10th August 2021 - Bianca Ysabel

The Australian Consumer Law (ACL) intends to protect consumers while ensuring fair trading in Australia. It provides consumers with a comprehensive set of guarantees for the goods and services they purchase. Under the ACL, consumers have protection for their purchases and businesses have accountability and responsibility in respect to their supply to consumers.

WHAT ARE CONSUMER GUARANTEES?

Consumer guarantees are a set of rules that assure an acceptable quality of goods and services which entitles the consumer to compensation if these are not met. Compensation can either be a replacement, refund, or repair.

Consumer guarantees are automatically applied, regardless of the extension or expiration of the warranty given by a seller or manufacturer.

Compliance from businesses that sell goods or services is mandatory.

Manufacturers and importers are also mandated to comply with specific consumer guarantees.

CONSUMER GUARANTEES IN RELATION TO GOODS

ACL has nine (9) guarantees that apply to goods. It applies to all businesses, and in certain circumstances, manufacturers.

Businesses must guarantee that their goods:

• Are in an acceptable quality of goods when sold to a consumer. The goods must be impeccable in appearance, safe, and durable.
• Have an accurate description.
• Satisfy any express warranties.
• Fulfill all the purposes it intends to.
• Match any sample and description provided.
• Have a clear title, unless advised otherwise before the sale.
• Come with undisturbed possession that no one can take back or repossess the goods, except in certain circumstances.
• Free of any hidden securities or charges.
• Have spare parts and facilities for repair reasonably available for a reasonable time after the purchase.

Manufacturers must guarantee that their goods:

• Are in an acceptable quality of goods when sold to a consumer.
• Have an accurate description.
• Satisfy any manufacturer’s express warranties.
• Have spare parts and facilities for repair reasonably available for a reasonable time after the purchase.

CONSUMER GUARANTEES IN RELATION TO SERVICES

ACL laid out three (3) guarantees a supplier must meet the consumer guarantees of providing services:

• with due care and skill.
• which are fit for any specified purpose.
• within a reasonable time (when no time set).

A contract or a written agreement can covers the specifics of the services offered. Otherwise, the supplier must guarantee to supply the service within a reasonable amount of time. What is ‘reasonable’ may depend on the nature of the service.

FAILURE TO MEET ONE OR MORE GUARANTEES

Failure to meet one or more of the guarantees entitles the consumer to a remedy. For goods, it can be either be a refund, repair, or replacement. For services, a refund, further service to rectify the problem, and some circumstances form of compensation.

MINOR PROBLEMS

For goods and services, if the problem is minor, the supplier can choose a remedy.

However, if the supplier chose to repair it and takes an unreasonable amount of time, the consumer can approach someone else and ask the seller to pay reasonable costs. Rejecting the goods and asking for a full refund or compensation is an option too.

For services, a full refund is not immediate. The supplier must first be allowed to rectify the problem.

MAJOR PROBLEMS

For goods, if the problem is Major and unfixable. The consumer can either:

• Return the good and ask for a full refund or compensation or
• Maintain possession of the good and ask for a requital for its reduced value.

For services, if the problem is Major and unfixable. The consumer can:

• Terminate the contract for services and get a full refund or
• Request compensation for the difference between the value of the services provided compared to the price paid.

WHAT CONSTITUTES A MAJOR FAILURE?

A consequential failure in good and service when it:

• has a hidden problem that would otherwise prevent the sale.
• has unmatching description and demonstration.
• is unfit to fulfill its purpose and cannot be made fit in a sufficient amount of time.
• has multiple minor problems that would otherwise prevent the sale.
• doesn’t do what the consumer asked for and can’t be fixed in a reasonable amount of time.
• is unsafe.

Gift and voucher recipients are entitled to the same rights.

Sellers cannot refuse to provide a remedy even if the goods do not come with their original packaging.

Refusal to deal with the consumer and redirecting them to the manufacturer is also not allowed.

However, consumers are entitled to go to the manufacturer’s remedy if the goods are bought to them directly.

EXCEPTIONS TO THE CONSUMER GUARANTEES

You cannot rely on “buyers’ remorse” or simply changing your mind because you found the product is cheaper somewhere else.

ADDITIONAL INFORMATION

Customers can also seek compensation for the losses and damages resulting from failure to fulfill a guarantee by the supplier or manufacturer.

In the event of a manufacturing defect, the manufacturer must reimburse the seller. The reimbursement amount can include any compensation paid to the consumer for reasonably foreseeable consequential losses.

Signs that state ‘no refund’ is unlawful. It includes ‘no refund on sale items’ and ‘Exchange or credit note only for the return of sale items.

A business is always legally obliged to comply with a remedy if a consumer complained about a purchased good or service.

Key takeaways:

• The ACL protects consumers from unfair or unlawful trading practices.
• Guarantee fulfillment is mandatory for all businesses and manufacturers.
• Every consumer is entitled to a remedy if the seller or manufacturer fails to fulfill one or more guarantees.
• Consumer guarantee applies regardless of the warranty period.

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Bianca “Bianx” Ysabel, Digital Administrator

Contact W3IP Law on 1300 776 614 or 0451 951 528 for more information about any of our services or get in touch at law@w3iplaw.com.

Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.