4 Things To Know When Offering Consumers Warranties

Goods purchased come with consumer guarantees established under the Australian Consumer Law (ACL). Consumer guarantees allow a consumer to repair, refund or replace a good if it does not meet the standards promised under the consumer guarantee.

A business can offer additional warranties, entitling consumers to similar remedies, usually for a limited period. You then need to know what obligations your promises to consumers place on your business. Consumer law is complicated and difficult to navigate. You cannot risk your business by making empty promises!

Below, we go through some of the extra warranties that businesses commonly offer as well as their obligation to follow through.

1. Express Warranties

Express warranties are where a business makes a promise about the standard or the quality of the good. It goes beyond the consumer guarantee of the good not being faulty, and may relate to the good’s performance or characteristics.

An example of an express warranty is a promise that a couch will last for ten years. If the couch only lasts for seven years, the express warranty is not satisfied, and the consumer is entitled to a remedy. Whether verbal or written, the consumer guarantee ensures that your warranty meets the standards you have promised.

2. Warranties Against Defects

Warranties against defects are often called manufacturer’s warranties. These are promises to the consumer about the remedies you will offer if there is something wrong with the goods. Again, this is in addition to the consumer guarantees.

There are requirements about how businesses should communicate warranties against defects to consumers such as what information they need to provide. If the business provides the warranty in writing, it must be written in clear and plain language.

A manufacturer’s warranty includes the length of time the manufacturer promises the goods will be free of defects. It will also address what the manufacturer will do if there is a defect in that period. The remedies are usually to repair, refund or replace the good.

3. Extended Warranties

Businesses may also offer a manufacturer’s warranty for an extended period. Remember that in general, consumer guarantees last longer than manufacturer’s warranties, so be genuine when offering extended warranties to consumers. Some businesses tell consumers that the extended warranty includes additional remedies that aren’t available under the consumer guarantees when this is not the case. Most consumers won’t know what rights and remedies they have under consumer law, but that does not mean you can take advantage of them!

If you convince consumers to purchase an extended warranty that does not provide them with remedies beyond the consumer guarantees, you may be in breach of the ACL.

4. Your Obligations

If you offer warranties on top of the consumer guarantees, you must comply with the warranty. The consumer guarantees secure your promise about the quality or the standards of a good. If the product fails to meet the quality or standard that you have promised, consumers can pursue the remedies available under the consumer guarantees.

Questions? Get in touch with LegalVision’s Consumer Lawyers on 1300 544 755.