Consumer rights are a worthy and frequent topic of conversation at Enso Legal. We receive frequent enquiries from individuals seeking advice on damaged or defective goods, or issues with services they have received. For the most part, individuals understand that if goods are damaged or “not fit for purpose”, they can be returned and exchanged. Many people do not, however, understand their true legal position which can lead to difficultly if they are met with resistance at the returns desk. 

 

So, who is a consumer?

Currently, the Australian Consumer Law (ACL) defines a Consumer to be a person that has acquired: 

• goods or services which do not exceed $40,000.00; or 

• goods or services which were acquired for personal, domestic or household use or consumption; or 

• goods which consisted of a vehicle or trailer acquired for the main purpose of transporting goods on public roads. 

 

Today, the sum of $40,000.00 is a limited sum of money in a transactional sense. Following the recent Australian Consumer Law Review, a proposal was made to expand the monetary limit of the definition of consumer to ensure continued protection for consumers and small businesses. These changes have been adopted and will come into effect on 1 July 2021. For further commentary on these changes, please see our article “The Evolving Definition of A Consumer – The Time For Review Is Now”. 

There are exceptions to this definition of Consumer, for example, those purchasing goods: 

• for the purposes of resupply; 

• for the purposes of using them up, or transforming them in any process of production or manufacturing; or 

• in the course of repairing or treating goods or fixtures on land.

 

What is a statutory guarantee? 

If you fall within the definition of a Consumer, the ACL imposes certain statutory guarantees on your purchase. Whilst it is important to always read the fine print of the terms and conditions associated with your transaction, it is reassuring to know that suppliers of goods and services cannot contract out of these statutory guarantees. In fact, the law says that if a contract for the sale of goods and services purports to exclude the operation of a statutory guarantee – that term of a contract is deemed to be void. 

The following provides a summary of the statutory guarantees provided by seller of goods: 

1. a guarantee that goods will be of acceptable quality; 

2. a guarantee that goods will be fit for any purpose for any disclosed purpose and for any purpose for which the seller represents that they are reasonably fit; 

3. a guarantee that the goods will match any description given of the goods; 

4. a guarantee that where goods are sold in accordance with a sample or demonstration model, such goods will correspond with that sample or demonstration model; 

5. a guarantee that the seller is the owner of the goods or that it has the legal right to sell the goods to you; 

6. a guarantee that you will have undisturbed possession of the goods; and 

7. a guarantee that the goods will be free from any security, charge or encumbrance except as disclosed to you prior to the purchase of such goods or that which was created with your consent. 

Suppliers of goods are not the only ones on the hook when it comes to statutory guarantees. The ACL provides for statutory guarantees by a manufacturer which include the following: 

a) a guarantee that the goods will be of acceptable quality; 

b) a guarantee that goods will match their description; 

c) a guarantee that the manufacturer will honour any express warranties given; and 

d) a guarantee that the manufacturer will continue to provide repair facilities and spare parts for a reasonable period after the goods are supplied. 

But wait, there is more – the supply of services to a consumer also attracts protection. In this regard, the ACL contains the following three guarantees pertaining to the supply of services: 

• a guarantee that the services will be rendered with due care and skill; 

• a guarantee that the services will be fit for a particular purpose disclosed by the consumer; and/or 

• a guarantee that services will be provided within a reasonable time. 

 

There are exceptions to when these statutory guarantees apply and therefore it is important that you always obtain legal advice promptly if you have any concerns. 

 

What happens when statutory guarantee is breached? 

In short, it depends on whether the breach amounts to a major failure. 

A major failure results from a breach of a statutory guarantee where: 

• a reasonable consumer would not have purchased the goods had they known the nature and extent of the breach; 

• the goods were supplied by description and the goods do not match that description; 

• the goods are substantially unfit for the purpose for which they are commonly used and the problem cannot be easily fixed within a reasonable time; 

• the goods are not fit for the purpose which a consumer disclosed and the problem cannot be easily fixed within a reasonable time; and 

• the goods are unsafe. 

 

A breach that does not meet the above requirements is not a major failure. There will not be a major failure in circumstances where the breach of a statutory guarantee can be remedied. 

When a breach is a major failure, a consumer has a right to have the goods repaired, replaced or refunded. In addition, a consumer may also be entitled to damages or compensation for foreseeable loss arising as a result of the breach. 

When a breach is not a major failure, a consumer is entitled to have the supplier fix the breach within a reasonable time. This may mean repair or replacement. If however, the breach is not fixed within a reasonable time, a consumer is entitled to fix the breach themselves and seek reimbursement from the supplier for any expense incurred. 

Like everything, there are some exceptions to when relief will be available to a consumer. For example, a remedy for breach of a statutory guarantee will not be available where: 

• the breach of the guarantee was solely due to a cause independent of human control; 

• the goods are damaged after being delivered to the customer for reasons unrelated to their condition at the time of supply; 

• the goods have been lost, destroyed or disposed of by the consumer; and/or 

• you simply change your mind. 

Navigating a claim 

Whether you have an action against a supplier or a manufacturer, or both, can be confusing. Further to that, there are time limitations that apply to bringing an action. We recommend that you remain on the front foot and obtain legal advice as soon as possible. 

If you have an enquiry or issue in respect of goods and services supplied to you, or you are a business and wanted to ensure that your terms and conditions comply with the ACL, we are standing by to help you. Enquiries can be made by telephoning our office or filling out the contact form below which will prompt our knowledgeable staff to call you at a time that is convenient.