Warranty against defects

Do you offer a warranty against defects in relation to goods or services? It is vital that you are aware of the changes under Australian Consumer Law and include particular wording in your warranty to ensure you comply with the changes.

Remember, even if you do not offer an extended warranty, you may be offering guarantees that cannot be excluded by law!

The following is from the Office of Fair Trading

If you currently:

  • offer a warranty against defects on services you provide; or
  • offer a warranty when supplying goods combined with services,

you must be compliant with some changes coming into effect on 9 June 2019.

A warranty against defects is a representation to a customer that if goods or services provided (or part of them) are defective, you will provide a remedy.

A representation only counts as a warranty against defects if it’s made at the time the goods or services are provided.

For services offered:

If you offer a warranty against defects when supplying services, you will need to display the following mandatory text:

Our 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 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.

For when goods are supplied with services:

If you offer a warranty against defects when supplying goods combined with services, you will need to display the following mandatory text:

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.

There will be no change to the current mandatory text that traders use for warranties against defects when supplying goods alone.

More information

If you need further information, you can visit the Queensland Government site here.

Free Consultation

If you need assistance with any of your business documents, feel free to give us a call or fill out the form below.




Note: Your details are kept strictly confidential as per our Privacy Policy.

Disclaimer
This blog is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.