As consumers dealing with tradespeople, we’re reliant on the guarantee that they have the necessary skills and technical knowledge to perform the work undertaken, and that our expectations as customers will be met. However, there may be an instance when the work done fails to meet the wishes of a consumer, and in such a scenario, an understanding of the rights and remedies available under the Australian Consumer Law (ACL) may assist in alleviating any potential difficulties associated with a failure to meet a service guarantee.
What is covered in a service guarantee?
Services up to $40,000 are covered by the ACL irrespective of the type of work done. Service costs greater than $40,000 only covers work that is performed for a personal or domestic purpose. Keep in mind that expenses related to business activities greater than $40,000 are not covered in the ACL.
The ACL requires that the services provided by tradespeople will be:
• done with due care and skill
• fit for a particular purpose
• completed within a reasonable amount of time.
The overarching purpose of the law of service guarantees is to ensure that the tradesperson will avoid causing loss or damage in the performance of their service, and that the desired result will be achieved. For example, a customer may wish to have the outside of their house painted with white, weatherproofed paint within seven days, and hires a painter to complete the task.
However, when the tradesperson uses a brown coloured paint, meant for indoor use, and takes 14 days to finish the job, the painter may have failed their service requirements under the ACL.
What happens when a service does not meet a consumer guarantee?
Failure to meet a service guarantee allows a consumer certain remedies depending on whether the failure was minor or major.
Part 5-4 of the ACL considers a failure to comply with a guarantee as major if:
• a reasonable consumer would not of acquired the service if they were fully acquainted with the nature and extent of the failure
• the service was substantially unfit compared to its normal purpose, and cannot be easily fixed within a reasonable time period
• the service did not meet the specific result requested by the consumer and cannot easily be fixed within a reasonable time period
• the supply of the service has created a dangerous situation.
For failures that are major, a consumer can cancel the service contract and receive a refund from the supplier as a remedy. Alternatively, a consumer can still keep the contract, and receive compensation for the difference in the service delivered, and what was paid for performance of the service.
An agreement can be cancelled at any time, provided that the tradesperson was informed either verbally or in writing. If a contract is cancelled, the consumer has a right to a refund dependent on the overall unsatisfactory nature of the service.
For minor problems, a consumer can request the problem be fixed free of charge and within a reasonable time. If the tradesperson refuses – or takes too long – a consumer may cancel the contract and receive their money back. If another tradesperson is commissioned to fix the problem, a request to pay reasonable costs can be made under the ACL. Please note, that a service contract cannot be cancelled for a minor problem before the tradesperson was informed, and given an opportunity to remedy the situation.
If, as a consumer you have a service problem that cannot be easily resolved, please seek the appropriate legal advice.