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Tuesday, 8 November 1977
Page: 3040


Mr FIFE (Farrer) (Minister for Business and Consumer Affairs) -in reply-The honourable member for Cowper (Mr Ian Robinson) has answered very clearly, very well and in a complete way the concern that has been expressed by the honourable member for Kingsford-Smith (Mr Lionel Bowen), on behalf of the Opposition, in regard to clause 5 of the Bill. I think I am right in saying that the honourable member for Kingsford-Smith has indicated general support for the rest of the measure that is before the House. However, because it is several days since I made my second reading speech on this subject, I think I should remind honourable members on both sides of the House that the Government, in arriving at its decision as expressed in clause 5 of this Bill, concluded that in the context of commercial dealings in commercial goods or services it is reasonable to allow, and I emphasise the word 'allow'- not to forceparties to a contract to negotiate their own arrangements regarding liability for consequential damages flowing from a breach of the contract.

Let me make it clear that the Trade Practices Act will continue to maintain a basic philosophy .that suppliers of goods or services should stand behind the quality and title of those goods or services in their dealings with business as well as with the public. Accordingly, the Bill does not allow liability for repair or replacement of faulty goods or services of for a breach of the undertakings in section 69 relating to title to be excluded. Further, the Bill does not allow relevant liability to be limited with total disregard to equity between the parties. The Government believes that the recent amendments to the law in the United Kingdom in this regard are appropriate to the Australian situation. Because of this a limitation of liability in a contract governed by the Trade Practices Act may be challenged on the ground that the limitation was not fair and reasonable between the parties.

The only other point that I wish to make is in regard to the fact that the honourable member for Kingsford-Smith singled out IBM Australia Ltd for criticism for the representations it made to the Government and, indeed, to the Opposition. I want to make it perfectly clear that representations were received from a large number of business organisations- not only from IBM- in regard to this matter and concern was expressed. It was because of this concern that the Government reviewed the definition of 'consumer' in the Trade Practices Act. Some time ago I made a public statement indicating that consideration was being given to amending the legislation in this regard. A large number of submissions were received not only from industry groups and commercial organisations but also from consumer groups. I am bound to say that, apart from the criticism levelled here today, I am not aware of any substantial criticism having been contained in the submissions I have received. In fact, I took the opportunity of discussing the matter with the Government's advisory group and, again, on that occasion there was general acceptance of the proposal that is now before the House.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.







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