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Section: SPASA News

SPASA VIC

30 January 2012

This new statutory guarantee cannot be excluded - and essentially provides assurance that the item purchased, or service performed, must remain good for a "reasonable" period of time - pending the price and perceived quality of the good or service purchased.

 
New obligations are placed on everyone selling goods and services to ensure their warranties comply with the new legislation - penalties apply to those that state non-compliant warranty terms.
Warranties against defects
 
As a supplier or manufacturer you may provide promises to consumers about what you will do if something goes wrong with a good or service. These promises are often referred to as voluntary warranties. Under the Australian Consumer Law (ACL), these are called ‘warranties against defects’.
 
It is important to remember that a warranty against defects is provided in addition to consumer guarantees and does not limit or replace them.
From 1 January 2012 if you choose to provide a warranty against defects to consumers then the document you provide evidencing that warranty must comply with specific ACL requirements. Sometimes a business can be considered a ‘consumer’. See 'who will be considered a consumer?' for further information.
Extended, voluntary and express warranties
Sellers, manufacturers and service providers can make extra promises about their goods or services as a way of giving consumers more confidence in their quality, or the level of consumer protection if things go wrong. These promises are known as warranties.
 
If there is a problem with a good or service, the terms and conditions of the warranty generally set out what consumers can claim and how they should go about making a claim.
It is important to remember that regardless of any warranty a business chooses to offer, consumers still have rights under the consumer guarantees. The extra warranty does not alter or limit consumers’ rights under the guarantees, and businesses should be careful that their warranties do not mislead consumers about their rights.
Warranties can be written or verbal and are known by a number of other names.
These warranties can be broadly grouped into two categories, express and voluntary warranties (also known as warranties against defects).
Express warranties
Express warranties are any undertaking, assertion or representation relating to the quality or condition of goods or services, the availability of servicing or parts for the goods or services, the availability of matching goods, which may induce a person into acquiring the goods or services.
 
For example: A department store tells a consumer that a dining set is brand new and unbreakable. This is an express warranty about the condition and the characteristics of the dining set.
Voluntary warranties (also known as warranties against defects)
Voluntary warranties are any promises made by a seller, manufacturer or service provider about what they will do if there is a problem with goods or services, i.e. repair or replace goods or parts, resupply or fix problems with services or provide compensation.
 
The ACL refers to voluntary warranties as ‘warranties against defects’.
A voluntary warranty is essentially a contract between the consumer and the business providing the warranty. As such, businesses may include any requirements in the warranties that do not breach the competition and consumer provision provisions in the Act.
Some common requirements in voluntary warranties are:
Packaging – a consumer may be required to bring goods back in their original packaging in order to claim under the warranty
Warranty cards – consumers may be required to return a ‘warranty card’ to activate a voluntary warranty.
It is important to remember that while businesses may include these requirements in a voluntary warranty, they cannot impose such restrictions on consumers’ rights under the consumer guarantees.
For example: A motor vehicle is sold with a 3 year or 30,000km warranty which outlines what the manufacturer will do if there are certain problems with the vehicle. This is a voluntary warranty.
Extended warranties
Extended warranties are a type of voluntary warranty. Extended warranties generally extend the period of protection given by a voluntary warranty for a cost.
 
Businesses should take particular care when describing and selling extended warranties to ensure that consumers are not misled into thinking that they are required to pay for rights that are already provided by the consumer guarantees.
For example: A computer is sold with a free 12-month warranty given by the manufacturer. The seller advises the consumer that they need to purchase a three year extended warranty, otherwise they will have no right to a remedy after the 12-month warranty period expires.
In this case, the seller is likely to have breached the ACL by advising the consumer that they need to pay for rights provided for under the consumer guarantees.
These – and several other - requirements apply from 1 January 2012, giving businesses time to ensure that their voluntary warranties meet these requirements. See more: http://www.accc.gov.au/content/index.phtml/itemId/958709
The Australian Consumer Law site also makes available an excellent Guide, downloadable here: 
 
 

 

This article is published by Poolside, a leading pool design magazine providing readers with a comprehensive overview of new developments and design directions in the residential market.

Article Tags: statutory guarantee, pool regulations, warranties against defects, extended warranties, express warranties, packaging, warranty card, Australian Consumer law

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