As of 1 January 2012, products and services with warranties need to comply with Regulation 90 of the Australian Consumer Law or they cannot be legally sold in the country, risking a fine of up to A$50,000.  

This Regulation states that a warranty against defects must be contained in a document that is “transparent” and easily understandable, and must include: 

• what the consumer must do to entitle them to claim the warranty; 
• identification and contact information about the person/organisation giving the warranty and what they are promising the consumer they will do under the warranty;
• the period during which a defect in the goods or services must appear for the consumer to be entitled to claim the warranty;
• the procedure for the consumer to claim the warranty, including the address to which a claim may be sent; 
• the name and contact details of the party who will bear the expense of claiming the warranty, including postage and freight costs;  and
• a statement that the benefits given by the warranty are in addition to other rights and remedies which are available to the consumer.

The warranty against defects must also include the following statement:

"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 for 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." 

Although the wording in the above statement refers only to goods, it must be included even if the 'warranty against defects' relates only to services.

To confirm, a 'warranty” is defined here as a representation communicated to a consumer in connection with the supply of goods or services, at or about the time of supply, to the effect that a person will (unconditionally or on specified conditions):

a. repair or replace the goods or parts of them; or 
b. provide again or rectify the services or part of them; or 
c. wholly or partly recompense the consumer,

if the goods or services or part of them are defective, and includes any document by which such a representation is evidenced. 

The definition only applies if the representation is made to a 'consumer'. A person acquires goods or services as a 'consumer' if, and only if:

a. the price for the goods or services is $40,000 or less; or 
b. the goods or services in question are of a kind ordinarily acquired for personal, domestic or household use or consumption. 


Failure to comply with these requirements will result in a contravention of section 102 of the ACL.  It is an offence to represent directly to a consumer that a warranty against defects applies to goods or services unless the warranty complies with Regulation 90.  For instance, a retailer will commit an offence if it says to a customer that a product is covered by a manufacturer's warranty against defects if the printed warranty card accompanying the product does not comply with the regulation.  Similarly, the manufacturer of the product will commit an offence if its advertising or promotional material for the product refers to a non-compliant warranty against defects.  Offences against these requirements are punishable by fines of up to $50,000 per offence for body corporates, and $10,000 for individuals.  Other remedies such as injunctions and damages may also be ordered for breaches.

Manufacturers and service providers will need to review and, as necessary, revise their printed warranty cards and any other documents, such as manuals and terms and conditions, in which warranties against defects are set out.

Retailers are in a difficult position. The prohibitions in the Competition and Consumer Act 2010 are against 'giving' to a consumer a non-compliant warranty document or representing to consumers that such a warranty applies. Consequently, if a warranty document accompanying goods does not comply with Regulation 90, the retailer will commit an offence because the retailer gives it to the consumer, even though the document has been supplied by the manufacturer of the goods. Retailers will have to check the warranty documents supplied by the manufacturers or suppliers of the goods and services they resell to ensure that they comply with Regulation 90.


If you have any concerns or questions as a manufacturer or service provider, please either email Naomi Fink or call her on tel: +613 9670 8200. 

New warranty requirements for goods and services sold in Australia in new year by Holley Nethercote Commercial Lawyers is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Australia Licence.

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