Australian Consumer Law: Warranty Against Defects

Australian Consumer Law: Warranty against defects and the mandatory statement to be provided to consumers

Are you a service business and do you guarantee that if the goods or services your supply are defective you will repair or replace the goods, provide again or rectify the services, or compensate the consumer? If so, from 9 June 2019 you will be required to include, in all documents containing your warranty such as your terms and conditions, marketing material, receipts, product packaging or consumer contracts (Warranty Document), one of the following statements which best suits your business:

Existing Requirements

Even if you only supply goods to consumers you are required to provide the following statement to your consumers in a Warranty Document:

Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

Businesses that do not comply with the requirements of the Australian Consumer Law risk fines of up to $50,000 for companies and $10,000 for individuals per breach. Given the upcoming changes it is a timely reminder that you should ensure that your warranties should be documented:

1.       transparently;

2.       to concisely note:

a.       what the consumer must do to claim the warranty

b.       what you will do to honour your warranty;

c.       who will bear the expenses of the warranty and if relevant how the consumer can claim such expenses from your business;

3.       to prominently state your business’ name, address, telephone number and email address;

4.       to clearly state the length of the warranty and the time frame in which a consumer may claim the warranty.

Exceptions

Businesses are not required to display the mandatory statements noted above in relation to:

  • the transportation or storage of goods for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored;
  • services supplied under a contract of insurance; or
  • supplies of gas, electricity or a telecommunications service.

In addition to the exceptions noted above, Parliament may amend the Competition and Consumer Regulations 2010 (Cth) to exclude the supply of certain goods from the operation of the Consumer guarantees in the Australian Consumer Law; however, as at the date of this article no additional exceptions have been provided.

If you would like us to prepare new terms and conditions for you or review your existing warranties, or if you would like to obtain further advice in respect of the Australian Consumer Law please don’t hesitate to contact us.

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June 24, 2022 |

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