Lloyd's Maritime and Commercial Law Quarterly
CONTRACTS FOR THE SUPPLY OF SERVICES IN AUSTRALIA
The Australian Government, in February 1984, published a Green Paper setting out proposals for change to the Trade Practices Act 1974, which is a Commonwealth statute dealing among other things, in Part V, with consumer protection. There are many proposed changes to the Act as a whole, but one seemingly innocent and slight change to the present law will have a significant impact upon the transport, banking, finance and insurance industries as well as, possibly, upon professions such as accounting.
Section 74(1) of the present statute implies in contracts for the supply of services a number of warranties which, broadly stated, are: that the services will be rendered with due care and skill and that materials supplied will be reasonably fit for the purpose for which they are supplied; and, secondly, that, where the particular purpose or desired result is made known to the supplier of the services and the consumer reasonably relies on the supplier’s skill and judgment, the services and materials which are supplied must be reasonably fit for that purpose, or might be reasonably expected to achieve that result.
However, in the present s. 74(3), there is a restricted definition of services—restricted in comparison with the general definition of services which applies to the Act as a whole. Services are limited to three categories:
- (a) the construction, maintenance, repair, treatment, processing, cleaning or alteration of goods or of fixtures on land;
- (b) the alteration of the physical state of land; or
- (c) the transportation of goods otherwise than for the purposes of a business, trade’ profession or occupation carried on or engaged in by the person for whom the goods are transported.
In the case of (c), which deals with transportation of goods, there is an in-built exclusion for transportation which is not for the purpose of a business carried on by the person for whom the goods are transported. At present a carrier of goods can simply say that, in the main, transportation services are for a business purpose and, as a result, s. 74 has no application to such services.
The proposed amendment will delete sub-s. (3) of s. 74. There will need to be a contract for the supply by a corporation of services to a consumer. “Consumer” is defined so as to apply to the recipients of services priced at less than $15,000 (but under the proposed amendments to be increased to $200,000), or to the recipients of services ordinarily acquired for personal, domestic or household use or consumption. Most, if not all, transportation contracts would be supplied to persons for a price of less than $200,000.
In the result, transport contracts and contracts for the supply of services hitherto unaffected by s. 74 will become subject to the provisions of that section. In itself that may not be a very dramatic result in that, in many such contracts, warranties as to due
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