You do have to admire the Italians. They invented pizza and pasta and are still prepared to invest in lifetime guarantees for their products. Okay, so not all Italians. But the Italian cookware company Essteele has its Per Vita range. Cookware warranted for life. Legally speaking, that is an Express Warranty. For those who are unfamiliar with express warranties, this article talks about what they are and why they matter.
What is an Express Warranty?
A warranty is a guarantee of something. In the context of Consumer Law, it is a promise made by a business about their product or what they will do if you have difficulties with it. An express warranty is an extra promise or representation made by a business either verbally or in writing about the quality or standard of a good. It is ‘expressed’ precisely because it is written down or told to consumers.
It is not the only kind of warranty recognised in Australian law. Consumer law also covers warranties against defects and extended warranties. Sometimes they are not distinct from each other. For example, a warranty against defects can sometimes include an express warranty.
Typically, an express warranty is a representation about:
- the quality, state, condition, performance or characteristics of the product;
- what the good can do and for what amount of time; and
- the availability of servicing, supply of parts or identical products.
Be aware that express warranties exist independently of the Consumer Guarantees in the ACL. Importantly, they do not limit, override or exclude the Consumer Guarantees. If a business chooses to make an express warranty, they are still obliged to meet all of their legal obligations under the ACL.
What are the legal implications of an Express Warranty?
If a business makes an express warranty above and beyond those Consumer Guarantees available in the Australian Consumer Law (ACL), they automatically guarantee that the product will meet that promise. If it does not, the consumer has legal remedies against that business. So if a consumer’s Essteele Per Vita Saucepan falls apart one year after purchase, they can assert their rights against the supplier or manufacturer/ importer.
If a business breaches an express warranty, the remedies available are those listed in the Consumer Guarantees. Even though express warranties exist independently of the consumer guarantees, the remedies available in cases of breach are the same.
The particular remedies open to purchasers depend on whether the manufacturer/importer or supplier makes the express warranty. For example, Essteele guarantees their Per Vita cookware for life. The department store from which I purchased does not. As such, if my saucepan falls apart I would assert my rights against the Australian importer of Essteele.
If the breach of an extended warranty is minor and it is the supplier who makes the warranty, the consumer is entitled to:
- Repair or Replacement of Product;
- Refund; or
- Compensation for consequential loss.
In these cases, the supplier chooses the remedy – repair, replacement or refund.
If a breach is major, the consumer can:
- Reject goods or services and select either refund or replacement; or
- Request compensation for drop in value of good or service,
The customer chooses the remedy.
If a manufacturer makes an express warranty to a consumer that does not hold, the customer can request damages. The amount of compensation must be equal to, or less than the difference between the current value of the product and the lowest of either:
- The average retail price of the goods at time of purchase; or
- Actual price paid.
A consumer can ask for compensation to recover the reasonably foreseeable loss caused by the breach including the cost of inspecting and returning the goods to the manufacturer.
If a manufacturer does not honour their obligations under an express warranty, it is open to a consumer to take legal action and request consequential loss as a result of the manufacturer’s behaviour. They can also assert their consumer guarantees.
Why do Express Warranties Matter?
Express warranties and the obligations they place on suppliers and manufacturers/importers matter for many of the same reasons that the Consumer Guarantees do. They are an important means of ensuring that consumers can make informed decisions in the marketplace. An essential part of that process is consumers being about to rely on the representations made to them.
As a part of Australian consumer law, express warranties are also important because they form part of the law designed to protect consumers. They prevent businesses from making claims to garner sales that they have no intention of honouring.
If you would like to know more about warranties and express warranties, the Australian Competition and Consumer Commission website is an excellent resource. If you are a business owner and would like information about your obligations or what representations you may make, it is essential to speak with a qualified lawyer. Information at the outset can assist you and prevent difficulties later. Contact LegalVision’s lawyers to assist you. Questions? Call us on 1300 544 755.