A guest house owner hires a plumber to tile an ensuite. In the course of work, they remove and re-install a bathtub. Unfortunately, the tub’s plumbing fixture is not sufficiently tightened when it is re-installed. The fixture leaks and ruins the paintwork in the room below. If you are unsure what rights the owner has against the service provider in this situation, this article explains how Consumer Guarantees apply to services.  

What are Consumer Guarantees?

Consumer Guarantees are those warranties that all consumers can rely on when making a purchase.  They are enumerated in the Australian Consumer Law (ACL) (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) and apply both to goods and services. However, the guarantees for goods differ from those for services.

The guarantees enable consumers to know when they are entitled to a remedy from a business in cases of problematic purchases. Also, the ACL prescribes which remedy is appropriate in a given situation. In short, they articulate Consumers’ Rights.  

What is a Service?

In the ACL, services include duties, work, facilities, rights or benefits provided in the course of business. It includes recreational, professional, commercial and educational services. For example, ballet lessons, accountant’s services, dry cleaning and installing/repairing consumer goods.  

What are the Guarantees for Services?

The ACL provides that suppliers of services must provide their service with:

  • Due care and skill;
  • Which are fit for any specified purpose; and
  • Within a reasonable time if time is unspecified.

Due Care and Skill

This guarantee means all service providers must use an acceptable level of skill or technical knowledge when providing their services. They must also take all necessary care to avoid loss or damage when providing the service.

Fit for any Specified Purpose

This guarantee means that all service providers warrant that the service is reasonably fit for any purpose specified by the customer. Further, any product that results from the work is also guaranteed as fit for that purpose.

Reasonable Time

Certainly, most service contracts specify time periods and relevant dates. However, this guarantee assures all consumers where time is unspecified that the supplier will act in a reasonable time.  ‘Reasonable’ is contextual and depends mainly on the nature of the soon to be provided service.  

To illustrate using the plumber example from above, the Queensland Civil and Administrative Tribunal found that the plumber had caused the water leak and that he had not performed his work with due care. Further, the work he did not was unfit for the purpose for which the consumer purchased it. In other words, the supplier had failed to meet his consumer guarantees.  The Tribunal awarded damages to remedy the failure and fix the leak and to cover the loss from repainting the affected rooms.  

Remedies

Legal rights usually come with legal remedies. The Consumer Guarantees concerning services are no different. If services fail to meet the guarantees, a consumer has rights against the supplier. They must correct a fault, deficiency or failure. The particular remedy depends on the problem.

Minor Fault

If a fault is ‘minor’ for the ACL, the service supplier can choose to either:

  • Fix the problem (free of charge and within a reasonable time); or
  • Offer a refund.

If a supplier refuses to fix the problem or does not fix it in a reasonable timeframe, the consumer has the right to employ someone else to repair the problem. The consumer can then invoice the service provider for the reasonable costs of fixing it.  If the service is ongoing, the customer can rightfully cancel the service and receive a refund.

Major Failure

If a fault is ‘major’ for the ACL, the consumer has the right to take action against the service supplier so as to recover damages for reasonably foreseeable losses incurred because of the failure.

No Remedy

However, there are some occasions when a consumer has no recourse against a supplier.

If a supplier does not meet the consumer guarantees because of:  

  • Something someone else did or said (excluding their agents or employees); or
  • An event beyond human control that occurred after supply.

then a consumer has no remedy under the ACL. Further, a supplier need not provide any refund because a purchaser changed their mind about the service.  However, if they have a company policy in such instances, they must honour it.

Be aware that an individual who receives a service as a gift has the same rights as if they purchased it.

 

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If you would like further information about Consumer Guarantees and services, the website for the Australian Competition and Consumer Commission is an excellent resource. Contact LegalVision’s consumer lawyers to assist you. Questions? Call us on 1300 544 755.

Carole Hemingway

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