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Suppliers and manufacturers often make extra promises (sometimes called ‘express warranties’) about such things as the quality, state, condition, performance or characteristics of goods or services.
These promises are not necessarily about what will happen if the product or services fail but rather that the goods or services live up to the written promises made by the supplier.
When a consumer buys a deck chair, the supplier says the chair can hold up to 100 kilograms. This is an express warranty about what the goods can do.
If you provide an express warranty, you guarantee the goods will satisfy that warranty.
A supplier tells the consumer that a bed will last for 10 years. If the bed only lasts for six years, the consumer will be entitled to a remedy.
As a retailer or manufacturer, you may provide promises to consumers about what you will do if something goes wrong with a good or service. These promises are often referred to as voluntary warranties. Under the Australian Consumer Law (ACL), these are called ‘warranties against defects’.
A warranty against defects is an undertaking made at, or around, the time the goods or services are supplied. This promise is over and above the protections you have to provide to a consumer by law.
Examples of warranty against defects include, as a business you will:
It is important to remember a warranty against defects is provided in addition to consumer guarantees and does not limit or replace them. As an example, under the consumer guarantees provisions you also have an obligation to address product or service failures. You cannot avoid or ignore your obligations by referring consumers back to the manufacturer.
All documents ‘evidencing’ a warranty against defects must be presented in a certain way, and must include specific information to ensure that consumers understand the warranty and know how to make a claim.
A series of warranty against defects statements in different sizes have been produced for you to download and print.
A warranty against defects must be in a document that is transparent and concisely state:
Warranty documentation must include:
Providing the information above and attaching a warranty against defects statement for goods, services or goods and services, as additional information will help you comply with the mandatory text component of these regulations.
In addition to the requirements above, a document for the warranty against defects must include certain mandatory text to ensure consumers are aware that any warranty against defects operates in addition to consumer’s rights under the ACL.
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.
Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
You are also entitled to be compensated for any other reasonably foreseeable loss or damage.
If the failure does not amount to a major failure, you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract.
Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or a service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service.
A consumer purchases a motor vehicle which comes with a three year or 100,000km written warranty outlining what the manufacturer will do if there are certain problems with the vehicle. This is a warranty against defects and must comply with the requirements of the ACL.
A consumer hires a tiler to renovate his bathroom. The contract states the tiler will repair any tiles that become loose within five years of the tiling being carried out. This contract contains a written warranty against defects and the tiler must ensure the document complies with the requirements of the ACL.
Consumer Protection administers the ACL together with the ACCC and Australia's consumer protection regulators (the ACL Regulators). Until such a time as advice or guidance to the contrary is provided by the courts, the ACL Regulators take the position that both the manufacturer and supplier would need to ensure compliance with section 102 of the ACL. Consumer Protection suggests that you seek independent legal advice to assist you to comply with the ACL.
For further information about warranties against defects see the ACCC website. Failing to meet these criteria may lead to a maximum civil penalty of $50,000 for a body corporate and $10,000 for an individual.
Criminal penalties for the same amounts also apply.
Under the Australian Consumer Law, suppliers and manufactures guarantee goods will meet any express warranties made.
As outlined above, a warranty against defects differs from an express warranty:
However, a warranty against defects may contain an express warranty.
When a consumer buys a deck chair, the written warranty (the warranty against defects) states that the chair can hold up to 100 kilograms. This is an express warranty about what the goods can do. If the chair breaks after a person weighing 50 kilograms sits on it, the consumer can insist that the express warranty contained in the warranty against defects be honoured. If not, they will be entitled to a remedy.
An advertisement or a promotional brochure that simply mentions that a car comes with a ‘four year warranty’ does not give enough detail about the nature of the warranty to determine whether it is a warranty against defects or an express warranty.