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QLD Australian Consumer Law Override Supply Contract Payment Terms?

Discussion in 'Commercial Law Forum' started by Will, 10 December 2014.

  1. Will

    Will Member

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    Hi,

    Under a current supply contract there are certain terms which state when the Supplier can invoice for products. The Supplier can invoice on delivery to the Principal. Payments terms are 20 days from receipt of a payment claim (invoice) unless the Principal disputes the claim.

    There is also another term with regards to acceptance. “Delivery is not acceptance”. The Principal has 14 days after the date of delivery to accept/reject the goods.

    My question under contract law is that if the Supplier delivers some goods to the Principal, but then a few days later is found to have some issues which are rectified within the agreed timeframe, does this affect when the Supplier can invoice for the goods? Or can the Supplier still invoice for the goods on delivery, regardless of whether the Principal accepts or not? I don’t know whether Australian Consumer Law would override this either.

    Thanks in advance,

    W
     
  2. Will

    Will Member

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    Hi,

    Under a current supply contract there are certain terms which state when the Supplier can invoice for products. The Supplier can invoice on delivery to the Principal. Payments terms are 20days from receipt of a payment claim (invoice) unless the Principal disputes the claim.

    There is also another term with regards to acceptance. “Delivery is not acceptance”. The Principal has 14 days after the date of delivery to accept/reject the goods.

    My question is that if the supplier delivers some goods to the Principal, but then a few days later is found to have some issues which are rectified within the agreed timeframe, does this affect when the Supplier can invoice for the goods? Or can the Supplier still invoice for the goods on delivery, regardless of whether the Principal accepts or not. I don’t know whether Australian Consumer law would override this either?

    Thanks in advance,

    W
     
  3. Rod

    Rod Well-Known Member

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    Are you buying the goods as a consumer or is this a business to business transaction?
     
  4. Will

    Will Member

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    Hi Rod,

    It's a business to business transaction
     
  5. Rod

    Rod Well-Known Member

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    My understanding of the ACL is that business to business transactions are not covered. People running a business are assumed to have enough nous not to need special protection.

    BTW, I could be wrong as I'm not a ACL expert and don't know if there are special exemptions for small business :)
     
  6. Rod

    Rod Well-Known Member

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    My take on your description is that the supplier can invoice on initial delivery and hold you to it as long as any issues are rectified in the 'agreed timeframe'. If issues are not rectified in the agreed timeframe you have a strong case for not paying on time as the supplier as failed to meet one of their key terms.

    Any dispute is more likely to be considered part of contract law.
     
  7. Will

    Will Member

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    Thanks Rod. This is what I thought
     
  8. Tim W

    Tim W Lawyer

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    In that case, I am fairly certain that these are not transactions to which the Australian Consumer Law applies.
     
    Amanda E likes this.
  9. DennisD

    DennisD Well-Known Member

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    My reckoning is a little different to other contributions so far on this thread.

    If we read the definition of 'consumer' in the ACL, we see the goods or services may but need not be 'of a kind ordinarily acquired for personal, domestic or household use' to be consumer goods (second limb of definition). Instead the goods or services may be consumer goods under the first limb of the definition, which is simply based on price, namely that 'the amount paid or payable for the goods or services did not exceed $40,000'. This first limb indeed can catch B2B transactions (which may be surprising to many people given the name 'australian consumer law'), so businesses need to be aware of rights/obligations under the ACL.

    So, first question Will, what is the amount paid or payable under the supply contract?
     
  10. Tim W

    Tim W Lawyer

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    @Hugh - Do people still rely on Carpet Call?
    Surely there is something more recent than that?
     

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