Skip to content

What Guarantees Apply to the Sale of Services?

As a business owner, you must understand these service guarantees. Under the Australian Consumer Law (ACL), consumer guarantees apply to goods and services you purchase as a consumer. The goods and services suppliers make these guarantees, giving assurances to you regarding the quality. This article discusses how consumer guarantees apply specifically to services. 

Consumer Guarantees

Three guarantees apply to services, including that the goods or services will:  

  • be provided with due care and skill or technical knowledge and that suppliers will take all necessary steps to avoid loss and damage;
  • be fit for the purpose that you agreed to purchase the service for;
  • be provided or delivered within a reasonable time if there has not been an agreed date.

Due Care and Skill 

This guarantee ensures that all services you receive meet an acceptable level of skill or technical knowledge. The provider must take all necessary steps to avoid damage or loss.

The standard of due care and skill is that which a competent person with average skills and experience in this service could provide.

Continue reading this article below the form
Loading form

Fit For Purpose 

To be fit for purpose, the service must satisfy a range of criteria which include:

  • that the service must achieve the purpose that you specify to the service provider; and
  • that the services are of a standard that is expected to achieve the results that you specified to the supplier.

This guarantee does not apply when the skill or judgement of the supplier was not relied upon when purchasing the service or if the service was purchased from a qualified architect or engineer.

Reasonable Time

Suppose the service contract does not state when you must provide or complete the service. In that case, the party may expect services within a reasonable period of time.

What is a reasonable time will vary depending on the type of service that has been purchased. If you are unsure of which guarantees apply to the sale of services, seek legal advice from a small business lawyer.

Remedies 

If the services do not meet consumer guarantees in relation to services, the remedies include: 

  • cancelling a service; and 
  • in some cases, compensation for damages and loss. 

The remedy you are entitled to will depend on whether the failure to comply with the guarantee is a major or minor failure.

Minor Failure 

The consumer cannot immediately cancel and demand a refund for a minor service problem. Here, the supplier has the right to fix the problem (at no cost to the consumer) in a reasonable amount of time.

If the supplier refuses to rectify the problem or takes too long to do so, a customer has the right to:

  • engage someone else to fix the problem and invoice the supplier the reasonable costs of doing so; or
  • cancel the contract, and if they have paid, receive a refund.

Major Failure 

However, where there is a major failure with the service, the remedies include: 

  • cancelling the contract and paying a reasonable amount for the work or seeking a refund for money already paid; or
  • keeping the contract and negotiating a price reduction for the drop in the value of the services. 

Suppose you choose to cancel the contract.

Accordingly, as soon as you inform the service provider the contract is considered cancelled. This can be done verbally or in writing.

Furthermore, you may only do so if it is a major failure. 

A major failure occurs in the following scenarios: 

  • where you would not have engaged the service if you knew the nature and extent of the problem; 
  • where the service does not meet the reasonable expectations for the type of service, and the provider cannot rectify the problem within a reasonable time; or 
  • where the supply of the service has created an unsafe situation. 

Notably, the above is not an exhaustive list.

Front page of publication
Directors' Duties Complete Guide

If you are a company director, complying with directors’ duties are core to adhering to corporate governance laws.
This guide will help you understand the directors’ duties that apply to you within the Australian corporate law framework.

Download Now

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 services. 

If you need advice regarding consumer guarantees, please get in touch with LegalVision’s business lawyers. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us on 1800 534 315 or visit our membership page

Frequently Asked Questions 

What guarantees apply to services? 

There are three guarantees in relation to services: that they will be fit for purpose, that they will be provided with due care, skill and technical knowledge and within a reasonable time where there has been no agreed date. 

What happens when a consumer guarantee is breached? 

Depending on whether the breach is minor or major, the consumer will have a range of remedies available to them. For example, this includes cancelling the services contract or seeking a refund for the services provided. 

Register for our free webinars

ACCC Merger Reforms: Key Takeaways for Executives and Legal Counsel

Online
Understand how the ACCC’s merger reforms impact your legal strategy. Register for our free webinar.
Register Now

Ask an Employment Lawyer: Contracts, Performance and Navigating Dismissals

Online
Ask an employment lawyer your contract, performance and dismissal questions in our free webinar. Register today.
Register Now

Stop Chasing Unpaid Invoices: Payment Terms That Actually Work

Online
Stop chasing late payments with stronger terms and protections. Register for our free webinar.
Register Now

Managing Psychosocial Risks: Employer and Legal Counsel Responsibilities

Online
Protect your business by managing workplace psychosocial risks. Register for our free webinar.
Register Now
See more webinars >
Shauna Ng

Shauna Ng

Lawyer | View profile

Shauna is a Lawyer in LegalVision’s Corporate and Commercial and Regulatory and Compliance teams. She assists a diverse range of clients in drafting and reviewing their agreements and also provides regulatory and compliance advice in various areas as required. Shauna has a particular interest in health-related services, including NDIS services.

Qualifications: Bachelor of Laws (Hons), Flinders University, Bachelor of Accountancy, Nanyang Technological University.

Read all articles by Shauna

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2025 Future of Legal Services Innovation Finalist - Legal Innovation Awards

  • Award

    2025 Employer of Choice - Australasian Lawyer

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2022 Law Firm of the Year - Australasian Law Awards