Consumer guarantees

The Australian Consumer Law (ACL) provides statutory guarantees on certain goods (new and second-hand) and services sold, hired or leased.

Consumer guarantees apply to:

  • any type of goods or services costing up to $40,000
  • goods or services costing more than $40,000 and purchased for personal, domestic or household use
  • vehicles and trailers.

Consumer guarantees do NOT cover goods:

  • bought before 1 January 2011
  • bought from one-off sales by private sellers, such as garage sales or fetes
  • bought at auction, where the auctioneer acts as agent for the owner
  • costing more than $40,000 and normally for business use
  • bought to on-sell or resupply
  • a person uses, as part of a business, to manufacture, produce or repair something else.

Supply of goods

Consumer guarantees relating to the supply of goods include:

  • title – that the supplier has the right to sell the goods to the consumer (section 51)
  • the right to undisturbed possession – consumers should not be disturbed by others seeking to reclaim the goods (section 52)
  • undisclosed securities – goods must be free from any security, charge or encumbrance that was not disclosed, or was created without their consent (section 53)
  • acceptable quality – defined in section 54 (2) as being:
    • fitness for purpose for which such goods are commonly supplied
    • acceptable in appearance and finish
    • free from defects
    • safe
    • durable
  • fitness for any disclosed purpose (section 55)
  • supply of goods by description – goods must correspond with their description (section 56)
  • supply of goods by sample or demonstration – goods must correspond with the sample and consumers must be given a reasonable opportunity to compare goods with the sample (section 57)
  • repairs and spare parts – manufacturer to take reasonable steps to make repairs and spare parts available for a reasonable period after supply of goods (section 58)
  • express warranties – a manufacturer must comply with an express (manufacturer’s warranty).

Supply of services

There are guarantees as to ‘due care and skill’ in the supply of services to the consumer (section 60). There are also warranties as to ‘fitness for particular purpose’ of the provision of the service as made known to the provider, expressly or by implication (section 61), and as to supply of the service within a reasonable time (section 62), unless otherwise specifically provided in an agreement.

Guarantees are not to be excluded by contract, and there are certain limitations of liability for failures to comply with guarantees, other than title, undisturbed possession and absence of encumbrance by way of undisclosed securities. The extent of limitations is determined having regard to the relative bargaining positions, any inducements offered at time of sale or provision of the service, whether it was a special order, or the buyer knew or ought reasonably to have known of the existence or extent of any particular term due to a prior course of dealings between the parties.

There is particular legislation covering the provision of gas, electricity and telecommunications services and so these guarantees do not apply to those circumstances. Rules in relation to conflicts of laws between Australia and other jurisdictions may also apply, as does the UN Convention on Contracts for the International Sale of Goods.