Australia: Talk the talk, walk the walk’: warranty requirements under Australian Consumer Law

On 16 November 2010 the final Australian Consumer Law (ACL) regulations were published.  One of the key provisions of the ACL is section 54, which is a statutory guarantee of acceptable quality of a good or service enforceable against the suppliers and manufacturers of that good or service. 

In addition, from 1 January 2012 all warranties against defects must comply with the Competition and Consumer Regulations 2010 (the Regulations).  Under these regulations it will be an offence for a company or individual in connection with the supply of goods or services to:

• give a consumer a non-compliant warranty against defects (or a document that evidences one); or
• represent directly to a consumer that a non-compliant warranty against defects applies to goods or services.

The new requirements under the ACL will affect all consumer products which have an express warranty against defects.  If businesses do not comply with the Regulations, they risk making a false or misleading representation to their customers. 

Apart from potential liabilities to consumers at common law, there are also penalties within the legislation.  Corporations can be fined up to $50,000.00 per offence, and individuals can be fined up to $10,000.00 per offence.  Other potential remedies include orders for damages and injunctions. 

To ensure compliance, suppliers and manufacturers should use the time they have until the new warranty requirements come into effect to ensure that their warranties are compliant by 1 January 2012.

What is a warranty against defects?

Under section 102 of the Australian Consumer Law a warranty against defects is defined as

a representation made to a consumer in connection with the supply of good or services, at or about the time of supply, to the effect that a person will (unconditionally or on specified conditions): 

• repair or replace the goods or part of them; or
• provide again or rectify the services or part of them; or
• wholly or partly recompense the consumer;

if the goods of services or part of them are defective, and includes any document by which such a representation is evidenced.

Does this affect my business?

Any business that is involved in providing a good or service to a consumer is affected by these warranty requirements.

Manufacturers and distributors could commit an offence if, for example their advertising material for goods or services referred to a non-compliant warranty against defects.  Manufacturers will need to review and amend all documents that contain warranties against defects, such as warranty cards, advertisements claims, terms and conditions and product manuals, including hard copy and electronic versions.  

Retailers are also at risk of committing an offence since salespeople may give warranty advice to consumers as part of their customer service.   Retailers will also need to make sure the warranties provided by their suppliers comply with the Regulations. 

How to comply

There are requirements in both form and substance, which are specific. 

Should you require assistance to ensure your warranties are compliant, we can provide that assistance.

For more information, please contact:

This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.