From 1 January 2012 manufacturers and suppliers of goods to
consumers will be required to comply with specific requirements if
they provide warranties against defects. For example, if you
provide a 12 month warranty with your equipment, you will need to
update your packaging, terms and conditions and any other
documentation that mentions the warranty.
The Australian Consumer Law
The Australian Consumer Law ("ACL")
commenced operation on 1 January 2011, replacing the existing
national, State and Territory laws on implied conditions and
warranties with a single national system of statutory
"consumer guarantees". For example, goods supplied to
consumers must be of "acceptable quality".
The consumer guarantees are in addition to any warranties
against defects that manufacturers and suppliers choose to provide
consumers (sometimes referred to as express or voluntary
warranties). The ACL provides that such warranties do not limit or
replace any applicable consumer guarantees.
The changes that are scheduled to take effect on the first day
of next year will require manufacturers and suppliers to explain
the distinction between consumer guarantees and warranties on their
Under the new requirements, if a supplier or manufacturer
provides a warranty against defects to consumers, then the document
setting out the warranty (e.g. the packaging or warranty documents
inside the packaging) must comply with specific ACL requirements.
One of the requirements is that the warranty includes standard
wording prescribed by the ACL's Regulations.
Penalties may apply
If you do not meet these ACL requirements, you may face
penalties up to a maximum of $50,000 for corporations and $10,000
for individuals. In addition, misleading representations may result
in penalties of up to $1.1 million for corporations and $220,000
for individuals and damages for any loss the consumer suffers.
What do you need to do?
If you provide consumers with warranties in relation to your
goods, we recommend that you conduct an audit of all packaging,
terms and conditions and any other documentation that mention the
warranty and seek legal advice.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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