The Trade Practices Act (Cth) "the TPA"

Contributed by Ian Macdonald and Su Mahalingham and current to 1 September 2005

The TPA was enacted in 1974. Because of the operation of the Australian Constitution, the Federal Government can only make laws with respect to certain subject matters (called heads of power). Every time it makes a law, it must “hang” the law upon one of those subject matters. If it can’t do that the law is invalid. The TPA is hung on the right of the Federal Government to make laws with respect to Corporations. The TPA is a law imposing obligations on corporations.

Therefore (although there are some minor exceptions) the consumer protection laws in the TPA apply to transactions between a consumer and a corporate business, being a business with “Ltd” or “Pty Ltd” after its title.

The TPA also requires that the transaction giving rise to rights against the business be between a corporation and a consumer. A consumer does not necessarily equate with the normal meaning of the word. Rather it is limited by definitions within the TPA (s.4 B).

A consumer for the purposes of the TPA is a person who acquires goods or services:

• if the price of the goods or services does not exceed $40,000; or
• where the price does exceed $40,000, the goods are of a kind ordinarily acquired for personal, domestic, or household use or consumption.

Additionally, the goods, whether they be under or over $40,000, must not be acquired for re-supply (in a business sense).

The Trade Practices Act applies to defined transactions between corporations and consumers. It covers not just sales to consumers (as in the Sale of Goods Act) but also where consumers have acquired goods by way of sale, exchange, lease, hire purchase, and hire.

The Trade Practices Act does not protect consumers who purchase by auction, nor does it cover private sales (that is, Sunday Times Readers Mart type sales). It does however impose obligations on the suppliers of services, unlike the Sale of Goods Act, which covers only goods.