How Do Consumer Guarantees Apply to Goods?

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Table of Contents

• Relevant Law
• Applicable Definitions
• Consumer Guarantees
• How do the Guarantees Apply to Goods?
• Goods Not Covered by ACL
• Key Takeaways
• Frequently Asked Questions

Consumer guarantees provide Australian consumers with legal protection when purchasing goods and services. It may be hard to picture modern-day marketplaces working efficiently without this form of consumer protection. However, many Australian consumers are either not aware of their rights or the extent of these rights. This article discusses how consumer guarantees apply specifically to goods.

Relevant Law

The Australian Consumer Law (ACL) covers the consumer guarantees that apply to goods and services. For goods, the guarantees mean that all suppliers and manufacturers in Australia provide certain assurances about the products that they: 

• sell; 
• lease; or 
• hire out to consumers. 

Applicable Definitions

To access the consumer guarantees, a consumer must first meet the relevant definition in the ACL. The ACL also defines manufacturer and supplier.

Consumer

A consumer is a person who buys:

• any good or services costing up to $100,000.00 (or an amount specified in the Australian Consumer Law Regulations);
• goods or services costing over $100,000.00, typically used for personal, domestic or household uses; or
• goods which consist of a vehicle or trailer that has a principal use of transporting goods on public roads.

However, a purchaser will not be a consumer if they buy goods in the course of trade or commerce intended:

• for re-supply;
• for use or transformation through processing, production, manufacture; or
• to repair or treat other goods/fixtures on land.

Manufacturer and Supplier

A manufacturer is a person who:

• grows, extracts, produces, possesses or assembles goods;
• holds themselves out to the public as a manufacturer of goods;
• permits or causes their name, brand mark, or business name to be applied to the goods supplied;
• permits themselves to be held out as the manufacturer by another person; or
• imports goods into Australia, where the manufacturer of the goods has no place of business in Australia.

Consumer Guarantees

In total, nine guarantees apply to goods. Suppliers and sometimes manufacturers guarantee that a good:

• is of an acceptable quality when sold to a customer;
• has an accurate description (for example, in a catalogue);
• will satisfy any additional promises made about it;
• is reasonably fit for any purpose the consumer or supplier specified; and
• matches a sample or demonstration model and any description provided.

Additionally, suppliers and manufacturers guarantee that:

• the supplier has clear and unencumbered title to the good unless informing the consumer is told otherwise before sale;
• no person will attempt to repossess or take back the goods or prevent the use of them except in particular circumstances;
• suppliers warrant that goods are free of hidden securities or charges and will remain so except in some specific cases; and
• manufacturers or importers guarantee they will take reasonable steps to supply spare parts and repair facilities for a reasonable time after purchase.

How do the Guarantees Apply to Goods?

Guarantees provide automatic protection for consumers who have purchased a good. If a consumer has a problem with their purchase because it does not meet one of the guarantees, they will have a statutory right against the supplier or manufacturer.

Minor Breach

The remedies open to consumers of goods where the breach is minor include:

• repair or replacement;
• refund; and
• compensation for consequential loss.

In cases of minor problems, the supplier has the right to choose the remedy.

Major Failure

However, if the problem constitutes a ‘major failure’, the remedies include:

• rejecting the good and the choice of a refund or replacement; or
• requesting compensation for any attendant drop in the value of the good on account of the problem.

In cases of major failure, it is the consumer who chooses the remedy.

Manufacturers and Importers

In some instances, purchasers can recover damages from the manufacturer/importer of the good, depending on the guarantee(s) breached. However, not all consumer guarantees give legal rights against a manufacturer or importer.

The consumer guarantees provided by manufacturers/importers are:

• the product is of acceptable quality;
• availability of repairs and spare parts;
• the product matches its description; or
• any express warranty made by the manufacturer/importer.

Goods Not Covered by ACL

The ACL does not cover all products. Therefore, in those cases not covered, consumers have no recourse to the consumer guarantees for goods or the available legal remedies. In brief, these include goods bought:

• before 1 January 2011;
• from one-off sales by private sellers (for example, garage sales);
• at auctions (in person or online); and
• costing more than $100,000.00 and for business use (for example, machinery).

Key Takeaways

The ACL protects consumers buying most types of goods and services. Additionally, the ACL stipulates a set of consumer guarantees that consumers are entitled to when purchasing goods. Also note, the consumer guarantees apply even if the manufacturer or supplier does not make any warranties about the goods. If you need advice regarding the consumer guarantees, contract LegalVision’s consumer lawyers on 1300 544 755 or fill out the form on this page. 

Frequently Asked Questions