Australian Consumer Law — Chapter 6 — Warranties

February 27, 2020 posted by


There are a couple of different types of warranties under the Australian Consumer Law. The first type is the set of consumer guarantee rights discussed in Chapters 2 to 5. I’ll also explain the other types of warranties: Express warranties. Manufacturer’s warranties or warranties against defects. And extended warranties. Suppliers and manufacturers often make extra promises about the quality, state, condition, performance or characteristics of goods. These are called express warranties. An express warranty can be any extra promise, either verbally or in writing. One of the consumer guarantees that consumers have states that all express warranties will be honoured. If it’s not, the consumer is entitled to a remedy. For example, if a salesperson tells a consumer that a stovetop they are about to buy will last 10 years, they are making a promise about the performance of the goods. If the stovetop only lasts six years, the express warranty has not been honoured. In other words, the consumer guarantee has not been met and the consumer is entitled to a remedy. Businesses or manufacturers may provide a warranty that spells out what will be done to fix a problem with goods, if one happens. These types of warranties are called warranty against defects, or a manufacturer’s warranty. For example, a consumer might buy a deck chair that comes with a written warranty. The warranty says the manufacturer will replace the deck chair if it breaks within two years of the purchase date. Sometimes a warranty against defects may also contain an express warranty, but they’re not quite the same. Where an express warranty actually promises something about the goods – for example, that it will work properly for two years, the warranty against defects makes no such promise. It just states what the supplier or the manufacturer will do if the problem occurs with the goods. Both types of warranties will usually have a time limit and be subject to terms and conditions. A warranty against defects must be in writing and: Expressed in reasonably plain language, be legible and presented clearly. Explain what the manufacturer must do so that the warranty can be honoured and what the consumer must do to be entitled to the warranty – for example, how to use the goods correctly. Contain the warrantor’s name, business address, phone number and email address. Set out relevant claim periods and procedures – for example, relating to authorised repairers and transporting goods – including the address to where the claim must be sent. Explain who will bear the expense of the claim and how the consumer can seek reimbursement for any expenses. Include a statement of benefits the warranty gives to the consumer in addition to the consumer guarantees. Include a prescribed statement which explains that the rights under the warranty sit alongside the consumer guarantees, which cannot be excluded. The ACL regulation provides specific text for this statement. An extended warranty is an extension of time on a warranty against defects and/or an express warranty. Many suppliers offer extended warranties. It is important to remember that all warranties are offered in addition to the consumer guarantee rights. The consumer guarantees cannot be taken away from a consumer. Therefore, a consumer does not need to purchase an extended warranty if it only covers the length of time that it would be reasonable to expect the goods to last for anyway. As a consumer, if you’re considering purchasing an extended warranty, make sure you carefully consider whether the additional cost is worth the expected benefit. Make sure you are not paying for something that is already your legal right. As a supplier, it is important to ensure that you’re not misleading a consumer into purchasing something that is already their legal right. If you are selling extended warranties, make sure that the consumer is aware of how the extended warranty benefits or protects them, above and beyond their consumer guarantee rights. A common example of when extended warranties are offered is on high-end electronics or whitegoods. For example, a consumer buys a new LCD television for $2,000. It has a written one year manufacturer’s warranty. The retailer offers the consumer an extended warranty for a further five years for $300. If this TV were to break after 18 months, the retailer would still be need to fix the TV for free, regardless of whether the consumer purchased the extended warranty or not. This is because it would be reasonable to expect a $2,000 TV to last longer than 18 months and the consumer guarantee for acceptable quality has not been met. If the TV lasted five and a half years, the retailer would only have to fix the TV under warranty if the consumer had purchased the extended warranty.

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