New requirements for warranties against defects

11 August 2011
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As of 1 January 2012, all documents and representations concerning any “warranty against defects” must be accompanied by text and information as prescribed by Regulation 90 of the Australian Consumer Law. A “warranty against defects” is any representation made to a consumer in connection with and around the time of supply of goods or services to the effect that the goods will either be repaired or replaced, the services rectified or the consumer will be compensated if the goods or services are defective.

The prescribed text under Regulation 90 is:

“Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and for compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure”.

The aim of Regulation 90 is to prevent unscrupulous traders from providing insufficient or misleading warranty information to customers. However, given its broad scope, it can potentially catch traders who in good faith, use the words “warranty” or “guarantee” on product packaging, even if only to refer consumers to a website which otherwise complies with the requirements of Regulation 90.

Regulation 90 does not provide a “grace period” for products which were manufactured prior to the commencement of the Regulation but not sold by 1 January 2012. Therefore, any representations on product packaging which are not accompanied by the prescribed text and information from 1 January 2012 may be in breach of Regulation 90.

Accordingly, it may be preferable for traders to adopt a cautious approach and ensure that any references to a “warranty” or “guarantee” on product packaging, websites, receipts and the like are accompanied by the prescribed text and information from 1 January 2012. Alternatively all such references should be removed from all packaging, etc.

Please contact us if you would like further information on the requirements of Regulation 90.

Simon Williams
Principal
Spruson & Ferguson
E: Simon.Williams@sprusons.com.au

Reyahaneh Saadati
Solicitor
Spruson & Ferguson
E: Reyahaneh.Saadati@sprusons.com.au