On 16 November 2010 the final Australian Consumer Law
(ACL) regulations were published. One of the
key provisions of the ACL is section 54, which is a statutory
guarantee of acceptable quality of a good or service enforceable
against the suppliers and manufacturers of that good or
In addition, from 1 January 2012 all warranties against defects
must comply with the Competition and Consumer Regulations
2010 (the Regulations). Under these
regulations it will be an offence for a company or individual in
connection with the supply of goods or services to:
give a consumer a non-compliant warranty against defects (or a
document that evidences one); or
represent directly to a consumer that a non-compliant warranty
against defects applies to goods or services.
The new requirements under the ACL will affect all consumer
products which have an express warranty against defects. If
businesses do not comply with the Regulations, they risk making a
false or misleading representation to their customers.
Apart from potential liabilities to consumers at common law,
there are also penalties within the legislation. Corporations
can be fined up to $50,000.00 per offence, and individuals can be
fined up to $10,000.00 per offence. Other potential remedies
include orders for damages and injunctions.
To ensure compliance, suppliers and manufacturers should use the
time they have until the new warranty requirements come into effect
to ensure that their warranties are compliant by 1 January
What is a warranty against defects?
Under section 102 of the Australian Consumer Law a warranty
against defects is defined as
a representation made to a consumer in connection with the
supply of good or services, at or about the time of supply, to the
effect that a person will (unconditionally or on specified
repair or replace the goods or part of them; or
provide again or rectify the services or part of them;
wholly or partly recompense the consumer;
if the goods of services or part of them are defective, and
includes any document by which such a representation is
Does this affect my business?
Any business that is involved in providing a good or service to
a consumer is affected by these warranty requirements.
Manufacturers and distributors could commit an offence if, for
example their advertising material for goods or services referred
to a non-compliant warranty against defects. Manufacturers
will need to review and amend all documents that contain warranties
against defects, such as warranty cards, advertisements claims,
terms and conditions and product manuals, including hard copy and
Retailers are also at risk of committing an offence since
salespeople may give warranty advice to consumers as part of their
customer service. Retailers will also need to make sure
the warranties provided by their suppliers comply with the
How to comply
There are requirements in both form and substance, which are
Should you require assistance to ensure your warranties are
compliant, we can provide that assistance.
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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