James owns a successful Brasserie and Coffee Shop in Main Street, Anytown. After

Question

James owns a successful Brasserie and Coffee Shop in Main Street, Anytown. After a number of thefts in the area, he contacted SecureAll Ltd, a security company to recommend to him a commercial security system, to prevent and deter thieves and to provide a level of security for his business, which he had not previously had. After inspecting James’ premises, SecureAll Ltd recommended the supply and installation of a security alarm system (monitored back to base) called ‘Peace of Mind’, manufactured by All Round Security Ltd. The contract price was $38,000. There was a written contract signed by James and SecureAll Ltd which did not, however, contain any written warranty as to fitness of the security system for the function it was to fulfil. After several months of operation, the system did not live up to expectations. A number of service calls were made to SecureAll Ltd to remedy recurring defects (during which the system was off line) and the back to base monitoring frequently did not work. One night, thieves broke into James’ premises, easily disabling the system and stealing plant and equipment valued at $60,000. When considering his options, James was told by another business owner in the area that the ‘Peace of Mind’ system was ‘a lemon’.

Required

What rights (if any) does James have against SecureAll Ltd and/or All Round Security Ltd for breach of any of the consumer guarantees under the Australian Consumer Law.

Explanation / Answer

GUARANTEE UNDER AUSTRALIAN CONSUMER LAW:

Under the Australian Consumer Law, when you buy products and services they come with automatic guarantees that they will work . If you buy something that isn't right or have failed to solve the purpose, you have consumer rights. you can claim the damages from the seller.

What happens if these guarantees are not met?

If a good or service fails to meet a guarantee, a consumer has rights against the supplier, and in some cases the manufacturer, who will have to provide a ‘remedy’ in order to compensate for the consumer's loss.

If a supplier fails to meet a guarantee, the remedy may be:

a repair, replacement or refund
cancellation of a service
compensation for damages and loss.

If a manufacturer fails to meet a guarantee the consumer is entitled to recover damages, and in some circumstances additional damages for reasonably foreseeable consequential loss.Consumer protection agencies may take action on behalf of the consumers when a supplier fails to meet their obligations under the consumer guarantees.

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