Product liability essentially deals with unsafe goods as opposed to
unsatisfactory goods. Product Liability essentially rests with the manufacturer
of that particular product. The Trade Practices Act (TPA) creates a remedy for
innocent by-standers who suffer injury, loss or damage because of an unsafe
good. If the manufacturer supplies a product to the consumer and that consumer
re-supplies to another consumer it is the new consumer who has the remedy
available to them. No matter how many times goods are re-supplied the
manufacturer remains liable but the Plaintiff is whoever has title to the goods.
If you have suffered loss, damage or injury as a result defective goods you
may have rights against the seller of the goods in contract or against the
manufacturer of the goods in negligence. The Trade Practices Act (TPA) also
introduces a statutory code for dealing with defective goods.
There isn't a single source of law in relation to product liability in
Australia. Both State and Federal Parliament have powered to enact laws in this
area and they have done so. The three major sources of law in relation to
product liability are;
- A claim in negligence;
- A claim for damages for breach of express or implied terms in a contract;
- Claim for compensation against the manufacturer or importer for
unsatisfactory goods based on the provisions contained within the TPA.
The TPA deals with defective goods by providing a series of statutory rights
of action against the manufacturer, in favour of persons suffering injury, loss
or damage caused by the dangerous and or defective goods. The basis of liability
or the cause of action is that there is a defect in goods and a person suffers
injury as a result of that defect. There are many advantages of this type of
action. The main one being that there is no requirement that there be a
contractual relationship between the injured party and the manufacturer and
further negligence does not have to be proven.
This legislation gives persons who have suffered injury, loss or damage
caused by dangerous goods a right of action against manufacturers, importers and
suppliers. The act only applies to goods supplied after 9 July 1992.
To sue a manufacturer under the TPA the manufacturer has to be a corporation.
Importers are also caught by these provisions of the TPA.
If you do not know who the manufacturer of the goods is, it is possible to
serve a Written Request on the Supplier of the goods to provide information
about the manufacturer or the supplier who supplied the goods to them. If the
supplier does not provide the information requested this may result in them
being deemed the manufacturer for the purposes of the TPA.
WHEN WILL A CORPORATION BE LIABLE?
Manufacturers are liable when they supply goods which are defective and which
cause loss, damage or injury. A manufacturer of goods for the purposes of the
TPA and any product liability claim is given a wide meaning. A manufacturer
includes corporations who actually manufacture goods and those who hold
themselves as being manufacturers or permit their name to be applied to the
goods. If goods are imported and at the time of importation the manufacturer
does not have the right to do business in Australia the importer will be deemed
to be the manufacturer.
"Supply" includes sale, exchange, lease, hire or hire purchase.
"Goods" have a defect for the purposes of the TPA if their safety
is not such as persons are generally are entitled to expect. There are three
basic types or categories of defects applicable to unsafe or dangerous goods.
These categories are design, manufacturing and instructional. The legislation
sets out a number of factors which will be relevant in determining whether goods
have a defect, including, but not limited to:
- The manner in which and the purpose for which they have been marketed.
- Their packaging;
- The use of any mark in relation to them;
- And the instructions or warnings with respect to doing or refraining from
doing anything with or in relation to them;
- What might reasonably be expected to be done with or in relation to them;
- And the time when they were supplied by the manufacturer.
There are a number of defences available to the manufacturer of alleged
defective goods these include:
- The defect did not exist when the goods were supplied;
- The defect only existed because the manufacturer was complying with a
- The defect could not have been discovered given the state of scientific or
technical knowledge when the manufacturer supplied the goods.
- The defect is attributable to the design, markings, on, or instructions given
with goods where the manufacturer only manufactured a component.
If a manufacturer claims that the defect resulted from a compliance with a
mandatory standard, the Commonwealth becomes a defendant to the action and if
the defence by the manufacturer is proven the Commonwealth is required to meet
CAPACITY TO SUE
Who can sue under product liability law?
