If you run a business that supplies goods to a “consumer” within the meaning of the Australian Consumer Law (ACL) and you also provide an express warranty against defects in respect of those goods, then you will be aware that the ACL imposes mandatory wording that must accompany that warranty.
New Requirements
Changes to the ACL now mean that if you supply “services” or “goods and services” to a “consumer” within the meaning of the ACL and you provide an express warranty against defects in respect of same, then new mandatory wording applies.
Mandatory Wording – Services
The new mandatory wording is:
Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the services, you are entitled to cancel your service contract with us and to a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to be compensated for any other reasonably foreseeable loss or damage. If the failure does not amount to a major failure you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract.
Mandatory Wording – Goods and Services
The new mandatory wording is:
Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled to cancel your service contract with us and to a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or a service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service”.
Exceptions
If your business provides services under a contract for transportation or storage of goods for the purpose of a business, trade, profession or occupation carried on or engaged in by your customer or it is a contract of insurance, then these new requirements do not apply.
Fines
Amongst other sanctions that can be imposed on businesses for non-compliance and persons involved in the contravention, a business is exposed to a fine of up to $50,000 for not complying with the new requirements.
Key Takeaways
In summary:
- ensure your terms of trade/warranty documentation meet the new requirements relating to services or goods and services
- check your terms of trade/warranty documentation meet the already existing requirements relating to goods
- update your terms of trade/warranty documentation if they are otherwise in need of revision such as to ensure they match what you do in practice and are compliant with all other laws such as privacy laws and other provisions of the ACL
More Information
Please contact our commercial law team at Matthews Folbigg Lawyers on 9635 7966 if you require legal advice on the ACL, your terms of trade/warranty documentation or assistance with any other commercial matter relating to your business.
