There are nine guarantees that apply to goods. These are:
- That goods are of acceptable quality.
- That goods will be fit for their intended purpose.
- That any description of the goods (for example in a catalogue or television commercial) is accurate.
- That the goods will match any sample or demonstration model and any description provided.
- That the goods will satisfy any extra promises made about them. These are called ´express warranties´.
- The business guarantees they have the right to sell the goods (clear title), unless they alerted you before the sale that they only had ´limited title´.
- That no one will try to repossess or take back the goods, or prevent you from using the goods.
- That goods are free of any hidden securities or charges and will remain so.
- That manufacturers and importers will take reasonable steps to provide spare parts and repair facilities for a reasonable time after purchase.
If goods you supply fail to meet one or more of these guarantees are not met, you will need to provide a ´remedy´ to the consumer - that is, you will need to put right the fault, deficiency or failure. Depending on the circumstances, this may take the form of a refund, repair, replacement or compensation equivalent to the drop in value of the product.
The following clip, which is part of our film on the Australian Consumer Law, explains the consumer guarantees that apply to goods.
You guarantee that goods you supply will be of acceptable quality.
This means that they must be:
- fit for all the purposes for which goods of that kind are commonly supplied - for example, a toaster must be able to toast bread
- acceptable in appearance and finish - for example, a new toaster should be free from scratches
- free from defects - for example, the toaster´s timer should not fall off when used for the first time
- safe - for example, sparks should not fly out of the toaster
- durable - for example, the toaster must function for a reasonable time after purchase, without breaking down.
This acceptable quality test takes into account:
- the nature of the goods - for example, a major appliance such as a fridge is expected to last longer than a toaster
- the price paid for the goods - for example, a cheap toaster is not expected to last as long as a top-of-the-range one
- any statements about the goods on any packaging or label on the goods - for example, the toaster box shows a special defrost function
- any representation made about the goods by the business or salesperson - for example, the supplier said the crumb tray was easy to detach and clean.
The guarantee of acceptable quality does not apply when:
- you alert the consumer to any hidden defects before the sale
- the consumer examines the goods before the sale and did not find defects that they should have noticed
- the consumer uses the goods in an abnormal way.
You guarantee that goods you supply will be reasonably fit for any purpose that you told the consumer that they would be fit for.
A diver buys a watch from you, which you told her would be suitable for diving. A couple of weeks later, the diver goes for her first dive wearing the new watch, only to surface and see the dial filled with water. The watch is not fit for purpose and she would be entitled to a remedy.
A consumer might also want goods to do a specific job or achieve a specific purpose. You guarantee that the product you supply to the consumer will be suitable, if they:
- expressly told you what they wanted to use the goods for, and
- they relied on your knowledge or expertise when deciding whether the goods were suitable for that use or purpose.
A consumer tells you that he wants a car capable of towing his boat. You sell him a car that you believe will do that job. The car´s normal purpose is to transport people but, as the consumer has told you that he wants to use the car to tow a boat, then the car must be able to do so.
The fit for purpose guarantee does not apply when:
- you can show that the consumer did not rely on your skill or judgment when buying the goods
- under the circumstances, it was unreasonable for the consumer to have relied on your skill or judgment (or lack of it).
You guarantee that goods you supply will be accurately described. You cannot argue that the consumer inspected the goods before purchase and should have picked up any errors in the description.
A consumer saw an online advertisement for a t-shirt. The consumer placed an order for a specific colour, but the t-shirt he received was the wrong colour. He would be entitled to a remedy because it did not match the description provided.
The accurate description guarantee does not apply to goods bought at auction.
You guarantee that goods you supply will match the sample or demonstration model and any description provided.
You use a sample of fabric to sell a couch to a consumer, but the couch delivered is a different colour from the sample. The consumer has a right to a remedy.
The match sample or demonstration model guarantee does not apply to goods bought at auction.
You guarantee you will honour any extra promises that you make about the quality, state, condition, performance or characteristics of goods. These extra promises are sometimes called ´express warranties´.
You tells the consumer that a bed will last for 10 years. If the bed only lasts for six years, the consumer will be entitled to a remedy.
You may also provide a ´warranty against defects´ (sometimes known as a ´manufacturer´s warranty´). This type of warranty is different from an express warranty. An express warranty focuses on a promise about what the goods will look like, what they are capable of doing, and for how long. A warranty against defects deals with what the manufacturer promises to do when something goes wrong with the goods.
You guarantee that you have the right to sell any goods that you supply to consumers. This is known as ´clear title´.
Sometimes goods will have a mortgage or security placed on them by someone who is owed money. For example, a bank may have a mortgage over a car whilst the owner is paying it off. If the car is then sold, without having the debt paid out, it has been bought without clear title. If the repayments are not made, the bank may repossess the car to repay the debt, regardless of who owns it.
The clear title guarantee does not apply if you alerted the consumer before the sale that the product you were selling them only had limited title.
You guarantee that no one will try to repossess or take back goods you have supplied to a consumer, or prevent them from using the goods.
The undisturbed possession guarantee does not apply if:
- the consumer does not meet your obligations under the sale, hire or lease contract
- at the time of buying the goods, the consumer was aware that you only had limited title
- before the sale, you told the consumer that another person had a security interest over the goods
- the consumer hired or leased the goods from you, and the hire or lease period has ended.
You guarantee that goods you supply are free of hidden securities or charges and will remain so.
A financier claims to be owed money by the former owner of some goods, who may have used the goods as security for a loan. If the consumer did not know about the outstanding debt when buying the goods, you would have to provide a remedy - for example, replacement goods.
The freedom from hidden securities guarantee does not apply if:
- a security was placed on the goods with the consumer´s permission
- the existing security was brought to the consumer´s attention in writing before they bought the goods.
Manufacturers or importers guarantee they will take reasonable steps to provide spare parts and repair facilities, for a reasonable time after purchase.
A consumer drops his digital camera, which he bought new a year ago for $2000. He contacts the importer and asks where he can get it repaired. The importer advises they no longer supply parts for that model of camera. A reasonable consumer would expect a one-year-old camera to be repairable. The manufacturer has not taken reasonable steps to provide spare parts or facilities, so the importer must provide a remedy.
How much time is ´reasonable´ will depend on the type of goods. For instance:
- it would be reasonable to expect that tyres for a new car will be available for many years after its purchase
- it may not be reasonable to expect that spare parts for an inexpensive children´s toy are available at all.
The spare parts and repair facilities guarantee does not apply if the manufacturer or importer advised the consumer in writing, at the time of purchase, that repair facilities and spare parts would not be available after a specified time.
Last reviewed 01/12/2011