Consumer Guarantees and Warranties

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Consumer Guarantees

Under the Australian Consumer Law, products and services come with an automatic guarantee that they will work and are fit for purpose. Businesses must provide these automatic guarantees regardless of any other warranties that they provide to the buyer. Since 1 January 2011, the following consumer guarantees on products and services have applied:

For Products

They must be of acceptable quality, that is:

  • Safe, lasting, with no faults
  • Look acceptable
  • Do all the things someone would normally expect them to do

They must also:

  • Match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising
  • Match any demonstration model or sample
  • Be fit for the purpose the business indicated it would be fit for and any other purpose the buyer made know to the business before purchasing
  • Come with full title and ownership
  • Not carry any hidden debt or extra charges
  • Come with undisturbed possession, so no one has the right to take the goods away or prevent the buyer from using them
  • Meet any extra promises made about performance, condition and quality such as lifetime guarantees or money back offers
  • Have spare parts and repair facilities available for a reasonable time after purchase, unless the buyer is told otherwise

For Services

They must:

  • Be provided with acceptable care and skill or technical knowledge with all necessary steps taken to avoid loss and damage
  • Be fit for the purpose or give the results that were agreed to
  • Be delivered within a reasonable time when there is no agreed end date

Consumer guarantees on products and services also apply to:

  • Bundled products and services
  • Gifts with proof of purchase
  • Sales items
  • Online products and services bought from Australian Businesses
  • Second-hand products from businesses, taking into account age and condition

If a business fails to deliver any of these guarantees, the consumer has rights for:

  • Repair, replacement or refund
  • Cancelling a service
  • Compensation for damages or loss

Consumer Guarantees do not apply if:

  • The consumer misused a product in any way that caused the problem
  • The consumer changed their mind or saw the product cheaper elsewhere
  • The consumer knew of or was made aware of the faults before they bought the product
  • The consumer bought a one-off item from a private seller eg garage sale or fete
  • The consumer planned to on-sell or change the product to resupply it as a business

Warranties

Warranties are separate from the automatic consumer guarantee. They are a voluntary promise offered by the person or business that sold the product or service. Once the product or service is purchased, the promise becomes a right and can be enforced under the Australian Consumer Law (ACL).

Warranties against Defects

Warranties against defects are also known as manufacturers warranties. They are a representation made at or around the time that the goods are supplied, that if the goods (or part of them) are defective, the business will repair or replace the goods (or part of them), resupply or fix a problem with services (or part of them) or provide compensation to the consumer.

A warranty against defects is usually limited by time but once you provide a warranty against defects, you then must comply with that warranty.

A warranty against defects is provided in addition to the consumer guarantees and does not limit or replace the consumer guarantee. It can be in the form or a formal written document but can also be evidenced by any material with writing on it that contains such a promise, for example the wording on the packaging or label of the goods.

Under Regulation 90 of the Australian Consumer Law (ACL) there are certain requirements that must be stated in a warranty document including a section of mandatory text to ensure consumers are aware that any warranty against defects operates in addition to consumer rights under the ACL.

A warranty against defect must state:

  • What the business will do if the goods are faulty or defective (e.g. repair or replace)
  • What the consumer must do to be entitled to claim the warranty (e.g. cease using the good or contact the supplier)
  • Details about the business giving the warranty – name, business, address, telephone number, email address etc.
  • The warranty period (how long the warranty lasts for)
  • How to claim the warranty
  • Who is responsible for expenses associated with a warranty claim and how to claim back any expenses incurred
  • That the benefits provided by the warranty are in addition to other rights and remedies available under the law

The following mandatory text must be included in the 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.

Failure to comply with the law can result in monetary penalties of up to a maximum of $50,000 for corporations and $10,000 for individuals.  In addition, misleading representations may incur a maximum penalty of $1.1 million for corporations and $220,000 for individuals.

Master Electricians has prepared a proforma warranty document that members can access through the member’s resource portal on the website We recommend that before using this document, you seek independent legal advice to ensure that the proforma provided is suitable for your individual circumstances.

Please also note that the consumer guarantees and warranties outlined above relate to consumer transactions and do not apply to commercial work.

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