Buyers of goods like televisions or white goods are often asked if they would like an extended warranty beyond the standard warranty offered by the manufacturer. However, they may already be covered by the Australian Consumer Law. Under the ACL, 'consumers' that buy certain goods or services automatically receive 'consumer guarantees' regarding the quality of the goods/services. These guarantees cannot be removed.
Guarantees regarding goods include that they are fit for purpose, free from defects, safe and durable. The 'guarantee' will vary depending on the type of goods purchased - an expensive washing machine should be expected to last longer than a cheap children's toy. If what you have 'bought' are services, then you are entitled to expect due care and skill, fitness for purpose and the services to be provided within a reasonable time or within the time agreed.
The consumer has a range of remedies for breaches of these guarantees, including repair, a refund, replacement and/or compensation. Importantly, the 'consumer guarantee' only applies to 'consumers'. Until July 1, the ACL limited that status to contracts for goods or services for less than $40,000. There were some exceptions where this limit did not apply. This was where the goods or services were of the type usually purchased for personal, domestic or household use. It also applied to a vehicle or trailer used principally in the transport of goods on public roads. What is the relevance for those in regional areas?
Farmers and regional businesses often enter into contracts for goods or services that exceed $40,000 - for example, the purchase of a large quantity of fertiliser or chemicals. Such goods are not used for personal, domestic or household use. The consumer guarantees therefore do not apply, and, if something went wrong, a farmer or a business would not have that protection. However, there have been a number of changes introduced since 2018. One of these is an increase in the financial threshold for the definition of consumer from $40,000 to $100,00.
From July 1, the consumer guarantees apply in any case where the price of the goods or services is less than $100,000. This change means that access to the consumer guarantees and the protections they afford will increase dramatically for all consumers, including farmers and other businesses - something that will no doubt be welcomed by all as a positive move.
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.