From 1 January 2011 all suppliers and manufacturers of goods and services in Australia must comply with the Competition and Consumer Act 2010 also known as The Australian Consumer Law.
Consumer guarantees provide consumers with a comprehensive set of rights for the goods and services they acquire after 1 January 2011 and are based on the same core principles as implied warranties and conditions that previously existed in state and territory fair trading laws and the Trade Practices Act 1974. This also includes goods and services received as gifts. Goods and services purchased up to 31 December 2010 are covered by the implied warranties and conditions in state and territory fair trading laws and the Trade Practices Act 1974.
Who is a supplier?
A supplier is anyone who, in trade or commerce, sells goods or services to a consumer. This includes traders, retailers and service providers.
Who is a manufacturer?
A manufacturer is a person or business that makes or puts goods together or has their name on the goods. This includes the importer, if the maker does not have an office in Australia.
Which goods ARE covered
Which goods ARE NOT covered
Goods sold in trade or commerce* and bought by a consumer including second-hand, leased or hire goods on or after 1 January 2011
goods bought before 1 January 2011. These are covered by statutory implied conditions and warranties under the Trade Practices Act 1974 and any state or territory legislation in force prior to 1 January 2011.
any type of goods or services up to $40,000 (or any future amount set by the ACL)
goods bought from one-off sales by private sellers, eg garage sales and fairs
a vehicle or trailer used mainly to transport goods (Note cost is irrelevant)
goods bought at auctions where the auctioneer acts as agent for the owner
goods costing more than $40,000 which are normally used for personal, domestic or household purposes
goods costing more than $40,000 bought normally for business use, eg, farm equipment
goods a person buys to on-sell or re-supply
goods a person wants to use as part of a business to manufacture, produce, repair or otherwise use on goods or fixtures
* Trade or commerce means in the course of a supplier's or manufacturer's business or professional activity including non-profit business or activity.
The nine guarantees that apply to goods are:
goods are of acceptable quality
goods are fit for any purpose specified
description of goods is accurate
goods will match any sample or demonstration model and description provided
goods will satisfy any extra promises made (express warranties)
goods have clear title unless the consumer was advised prior to the sale they had 'limited title'.
no one will try to repossess or take back goods or prevent the consumer using the goods except in certain circumstances
goods are free of any hidden securities or charges and will remain so except in certain circumstances
manufacturers or importers guarantee they will take reasonable steps to provide spare parts and repair facilities for a reasonable period of time.
The consumer guarantee acceptable quality does not apply when:
abnormally (refer to page 14 of the guide for examples of 'abnormal')
causes the quality of the goods to become unacceptable
fails to take reasonable steps to avoid the quality becoming unacceptable
The consumer guarantee fit for the specified purpose does not apply when:
The consumer guarantees match description and match sample or demonstration model do not apply when:
A consumer is not entitled to a remedy when a supplier does not meet a consumer guarantee due to something:
When a consumer changes their mind
A consumer is not entitled to a remedy when they change their mind about the goods however a supplier may have a store policy to offer a refund, replacement or a credit note. If so they must abide by this policy.
For more detailed information on the nine guarantees including explanations of terms used, refer to:
Dealing with problems
Consumers will have rights against the supplier, and in some cases the manufacturer, if goods do not meet a consumer guarantee and this applies to both minor and major problems.
When the problem is minor
When the problem with the goods is minor, the supplier can choose:
When the problem is major (see page 21 of the guide for examples)
When the problem with the goods is major, the consumer can choose to reject the goods and:
The supplier must:
The supplier must not:
When a consumer rejects the goods
A consumer must advise the supplier if they intend to reject the goods, explain why and:
When a consumer cannot reject the goods
A consumer cannot reject goods when:
Responsibility for returning goods
When the consumer notifies the supplier they are returning the goods, the goods become the supplier's property. The consumer must return the goods to the supplier unless the cost of returning, removing or transporting is significant. If this is the case, the supplier must collect the goods at their own expense and within a reasonable time (see page 23 of the guide for examples).
A consumer who has returned goods within a reasonable time and is entitled to a refund, may also cancel the linked service contract. They can do this when returning the goods, or within a reasonable time. A consumer who cancels a linked service contract is entitled to a refund or can refuse to pay for any services not yet received.
The supplier does not have to give a refund for any services the consumer has received up to the time they reject the related goods.
The supplier must provide goods of the same type and similar value. If such a replacement is not reasonably available, the consumer may choose a repair or refund. The consumer must return goods to the supplier. If this involves significant cost to the consumer, the supplier must collect the goods at their own expense.
The consumer guarantees that applied to the original goods will apply to the replacement.
Claims against the manufacturer (refer to page 30 of the guide)
A manufacturer is a person or business that:
A manufacturer must provide a remedy when goods fail to meet the consumer guarantees for:
A manufacturer must honour:
If the manufacturer refuses to honour an express warranty or fails to do so within a reasonable period of time, the consumer can:
No refund signs and other statements
When selling extended warranties suppliers and manufacturers should explain to the consumer what an extended warranty provides in addition to the consumer's rights under the consumer guarantees.
Suppliers and manufacturers must not:
Suppliers and manufacturers can limit their liability under consumer guarantees for goods not used for personal, dometic or household purposes to:
Suppliers and manufacturers can only do this if it is fair and reasonable. Fair and reasonable will depend whether:
When a supplier fixes a problem that isn't their fault (manufacturer's indemnity)
A consumer may ask a supplier, not the manufacturer, to deal with the problem. If this occurs, the manufacturer must reimburse the supplier. The amount can include any compensation paid to the consumer for reasonably foreseeable consequential losses.
A supplier has three years to ask the manufacturer for reimbursement from:
Suppliers and manufacturers can make an agreement about what they will each cover however a manufacturer cannot contract out of their obligation to reimburse the supplier.
When goods are not used for personal, domestic or household purposes and it is fair and reasonable to do so, the manufacturer can limit their liability to the lowest cost among:
Receipts and other proof of purchase
Consumers who want to make a claim about faulty goods or services need to show they obtained the goods or services from the supplier or manufacturer and businesses will want to ensure claims made to them are genuine. Forms of proof include:
The same applies to goods and services given as gifts.
A consumer may be required to provide additional proof of purchase to support their claim, eg, if a receipt does not clearly itemise the faulty item. A supplier or manufacturer may choose to accept the consumer's claim even if the consumer cannot show they bought the goods from them. If a dispute arises over a claim without proof of purchase the consumer may seek the opinion of an Australian court or tribunal.
A range of resources has been developed to help businesses and consumers understand the new laws.
Consumer Guarantees - Training Videos A series of videos developed to answer questions on the Australian Consumer Law for business and consumers.
Free publications and guides
Order printed copies of these guides by emailing email@example.com