Consumer guarantees: what, who, how?

As a business, it’s important you’re aware of and comply with consumer guarantees under the Australian Consumer Law. Below we break down the what, who and how of consumer guarantees.

What are consumer guarantees?

Consumer guarantees provide consumers with a broad set of rights for the goods and services they buy. They give consumers assurance that when they buy a good or service, that good or service will work or do what it is meant to.

Consumer guarantees apply automatically and set out the conditions under which a business must provide a consumer with a remedy. Businesses must provide consumer guarantees irrespective of any other warranties they give.

Who is a consumer?

A consumer is a person or a business who buys:

• Goods or services that cost less than $40,000; or
• Goods or services that cost more than $40,000, ordinarily used for personal, domestic or household purposes; or
• A commercial vehicle or trailer used primarily to transport goods on public roads, regardless of how much it cost.

Who must comply with consumer guarantees?

Suppliers and manufacturers must comply with consumer guarantees for most goods they sell, hire or lease and services they supply.

A supplier includes anyone who sells, leases or hires goods or services in trade or commerce to a consumer. This can be a trader, retailer or service provider.

A manufacturer includes a person or a business that makes or puts goods together, or has their name or brand on goods. It also includes a person who imports goods into Australia, where the maker does not have an Australian office.

How do consumer guarantees apply to goods?

Suppliers and manufacturers must guarantee:

• Goods are of acceptable quality. For example, when sold to a consumer goods are of acceptable appearance and finish, do not have defects and are safe, durable and fit for all the purposes for which goods of that kind are commonly supplied;
• Goods match the description provided. For example, they are as described in advertising; and
• Express warranties are honoured. For example, any extra promises made about the quality, state, condition, performance or characteristics of goods are satisfied.

Suppliers must guarantee:

• Goods are reasonably fit for any purpose specified;
• Goods match any sample or demonstration model and any description provided;
• Goods have clear title, that is the supplier has the right to sell the goods, unless the consumer is alerted before the sale;
• Goods have undisturbed possession; and
• Goods don’t have any undisclosed or hidden securities, or any charges and will remain so, except in certain circumstances.

Manufacturers must guarantee:

• Availability of repairs and spare parts for goods, other than for auctioned goods.

How do consumer guarantees apply to services?

Suppliers must guarantee:

• Services are provided with due care and skill. Suppliers must use an acceptable level of skill or technical knowledge and take all necessary care to avoid any loss or damage when providing the services;
• Services are reasonably fit for any purpose specified by the consumer and any products resulting from the services are also fit for that purpose; and
• Services are provided within a reasonable time, when no time is specified.

How is a breach of consumer guarantees handled?

A breach happens when goods or services fail to meet a consumer guarantee, in which case a consumer is entitled to a remedy. Depending on the circumstances, and whether the problem is minor or major, consumers have the right of:

• Repair, replacement or refund;
• Cancelling a service or a further service; and/or
• Compensation for any consequential loss.

The Australian Consumer Law is technical and prescriptive. For more detailed information on consumer guarantees and meeting your obligations under the Australian Consumer Law, drop us an email today.