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Implied warranties

The Fair Trading Act (Australian Consumer Law) creates ‘implied warranties’.

An implied warranty does not need to be written down in the contract. It is 'implied' by law.

Implied warranties are ordinary contract terms that are automatically added into any contract between a seller and a buyer - regardless of whether the seller and buyer actually agree on the term. They impose minimum standards of quality on dealers and manufacturers.

They make sure that consumers who buy seriously defective vehicles can go back to the manufacturer or dealer and have the defect fixed regardless of whether they were given a written warranty.

In most circumstances, theses warranties are imposed equally on dealers and manufacturers and apply regardless of what manufacturers’ state in their written warranties.

Implied warranties also apply to second-hand vehicles, but in this case any claim will be against the dealer only. An implied warranty will not apply to defects shown to the buyer before the sale.

Implied warranties require vehicles sold to:

  1. Be of acceptable quality;
  2. Be fit for the purpose for which they were acquired;
  3. Correspond to any description attached to the goods prior to the sale; and
  4. Correspond to any sample of the goods that was offered to the consumer prior to the sale.

The main warranties are those guaranteeing the acceptable quality of the goods, and their fitness for purpose.

A used vehicle is of 'acceptable quality' if for a reasonable period after purchase you can drive it from A to B in reasonable safety.

For a new vehicle to be of acceptable quality it should be free from manufacturing defects for a reasonable period.

If a vehicle is not of acceptable quality, you can request that it be repaired, replaced or can ask for a refund.

If you buy a vehicle, planning to use it for a particular purpose, you should tell the seller about the intended use. If you do this and it turns out that you cannot use the goods in the way you intended, you can enforce the implied warranty of 'fitness for purpose'.