The Australian Consumer Law (ACL) sets out several rights and protections known as ‘consumer guarantees’ that consumers are entitled to when they purchase goods or services in Australia. These guarantees are automatically provided by law. Consequently, businesses must comply with them and cannot exclude these guarantees, regardless of any other warranties or disclaimers they may offer.
Any attempt to exclude or modify these guarantees will be invalid and unenforceable. The consumer guarantees are designed to ensure that consumers are not left out of pocket or unfairly disadvantaged if the goods or services are faulty, unsafe, or do not meet their expectations. Consumers have a right to take action against a business that breaches their rights under the ACL.
What Are the Consumer Guarantees?
Consumer guarantees apply when a consumer acquires goods or services. For example, consumer guarantees for goods cover new and used goods and a wide range of products, including:
- electronics;
- household appliances;
- clothing; and
- vehicles.
Consumer Guarantees for Goods
Let us explore consumer guarantees for goods.
1. Acceptable Quality
This means that the goods must be safe, durable, and free from defects.
2. Fit for Purpose
The goods must be suitable for the purpose that the consumer has made known to the supplier or that the supplier should reasonably be aware of. For example, a consumer who buys a laptop for video editing purposes can reasonably expect the laptop to handle video editing software and perform the necessary tasks.
3. Description and Sample
Suppose a supplier or manufacturer provides a description or a sample of a good. In that case, the goods must match that description or sample.
4. Clear Title
There must be no legal or ownership issues that would prevent the consumer from owning or using the goods. For example, suppose a consumer buys a car. They should be able to reasonably expect that the car is not stolen or subject to any legal claims.
5. Undisputed Possession
The goods must not be subject to any other claims or charges that could prevent the consumer from using or owning the goods. For example, suppose a consumer buys a house. They should be able to reasonably expect that there are no liens or mortgages that would prevent them from owning or using the property.
6. Repairs and Replacement Parts
Suppliers and manufacturers are obligated to make repairs and replacement parts available to consumers for a reasonable time after purchasing the goods. For example, if a consumer buys a refrigerator, they should be able to reasonably expect that replacement parts will be available if the refrigerator needs repair.
7. Express Warranties
Consumers can enforce express warranties provided by the manufacturer or supplier. Express warranties are specific promises or guarantees made by the supplier or manufacturer about the goods that consumers can take legal action to enforce. For example, suppose a consumer buys a television with a one-year warranty. They can expect the supplier or manufacturer to honour that warranty and provide repairs or replacements if needed.
Consumer Guarantees for Services
Let us now explore consumer guarantees for services.
1. Fit for Purpose
The services must be suitable for the purpose that the consumer has made known to the supplier or that the supplier should reasonably be aware of. For example, suppose a consumer engages a builder to construct a swimming pool. In that case, the builder must ensure that the pool is designed and built to meet the consumer’s needs and specifications and is suitable for use as a swimming pool.
2. Carried Out With Reasonable Due Care and Skill
The services must be provided with a level of care and skill expected of a competent service provider in the same industry or profession. This means that the service provider must use their knowledge, expertise, and resources to provide services that are of an acceptable standard.
3. Provided Within a Reasonable Timeframe
You must provide services within a reasonable timeframe. Ensure you account for the nature of the services and any agreed-upon timelines. For example, suppose a consumer engages a mechanic to service their car. The mechanic must complete the service within a reasonable time frame, depending on the scope of the service and any agreed-upon deadlines.
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What Happens If I Do Not Meet the Guarantees?
Goods
If a product fails to meet a consumer guarantee, the consumer has the right to seek
recourse against the supplier of the products and, in some cases, the manufacturer. The supplier or manufacturer must provide a remedy to address any faults or shortcomings. These guarantees apply to both major and minor issues.
For a minor failure, the supplier can offer a repair, replacement or refund. However, if the failure is major, the consumer can reject the goods and choose between:
- a refund;
- a replacement; or
- compensation.
Services
If your services fail to meet consumer guarantees, the consumer can seek redress from the supplier by obtaining a remedy for any faults or failure to meet any obligations.
For a minor failure, the supplier can use their discretion to either fix the problem with the service, free of charge and within a reasonable timeframe or offer a refund. In this case, if the supplier takes too long to fix the problem, the consumer can hire someone else to fix the problem and recover reasonable costs from the supplier. Alternatively, if the service is ongoing, the consumer can cancel the services and receive a refund.
Continue reading this article below the formPenalties For Breach Of the ACL
Companies and individuals can be fined and suffer pecuniary penalties if they are found to have breached the ACL. From November 2023, the penalties for breaches will increase as follows.
1. Corporations
Previously, the maximum penalty was $10,000,000, but this will increase to:
- $50,000,000;
- three times the value of the “reasonably attributable” benefit obtained from the conduct if the court can determine this; or
- if a court cannot determine the benefit, 30 per cent of adjusted turnover during the breach period.
2. Individuals
Previously, the maximum penalty was $500,000. However, this is due to increase to $2,500,000.
Key Takeaways
The Australian Consumer Law (ACL) provides consumers with rights and protections known as consumer guarantees. These guarantees apply to goods and services and cannot be excluded or modified by businesses. If these guarantees are not met, consumers have the right to seek recourse against the supplier or manufacturer, and penalties can be imposed on businesses that breach the ACL.
If you need help complying with the consumer guarantees, our experienced regulatory and compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The consumer guarantees in the Australian Consumer Law (ACL) give consumers access to a detailed list of rights for the goods and services they buy. There are nine guarantees relating to goods and three which are specific to services.
No, a business cannot exclude consumer guarantees. The Australian Consumer Law (ACL) sets out several rights and protections known as ‘consumer guarantees’ that consumers are entitled to when they purchase goods or services in Australia. These guarantees are automatically provided by law. Any attempt by a business to exclude or modify these guarantees would be considered invalid and unenforceable.
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