Consumer guarantees: Why manufacturers and suppliers have to meet our expectations

by The FindLaw Team

The Australian Consumer Law (ACL) guarantees that when suppliers or manufacturers conduct business with us, mandates that we are to be treated fairly in the commercial transaction, and that our expectations are met in regards to the products or services purchased. One of the positive aspects of the consumer guarantees under the ACL, is that the guarantees applies throughout all jurisdictions within Australia, and imposes a strict liability on all suppliers and manufacturers of goods and services – signifying the seriousness in which the ACL treats consumer guarantees.

An introduction to consumer guarantees

As noted in the introduction, a manufacturer or supplier who is found to be in breach of the Consumer Guarantees regime, will be deemed to have committed a strict liability offence.

By imposing a strict liability on suppliers and manufacturers, means that a breach may be committed without negligence. The overarching reasoning for making consumer guarantees a strict liability offence, is to ensure that the consumer’s expectations will be met by the supplier or the manufacturer, and if a retailer fails to meet the consumer guarantee provisions, then there is no need to find who was at fault in the supply chain, but rather it is the supplier or manufacturer who will be held liable.

Which goods and services are protected, and excluded by consumer guarantees?

The consumer guarantees can be found in Part 3-2, Division 1 of the ACL, and bestows the following guarantees towards the consumer: title; undisturbed possession; and undisclosed securities – all of which is applied to all purchases.

However, the following guarantees only relate to goods or services supplied “in trade or commerce”:

• guarantees as to acceptable quality
• fitness for purpose
• compliance with description
• supply by way of sample or demonstration model
• repairs and spare parts
• compliance with express warranties.

One of the more important things that visitors to FindLaw should be aware of, is that consumer guarantees are not applicable to private sales. So in the event that one person happens to sell a car to another via a classified ad, that transaction will usually not be covered by the consumer guarantee.

Exclusions for goods bought in auctions – either physically or online – will also generally be excluded from consumer guarantees. However, guarantees relating to title, undisturbed possession, and undisclosed securities are still applicable, regardless of whether the goods were purchased via an auction. Additional exclusions are applied if a purchaser has acquired the goods:

• for the purpose of re-supply
• for the purpose of using the goods up
• for the purpose of transforming the goods in trade or commerce.

Alternatively, for services to fall under the auspices of the consumer guarantees under the ACL, the service provided for must not exceed $40,000, and it must be deemed to be a consumer service as outlined within the ACL. However, if a service exceeds the $40,000 threshold, then the service must have been acquired for personal, domestic or household use or consumption.

However, the following services will generally not fall under the consumer guarantee provisions:

• financial services (excluding linked credit contracts which are covered under the ACL)
• services provided by architects and engineers
• transportation or storage services
• contracts for insurance
• telecommunications
• gas and electricity
• suppliers of recreational services which limits their liability due to death, physical or mental injury – but not for property loss.

Generally speaking, the services which are not covered by the consumer guarantees, will usually have their own oversight body in which the public will be able to utilise if there is any issue.

Conversely, retailers who are contracting with consumers directly for the supply of electricity, must still provide a service that is of acceptable quality, and that the service will be supplied with due care and skill.

Gifts are protected by consumer guarantees

Section 266 of the ACL, affords the same protections to recipients of gifts, as it would to consumers. Therefore, a new or used motor vehicle which has been purchased as a gift for a loved one, can also be protected by the consumer guarantees if the vehicle is used for personal and domestic purposes.

Purchasing a good or service that falls short of our expectations can be disheartening, and If you feel that the good or service you have purchased did not meet an acceptable standard, please seek the appropriate legal assistance.



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