The requirements on express warranties against product defects
under the Australian Consumer Law (ACL) will become even stricter
after 1 January 2012.
The requirements will apply in respect of products sold to
"consumers" after 1 January 2012 for personal, domestic
or household use, or where the value of the order is AUD$40,000 or
less (which would include sales by one business to another
business, as a "consumer" can be a business).
There is a prohibition against supplying goods to consumers in
Australia with any warranty document that does not
comply with the new requirements after 1 January 2012. The penalty
for non-compliance is a fine of up to $50,000.
Some of the key requirements for any such warranty against
defects that is given by a business are:
a concise statement of what the business must do to honour the
warranty and what the consumer must do to claim the warranty
(including the procedure the consumer must follow and the address
to which claims may be sent)
it must contain the business' name, business address, phone
number and email address (if any)
a statement of the warranty period
details of who will bear the expense of claiming the warranty,
and if the expense is to be borne by the business, how the consumer
can claim expenses incurred in making the claim
a statement that the benefits given by the warranty are in
addition to a consumer's other rights and remedies
a statement in a particular form prescribed by the Regulations
to the ACL, regarding other legal rights the consumer has, and
it must be transparent and in plain English.
Whilst these requirements are generally good practice, the
prescribed wording required by the Regulations is
Australian-specific, and warranties will not comply with the
Regulations unless this wording has been included, regardless of
the rest of the content.
The new requirements apply to warranties against defects given
by a business when selling a product to an end user.
Also, where a business supplies a product to a reseller with a
manufacturer's warranty against defects that does not comply
with the new requirements, and that reseller then on sells to an
end consumer with the same non-compliant manufacturer's
warranty, that reseller could also be fined by the ACCC.
An issue which may require some management for certain
businesses is if any resellers of that business' products carry
stock packaged with an old, non-compliant warranty against defects
notice, and sell that stock after 1 January 2012. If this is an
issue, one option may be to set up a system whereby the reseller
supplies a separate, revised, compliant warranty document to the
customer at the time of purchase, which clearly supersedes the
Where appropriate, a business should review its warranties for
compliance, and consider how to manage the issue.
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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The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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