We’re in for some changes to the Australian Consumer Law that will be coming in on 1 January 2012. They concern the wording in warranties against defects given to consumers. Consumers include purchasers of products for personal, domestic or household use, or where the value of the good sold is $40,000 or less. 

Warranties against defects may be expressed in an agreement or by statutory guarantees.

ACCC seems to be taking a broad approach to what ‘evidences’ a warranty. If you are dealing with consumer warranties, it would be prudent for you to check any warranty cards, statements and terms, product manuals, sales documents and your website for proof of a warranty. 

The specific ‘content’ requirements will require the following to be included in all warranties against defects supplied to consumers:

• entity’s business name and contact details;
• what the entity must do if goods are faulty or defective (e.g. repair or compensate);
• what the consumer must do to claim under the warranty (e.g. not misuse the goods, where to send the claim, etc);
• the warranty period;
• whether or not the entity is responsible for expenses incurred making a claim and if so, how they can be claimed back; 
• a statement to say that benefits provided by the warranty are in addition to rights and remedies available under the law; and
• this mandatory text:

'Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure'

If your suppliers give warranties against defects, it would be prudent to check their documents also. 

Author: Sarah Holley 
Lawyer: Tim Nethercote 

New requirements for warranties against defects – are your warranties defective? by Holley Nethercote Commercial Lawyers is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Australia Licence.

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