Australian Consumer Law Reform – New consumer guarantee laws

Since 1 July 2010, a national unfair contract terms regime has been in place for all standard-form contracts with consumers. These laws were part the first phase of the “Australian Consumer Law” (ACL) reforms, a process designed to establish national, uniform consumer laws.

More recently, Federal Parliament has passed additional ACL laws this time regulating the manufacture, sale and supply of goods to consumers.

For many years various consumer protection conditions and warranties have been implied into contracts with consumers by the Commonwealth Trade Practices Act and various state and territory fair trading laws exists. These laws typically required all products supplied to a consumer must be fit for the purpose for which they were supplied as well as some other common warranties such as:

• The goods match their description;
• The goods, if sold by reference to sample or demonstration model, correspond to the sample or demonstration model;
• Spare parts and facilities for repairs of the goods are available for a reasonable period. 

Under the ACL reforms these warranties will now apply as uniform statutory consumer guarantees that apply throughout Australia.   

The ACL also introduces a new consumer guarantee requiring that a good must be of an “acceptable quality”.

Under the guarantee, goods will be of an acceptable quality where they are fit for all the purposes for which goods of that kind are commonly supplied, acceptable in appearance and finish, are free from defects, safe and durable.

In determining acceptable quality the above elements are to be considered from the point of a “reasonable consumer” who is fully acquainted with the state and condition of the goods and the nature of the transaction including the price of the good and any representations made about the good by the supplier or manufacturer.    

The ACL also provides that any “express warranties”, which is defined to include all pre-contractual statements about the nature of the goods, will have the effect of a consumer guarantee. It is important for manufacturers, suppliers and importers of goods to ensure the accuracy of pre-contractual statements concerning the goods. HIA recommends that all members review their current express warranties against these new laws.

In the event that goods or services fail to meet these guarantees, the legislation sets out remedies available to consumers including refunds, repairs and replacements. Damages are also available against the supplier and manufacturer in certain circumstances.

Importantly, the ACL provides that these new consumer guarantees cannot be excluded by contract and term in a contract that purports to do so is void.

The ACL also renames the Trade Practices Act as the Competition and Consumer Act 2010.

The new consumer guarantee laws commence on 1 January 2011.

Contact your HIA Workplace Adviser on 1300 650 620 for more information.

_{DISCLAIMER – the above is intended to provide general information in summary form. The contents do not constitute specific advice and should not be relied upon as such. Formal specific advice should be sought by members with respect to particular matters before taking action.}