Australia's Consumer Guarantees: What Businesses Must Know

What are Consumer Guarantees?

Consumer guarantees are a set of unalienable rights that consumers automatically receive when they purchase goods or services. They are not to be confused with voluntary 'warranties' offered by manufacturers or retailers. While a warranty may offer additional protections, it can never replace or reduce a consumer's rights under the ACL consumer guarantees.

These guarantees apply to a wide range of transactions, from purchasing everyday items to significant investments like motor vehicles or home renovations. They apply to goods bought from shops, online, over the phone, or through door-to-door sales. The guarantees also extend to services, such as repairs, professional advice, and transport.

Who is a 'Consumer' for ACL Purposes?

Under the ACL, a person is generally considered a 'consumer' if:

• The price of the goods or services was less than $100,000 (from 1 July 2021, previously $40,000); or
• The goods or services were of a kind ordinarily acquired for personal, domestic, or household use or consumption; or
• The goods were a vehicle or trailer acquired for use principally in the transport of goods on public roads.

Importantly, even if the price exceeds $100,000, if the goods or services are of a kind ordinarily acquired for personal, domestic, or household use, the purchaser is still considered a consumer. This broad definition means many business-to-business transactions can also fall under the consumer guarantee provisions, particularly for small businesses acquiring common operational goods or services.

Consumer Guarantees for Goods

When businesses supply goods to consumers, they automatically guarantee that the goods are:

• Of acceptable quality: The goods are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe, and durable as a reasonable consumer would regard as acceptable having regard to the nature of the goods, price, statements, and representations.
• Fit for any disclosed purpose: The goods are reasonably fit for any purpose that the consumer made known to the supplier before purchase, and for any purpose for which the supplier represented they would be fit.
• Match description: The goods match any description given to the consumer, including advertisements, brochures, or statements made by sales staff.
• Match any sample or demonstration model: If the consumer selected the goods based on a sample or demonstration model, the goods supplied must match that sample or model.
• Available for repairs and spare parts (for a reasonable time): Manufacturers (and importers) must ensure that facilities for the repair of the goods and parts for the goods are reasonably available for a reasonable period after the goods are supplied.
• Express warranties will be honoured: Any extra promises made about the quality, performance, or characteristics of goods will be satisfied.
• Supplier has good title: The supplier has the right to sell the goods.
• Undisturbed possession: No one will try to take the goods back (unless arrangements have been made with the consumer).
• Free from undisclosed securities: The goods are free from any undisclosed charges or encumbrances.

Consumer Guarantees for Services

When businesses supply services to consumers, they guarantee that the services will be:

• Provided with due care and skill: The service provider will exercise an acceptable level of skill or technical knowledge, and take all necessary care to avoid loss or damage.
• Fit for any disclosed purpose: The services are reasonably fit for any purpose that the consumer made known to the supplier, and for any result that the consumer made known they wished the services to achieve.
• Delivered within a reasonable time: If no time is set, the services will be finalised within a reasonable period.