consumer are increasingly using and adapting new
technology to purchasing online goods and services (Taggart and Squire, 2016). As
discussed by (Latimer, 2014) consumer law has introduced due to the technology
revolution leading to greater consumable and non-consumable products. Further,
explained by Taggart and Squire, (2016. P.375), “E-commerce is subject to the
Competition and consumer Act 2010 (Cwlth) and therefore the ACL, unless the
conduct or contract in an overseas jurisdiction”. ACL, is an Australian’s
national law that gives equal rights to all Australian consumer, it exists as a
schedule 2 of the competition and consumer Act 2010 (Cth). It has replaced a
several territory law and state law and now all consumer and business law are
operating in single set of market rules (Latimer, 2011). According to the ACL,
it is said that consumer are those people who obtains, goods or services up to
$40,000, goods and services for personal, domestic and household use. Also, any
motor vehicles for use on public road (Latimer, 2014). Contrary to that,
persons are on consider as a consumer who acquires goods for the purpose of
trade and commerce (Taggart and Squire, 2016).




Consumer protection law


1970’s and 1980’s numerous changes occurred in mass consumerism many acts were
passed by the federal government to provide legislative consumer protection
including other acts like fair trading act and trade practice act (Latimer,
2014). While discussing about the law and legislation, ACCC is an independent
statutory body that is established in 1995 to administer the Trade Practices
Act 1974 and renamed the competition and consumer Act 2010 on 1 January 2011
(ACCC, 2018). The main focus of this law is to provide a certain protection and
assurances to the consumer (Sims, 2014). According to the Australian guideline
for electronic commerce 2006 which were created by the federal department of
treasury, consumer affair division to enhance to provide consumer protection in
E-commerce by emphasizing certain principles that how to dealt with consumer
when engaged in business to consumer in online business (Taggart and Squire,
2016). That includes


business practice

and security



with minors






to the e- consumer protection law requires that e-retailers need to provide the
sales process information about the technical steps to followed in order to
placed order (Savantesson
and Clarke, 2010), for
example information about the payment process, privacy and security, order
tracking system, delivery time and method, cancellation terms, return, exchange
and refund process (Ibid).

Consumer guarantee


guarantee is enforced by ACL in all consumer contract. The law mentions certain
guarantee that business must performed when they are selling goods or services
to buyers (Taggart and Squire, 2016). As under s64 it is illegal to attempt to
remove these guarantees.

to Savantesson and Clarke, (2010), ACL provides legal guarantee to the business
to consumer contracts that make sure that seller requires to provide the
appropriate information about goods, ensure that their good match their
description, are of acceptable quality, and fit for them disclose purpose
consumer guarantee.

applies to the Goods state by ACL, business needed to sell the goods and
service that must be of



Acceptable quality s54 ACL


section state that if the supplier sells the goods to the customer, guarantee
should be provided that the goods are of acceptable quality (Latimer,2014). If
not the customer can sue the business. According to ACL, Acceptable of quality
refers as the product should be safe, durable, fit for purpose for which goods
of that kind are commonly supplied, should match the information provided by
the supplier, free from any defect and should be durable (Taggart and Squire,
2016). However, durable is concern about the life of the goods that depends
upon the nature and purpose, price, packaging, labelling of the goods (Ibid).


3.2  Fit for purpose s55


this section, goods are supposed to be fit for disclosed purpose, the seller
who supply goods to a consumer there must be guarantee that they are reasonably
fit for any disclosed purpose and fit any purpose they are expected to fulfill.
They are certain conditions must be satisfied for this guarantee to apply: If
the consumer has disclosed the purpose of the goods they wanted for particular
purpose. If the buyer relied on the supplier skills or judgment. The buyer who
orders the goods must be under their patent or trademark name so that there is
no reliance of the skills and judgement of the seller (Taggart and Squire,


Goods must match their description and Sample
s56 and s57 ACL


must provide the accurate description of the goods to the consumer under s56
and the goods that consumer bought must match with the sample provided by the
supplier under s57. S57 guarantee applies actually the goods are not seen by
the customer and they rely on the product information. For instance, order the
goods from online catalogue or relying on packaging. Other hand, if consumer
purchased the goods by referencing to sample or demonstration model that must
be match with the product they bye that means product must be in same quality,
quantity, packaging or in the same condition (Lamiter,2014).


