In addition to any express warranties you give when you sell a product you are also under implied legal obligations whenever you are selling goods to a customer. As the seller of goods you are under an implied legal obligation to:

  • Sell goods of an acceptable quality
  • Make sure the goods are fit for the purpose they are being sold for
  • Ensure that the goods will be the same as what is in the sample model
  • Ensure that the goods are same as they are described
  • Abide by any warranties you make to customers
  • Ensure that the customer has legal title to the goods they purchase

If the goods or services provided to a customer fail to meet any of these standards, then a customer has a legal entitlement to:

  • A refund;
  • Replacement;
  • Ask for compensation.

What is the legal standard for acceptable quality?

The law is quite specific about what is an acceptable quality for a product sold to a consumer.  It is whether a consumer would find them:

  • Fit for the purposes for which the goods are usually supplied
  • Acceptable in appearance, as you would expect something of the kind to look
  • Without any defects
  • Safe and durable

Relevant to these considerations are:

  • The price
  • Statements about the products on the packaging
  • Any representations about the products made by the seller to the customer

What are damages?

An aggrieved customer may claim damages against you if it is found you have breached the contract between you and the customer.  “Damages” refers to an award of money which a court can order you to pay the other party for breaching the contract. Your defence – when the consumer misuses the items The good news is that there are limits to your liability.  If a consumer misuses the items the legal guarantee of quality will no longer apply. Under Australian consumer law, a seller will not be liable if the consumer uses the goods in what might be considered an ‘abnormal’ manner.  This basically means misusing the goods and covers breaking them or using them in a way for which the product is not intended.  For example:

  • If the consumer drops a mobile phone in water or leaves it out in the rain
  • The screen of a television is broken after an object hits it
  • Using a small lawnmower to mow four or more hectares each week
  • Picking up a laptop by the corner of its screen

‘No Refund’ Signs are unlawful

Yes, believe it or not – but you cannot rob a person of their rights which are enshrined in consumer law by putting up a ‘no refunds’ sign.  Under Australian consumer law all consumers have a basic level of ‘consumer guarantee’. Hence, these signs are also unlawful:

  • “No refund on sale items”; and
  • “Credit note only for return of sale items”

However, a seller is not obliged to refund or change the items simply because somebody has changed their mind.

What if a customer takes legal action against me?

You should talk to a business lawyer, a contract lawyer or get legal advice immediately.  In some cases you may not just be liable for your transaction with your customer, you might be subject to Government fines and penalties as well.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Lachlan McKnight
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy