Consumers typically know when they are experiencing a problem with a good or service. However, when the problem with a good or service is extremely severe, it is known as a ‘major failure’. In these circumstances, the law prescribes specific steps (remedies) to rectify the major failure. This article will explain exactly what a major failure is for goods or services and the remedies available if you have experienced one.
Major vs Minor Failures
Depending on what has occurred, a consumer issue is either ‘minor’ or ‘major’. The Australia Consumer Law (ACL) governs consumer problems defines a major problem as a ‘major failure’. The term applies equally to goods and services. It is essential to know if a problem constitutes a major failure because it affects the remedies available you if you have experienced one.
Major Failure and Goods
For goods, a major failure occurs when no reasonable consumer would have made the purchase if they had known about the problem, and the good is:
- significantly different from the description, sample or demonstration model shown to the consumer;
- substantially unfit for its normal purpose and cannot be easily made fit in a reasonable time;
- substantially unfit for a purpose that the consumer made known to the supplier, and it cannot be made fit easily and within a reasonable time; or
Major Failure and Services
For services, a major failure occurs when a reasonable customer would not have acquired the service if they were aware of the nature and extent of the problem, and the;
- service is substantially unfit for its normal purpose, and it cannot be made fit for that purpose easily and within a reasonable time;
- consumer informed the supplier that they required the service for a particular purpose, but the service and any resulting product dis not achieve that purpose and cannot be easily made fit in a reasonable time;
- consumer told a supplier about the particular result they wanted from the service but the service and any resulting product, do not achieve that result; or
- supply of a service created an unsafe situation.
Remedies for Major Failures
Major failures entitle consumers to different remedies than minor problems. Further, the purchaser chooses the remedy. In comparison, a supplier selects the remedy at first instance for a minor problem.
If you have a major failure with a product, you have a right to:
- reject it and request either a refund or replacement; or
- request compensation equal to the drop in the value of the product owing to the problem.
If a product doesn’t match its description as stated by the manufacturer, you can recover compensation.
If you experience a major failure with a service, you have the right to:
- cancel the service contract with the supplier and obtain a refund for any part of the service not consumed; or
- keep the contract and receive compensation for the difference in value between the service supplied and the service for which they paid.
In the circumstance that you have purchased a product or service that was fundamentally different to what any reasonable person would expect, it may be classified as a major failure. If so, there are a number of remedies available to rectify the issue. If you have any questions about major failures or other consumer problems, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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