Warranties s59 ACL


to ACL, discussed by Latimer, (2014) when the supplier supplies the products to
consumer certain warranties are given or made in relation to those goods. A
warranty against defect promises, if something goes wrong with the goods either
repair the goods for free, replace the goods or replacement for defect goods.
However, to ascertain those warranty consumers must accept and read the
supplier terms and condition.


Repaired s58 ACL


ACL, consumer is guaranteed an opportunity to have their goods repaired.
However, it is applied until a reasonable time after purchase. Supplier must
guarantee that the repair parts are available for the product bought by the
consumer (Larimer, 2011).


Right to title s51 ACL


law state that the sellers have their rights to sell their products or
services, they must have full right of ownership of their goods in order to
sell to their consumer (Ibid). If any circumstances the seller have not the
full ownership or limited title they must make the consumer aware of this
(James, 2014).



Remedies relating to the consumer guarantee


in case of breach to a consumer guarantee a customer have legal rights under
ACL, against the supplier and there are certain remedies are provided under
section 260 and 261. if the goods purchased by the consumer and they are not
satisfied with the reasonable condition they can sue to the supplier or can
claim for compensation, refund, replacement, exchange or have the goods
repaired (ACCC, 2018).



Case example


Rasell v Garden city Vinly and Carpet Centre Pte
Ltd 1991


The case is about related to consumer
guarantee: Consumer “P” ordered a 100% pure wool finest carpet from supplier
“D” for domestic purpose worth of $1300, after few weeks he canceled the
contract under the equivalent ACL s259 for a consumer guarantee because the
carpet was not acceptable quality, the watermarks started appearing. According
to the consumer guarantee law the carpet was not acceptable quality under s54,
the carpet did not comply with the sample S57 hence seller did not comply with
the law Breach in relation to consumer guarantee (Latimer,2014). Here according
to the ACL, remedies should be provided to the consumer and consumer have right
to cancel or claim from the supplier (Latimer, 2014).



Griffiths v peter Conway ltd (1939) 1 ALL ER 685


case is about the consumer who is abnormally sensitive skin contacted
dermatitis (skin inflammation Eczema) from an overcoat. When she purchases the
coat from seller she didn’t mention or disclosed about her skin problem to the
seller. Here, in this case consumer are failed for breach of contract against
the seller due to not specified her disclosed purposed for buying the coat. She
didn’t make it clear to the seller. Under s55 of ACL, failure to disclosed
purpose hence seller doesn’t need to provide remedies (latimer, 2014).



order to provide assurance and guarantee Australian consumer law play an
important rule. Accordingly, supplier and both consumer have a certain legal
right to follow. The ACL provides the guarantee about the product and services they
bought. However, for consumer protection is not only about relating to product
and services. It is important that wherever whatever and however they buy the
product the consumers privacy and security must be maintains and their personal
data should not be misused.








Dan Svantesson and Roger Clarke. (2010)
“A best practice model for e-consumer protection” Computer law and
security review, 26 (1), 31-37.


Media Release 25 February 2014 http://www.abs.gov.au/ausstats/[email protected]/mediareleasesbyCatalogue/180CCDDCB50AFA02CA257522001A3F4B?Opendocument


the Australian consumer law, A framework overview july
2013, common wealth of Australia, http://consumerlaw.gov.au/files/2015/06/ACL_framework_overview.pdf

peacock, M, 2010 ed 1, PHP 5 e commerce Development,


PHP 5 e-commerce




Michael Peacock


Packt Publishing













James, N
2014, BUSINESS LAW 4E, Wiley, Melbourne. Available from: ProQuest Ebook
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