People who can sue under the product liability provisions of the TPA are
individuals who have suffered loss or injury due to defective goods, including;
- A person who has suffered injuries due to the defective goods;
- A person who has suffered loss because of injuries or death suffered by
another person because of the defective goods;
- A person who used or who intended to use goods which were damaged or
destroyed because of the defective goods.
- The goods must be of a kind that a ordinarily acquired for personal, domestic
or household use.
- A person who used or intended to use land, building or fixtures ordinarily
acquired for private use that were destroyed or damaged because of the defect.
The owner of the goods however needs to be a consumer as defined by the TPA.
A consumer for the purposes of Product Liability Law under the TPA is a person
(including a corporation) consumer in relation to particular goods if either;
- The goods are priced at $40,000.00 or less; or
- The goods priced in excess of $40,000.00 but are of a kind ordinarily
acquired for personal, domestic or household use or consumption, or, or in the
case of a vehicle the vehicle is acquired primarily for use in the transport of
goods on public roads and they are not purchased for either resale or using them
up or transforming them in business in the cause of the process of production or
manufacturer, or in the cause of repairing or treating other goods or repairing
or treating fixtures.
Time limitations for commencing actions
Certain time limitations apply when bringing an action in product liability
law. Ultimately an action must be commenced within 10 years of the supply by the
manufacturer of the goods.
Within that 10 year period however, your action must be commenced at any time
within three years after you become aware or ought to have become aware of the
defect and the identity of the manufacturer.
It is also important to note that in any action for a claim for personal
injuries arising out of defective goods, whether it be for breach of contract,
negligence and/or product liability, the action must be commenced within 3 years
of the date of the injury.
PROCEEDING WITH A CLAIM
What to do if you have a claim
If you have suffered loss, damage or injury as a result of a defect in goods
and think that you might have a potential claim against the supplier or the
manufacturer of those goods the most effective way to assist your claim is to
collect as much information as you can as quickly as you can.
Why approach the supplier or manufacturer?
If you want the defective goods replaced your first step is to approach the
supplier of the goods. Explain to them why the goods are defective and what you
would like them to do about it (i.e refund, replaced etc).
It is often more effective to put your concerns in writing and if you are
complaining about the defective goods. You should address your letter to
customer service or the General Manager, giving full details and setting a
deadline. If your claim involves a significant sum we recommend that you seek
legal advice before presenting a letter of demand to a supplier or manufacturer.
Do not send original documents such as receipts and guarantees. You should
always send copies instead.
You should keep copies of all letters along with any diary of effects and or
telephone conversations had with representatives of the supplier or
To make a complaint to a Government Body.
While it is possible to bring an action in the Federal Court for breaches of
the Federal Trade Practices Act very few cases are brought in the Federal Court
by or on behalf of consumers. It might be more useful to make a complaint to the
Australian Competition and Consumer Commission (ACCC) if you have a complaint
which is covered by the TPA.
The contact details of the Commission are :
500 Queen Street
Brisbane Qld 4001
Tel: (07) 3835 4666
The purpose of the TPA is to create a cause of action for the owner of the
goods against the manufacturer or importer.
There are a number of defences available to the manufacturer. These include
that there was no defect at the time of supply of the good, that they had met
the mandatory standard in that they had complied with any Australian Standard
applicable to that particular product.
This Information Outline is provided courtesy of Hall Payne Lawyers who are
experienced in this area of law. They are located at Level 9, 344 Queen Street,
Brisbane, QLD 4000 or call them on (07) 3221-2044 if you would like more
information on this legal topic, or you wish to obtain formal advice regarding
Hall Payne Lawyers are an established Queensland firm practicing in the areas
of employment law (unfair dismissal etc), accident compensation (WorkCover,
motor vehicle accident, personal injuries), anti-discrimination &
harassment, consumer law, family law, wills & estates, criminal law and
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