Limitation of Liability: Manufacturers and Importers

The Australian Consumer Law (ACL) introduced provisions allowing consumers to seek recourse from manufacturers or importers if they have experienced loss or damage from the supply of goods. These wide-reaching provisions may impact many businesses, particularly their limitation of liability when supplying goods. This article will run through the surrounding legal considerations any manufacturer or importer needs to make.

Who is Covered?

The supply of goods can cover both the supply of goods to individuals or businesses. The ACL will cover the recipient of the good if the good supplied is less than $40,000. Individuals will always be covered even if the good is more than $40,000.

What are the Statutory Guarantees?

The ACL aims to protect consumers. This means that there are certain statutory guarantees in place that prevent businesses from contracting out of these guarantees. This includes guarantees relating to:

• Quality fit for its purpose;
• Compliance with any claims or representations made about the product;
• Spare parts and repair facilities available;
• Compliance with any descriptions about guarantees or offers; and
• Undisturbed possession.

What is the Extent of my Liability?

The difficulty for manufacturers and importers is that the recipients or the affected individual or business that acquired the good can directly go to them for any claims for compensation. This could include a direct action in court or the relevant consumer body. For example, if your business manufactured the hardware for the server of another business and the server subsequently broke down, the business may be able to make claims against you for any losses experienced as a result of the server breakdown.

What do I Need to Consider?

For businesses supplying goods to other businesses as manufacturers or importers, it is important to consider the wide reach of liability this may cause. Responsible business practices, including monitoring your product safety will be necessary to prevent any claims made against you. By looking at the quality of the goods you provide, including design, production and marketing, you will be promoting care and compliance with any Australian Consumer Law provisions.

As manufacturers and importers, it is important to ensure that the goods you provide are not only quality products, but that they also need to fit the description of your promotional material. If you are unsure of your obligations or would like to understand the extent of your liability to your customers, get in touch with LegalVision’s consumer lawyers.