Insights / July 10th, 2017

Recreational Services and Limiting Liability under the ACL

Consumer Guarantees

The Australian Consumer Law (“ACL”) provides consumers with guarantees on certain goods and services – these are called “consumer guarantees”. To abide by these consumer guarantees, a supplier must ensure its services are:

  • provided with due care and skill;

  • fit for the intended purpose; and

  • provided within a reasonable time (if no time has been set).

Under the ACL, suppliers are typically not able to modify or restrict a consumer’s right to these guarantees.

Exception for Recreational Services

In South Australia, an exception to the modification or exclusion of consumer guarantees is available for recreational service providers.

Under s 42 of the Fair Trading Act 1987, providers of recreational services can ask consumers that are 18 and over to sign a waiver agreeing that the consumer guarantees are excluded, restricted or modified. However, in order to utilise this exception, strict requirements must be met.

Requirements for Limiting Liability for Adult Consumers

Recreational service providers can only limit their liability in regards to adult consumers if they:

  • use the prescribed form (found in Schedule 1 of the Fair Trading Regulations 2010);

  • bring the form to the attention of the consumer and any third party consumer;

  • select only one option for excluding, restricting or modifying the consumer’s rights;

  • ask the consumer to sign and date the form;

  • have the form signed by a witness; and

  • give a copy of the signed form to the consumer (if requested) within 7 days.

In regard to the prescribed form, it is very important to use the exact wording as it appears in Schedule 1 of the Fair Trading Regulations 2010. The form does not have to be a standalone document and can be incorporated into a bigger document that outlines other Terms & Conditions; however, the wording of the prescribed form must not be altered.

What about Minors?

The ACL expressly provides that the consumer guarantees cannot be excluded where recreational services are provided to participants under the age of 18. This means you cannot ask a minor to exclude or modify its consumer guarantees and you cannot ask a parent/guardian to do it on their behalf.

It is an offence to attempt to exclude the consumer guarantees for minors. The maximum civil penalty for providing false and misleading information about the existence, exclusion or effect of the consumer guarantees is $1.1 million for a body corporate and $220,000 for an individual.

Practical Implications

If you are a recreational service provider, it is worth reviewing your Terms & Conditions to ensure that:

  • in relation to adult consumers - the requirements for limiting liability are satisfied; and/or

  • in relation to minors – no attempt is made to exclude the consumer guarantees.

Cowell Clarke has extensive experience in corporate transactions, due diligence and in contract drafting. Please contact Megan Jongebloed if you need your Terms & Conditions reviewed.

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