How often do we hear the saying – “they don’t make them like they use to”? Have you recently purchased a product only to be disappointed by its quality or durability.
In this article, we take a look at the Australian Consumer Law and the protection it offers to you as a consumer from faulty goods. Traders should also take note so that you are aware of the promises that you make each and every time you sell goods to your customers. In January of 2011, the Federal Government introduced the Australian Consumer Law (ACL).
The ACL, among other things, contains a number of Statutory Guarantees that are designed to protect consumers. The Statutory Guarantees apply to transactions occurring from 1 January 2011 and are not available for goods purchased prior to that date.
The following is a summary of the Statutory Guarantees given by the seller of goods.
A guarantee that the goods will be of acceptable quality.
Example: You purchase a new pair of school shoes for your child, in the first week of school the sole falls off the shoe – you could claim that this a breach of the statutory guarantee.
A guarantee that the goods will be fit for any purpose for which the seller represents that they are reasonably fit.
Example: You purchase a set of table and chairs after explaining to the seller that it is to be used as an outdoor setting. After only six months the table and chairs begin to deteriorate as they are unsuitable for outdoor conditions – you could claim that this is a breach of the statutory guarantee.
A guarantee that the goods will match the description you are given of the goods.
Example: A new black dress that you have purchased online arrives only for you to find that it is grey and not black – you could claim that this is a breach of the statutory guarantee as it does not match the seller’s description.
A guarantee that where a good has been sold to you in accordance with a sample or demonstration model, the goods will correspond with that sample or demonstration model.
Example: You take a car for a test drive and tell the salesman that you wish to purchase a car the same as the demonstration model. Two weeks after you collect your new car you discover that it has a smaller engine – you could claim that this is a breach of the statutory guarantee as it is not the same as the demonstration model.
A guarantee that the Seller is owner of the goods or that it has the right to sell the goods to you.
Example: You buy a second hand car from a private seller only to have car repossessed by the police because it was stolen – you could claim that this is a breach of the statutory guarantee. A guarantee that the Seller will honour any express warranties given to you.
A guarantee that you will have undisturbed possession of the goods.
A guarantee that the goods will not be encumbered except any encumbrances disclosed to you prior to the purchase.
The following Statutory Guarantees are also given by the manufacturer of goods:-
– A guarantee that the goods will be of acceptable quality.
– A guarantee that the goods will match their description.
– A guarantee that the manufacturer will honour any express warranties given.
– A guarantee that the manufacturer will continue to provide repairs or spare parts for a reasonable.
In the event that a good you have purchased does not satisfy the guarantee, you may be entitled to remedies including: replacement, repair, refund or other various remedies.
As in many areas of the law, your ability to seek a remedy from the seller or manufacturer will vary depending on the circumstances of the case.
The above statutory guarantees will apply in the following situations:-
• If the goods you purchased cost less than $40,000.00 (including business purchases eg. Office chair, copiers, computers).
• If the goods purchased are normally used for personal, domestic or household use regardless of the cost.
• Vehicles and trailers used mainly to transport goods are covered irrespective of cost.
• If you receive the goods as a gift. The above Statutory Guarantees will not apply in the following circumstances:-
• Only guarantees relating to title, undisturbed possession and undisclosed securities will apply if the goods were purchased at auction (though all statutory guarantees may apply to online auctions).
• Statutory Guarantees may not apply to the purchase of goods from an overseas website.
• Statutory Guarantees will not apply to goods purchased for re-sale or goods that are to be manufactured into something else to be sold or consumed.
If you purchase a product, and believe that a statutory right has been breached you may be entitled to remedies including a refund, repair, replacement or exchange, compensation or even the cancellation of a contract.
However, the actual remedy that you are entitled to will depend on whether the defect in question is what the legislation refers to as a minor failure or a major failure. A minor failure is a failure that can normally be fixed or resolved in a reasonable amount of time. In the event of a minor failure the seller can elect to offer to you at no charge a refund, replacement or repair. Each of these remedies must be carried out in a reasonable amount of time.
A major failure is a problem that cannot be fixed or are too difficult to fix. When there is a major failure you can elect to return the product and ask for a refund, return the product and ask for an identical replacement, or, keep the product and seek compensation.
A seller cannot contract out of or avoid the application of a statutory guarantee. You may often encounter signs in shops stating “no refund on sale items”, “exchange only” or “no refunds after 30 days”. Regardless of whether or not a seller displays these signs the rights afforded to you under the statutory guarantees are not affected.
In the event that you have purchased a faulty good and you believe that the seller has breached a statutory guarantee what should you do? The first step should always be to discuss your concerns to the seller. You may also wish to explore any complaint procedures or dispute resolution processes offered by many of the larger retailers. If you are not satisfied with the response that you receive we would be happy to discuss how we can assist you in achieving a satisfactory remedy.
The Australian Consumer Law also provides statutory guarantees that relate to services. We will take a look at those provisions next month as well as looking at the effect that the statutory guarantees have on warranties and extended warranties.
