All the transactions between Australian businesses and consumers are governed by Australian Consumer Law. Whenever you purchase any goods and services, Suppliers and manufacturers automatically provide guarantees about certain goods they sell, hire or lease, and services they provide to consumers.

A consumer is a person who buys:

  • any type of goods or services costing up to $40,000 (or any other amount set by the ACL in future)
  • goods or services costing more than $40,000, which are normally used for personal, domestic or household purposes
  • a vehicle or trailer used mainly to transport goods on public roads irrespective of how much it cost.

 

Your entitlements as a consumer

  1. Guarantee as to title (s51), undisturbed possession (s52) and undisclosed securities (s53)

The goods sold to you must be free from any legal interests other than your ownership of the goods. For example, it is breach of the guarantee if you bought stolen goods which the original owner could still claim the ownership.

  1. Guarantee as to acceptable quality (s54)

You are guaranteed that goods are of an acceptable quality unless the suppliers drew your attention to any defects before you agree to purchase, or unless the goods are damaged by your fault such as abnormal use.

The ‘acceptable quality’ is satisfied if the goods are:

  1. Able to be used in all the ways in which that type of good is usually used; and
  2. Acceptable in appearance and finish; and
  3. Safe and free from defects; and
  4. Durable (long-lasting).

The standard of ‘acceptable quality’ will be varied according to the types of goods as it is absurd to expect that a $5 plastic table is judged by the same standard of $200 luxury wooden table.

  1. Guarantee as to fitness for any disclosed purpose etc (s55)

If you tell or make it obvious to a supplier that you are purchasing the goods to use the goods for particular purposes, the goods must be able to be utilized for the particular purposes disclosed to the supplier otherwise the supplier is in breach.

Similarly, if the supplier tells or makes it obvious to you that the goods are able to be used for certain purpose, the supplier guarantees that the goods will be capable of being used for that certain purpose.

  1. Guarantee relating to the supply of goods by description (s56)

Goods sold with a particular description must match that description.

 

 

  1. Guarantee relating to the supply of goods by sample or demonstration model (s57)

The quality and condition of the goods must be matched with the sample or demonstration model of that goods if you buy the goods by reference to a sample or demonstration model. For example, if you decided to buy a perfume based on the sample of the perfume displayed, you are entitled to have the perfume with same quality and condition.

  1. Guarantee as to repairs and spare parts (s58)

If the goods you bought require repairs or spare parts, the manufacturer of that goods must guarantee that the repairs and spare parts will be available for a reasonable period after you bought.

  1. Guarantee as to express warranties (s59)

If the manufacturer or supplier makes a promise regarding the goods such as a warranty will be last for 3 years, they are obliged to comply with that promise.

  1. Guarantee as to due care and skill (s60)

Whenever the service providers provide their service to you, they must do it with due care and skill. The standard of care and skill will be varied depending on the situations. For example, if you asked to repair your wheels of car to car repairperson and your car was messed up, you may be able to make a claim for compensation.

  1. Guarantee as to fitness for a particular purpose etc. (s61)

Same as paragraph 5, if you told the service provider about your purpose to buy the service, the service provider is obliged to reasonably serve your purpose.

  1. Guarantee as to reasonable time for supply of service (s62)

If you have arranged to have a service provided to you but have not specified when the service to be carried out, the service must be provided within a reasonable period.

 

Exceptions to Guarantees

The above guarantees do not apply in following circumstances, but not limited to:

  1. Changes of mind maybe because you do not like the goods or found the same goods at cheaper price on elsewhere.
  2. Misuse the product in a way that cause the problem.
  3. Any defects of the goods are already in your knowledge before you agreed to buy.
  4. Purchase goods or service from a private seller (eg: someone who does not usually sell things). For example, if you buy second-hand products via Gumtree or eBay, most of the consumer guarantees will not apply.

 

Possible remedies

  1. Replacement;
  2. Refund;
  3. Repair
  4. Compensation for consequential loss
  5. Compensation for any damages

 

For business owners, the consumers’ guarantees alternatively mean that they are your obligations. So, it is always recommended to consider such obligations when you operate your business.

 

If goods fail to meet a guarantee, a consumer will have rights against the supplier, and in some cases the manufacturer, who will have to provide a ‘remedy’—to put right a fault, deficiency or failure to meet an obligation. The consumer guarantees apply to both major (serious) and minor problems.

When the problem is minor, the supplier can choose between providing a repair or offering the consumer a replacement or a refund.

When there is a major failure, the consumer can:

  • reject the goods and choose a refund or a replacement; or
  • ask for compensation for any drop in value of the goods.

 

At Morrison Specter we protect your rights and interests whether you are a consumer or supplier. We explain and guide you with your entitlements.