All Australian traders, whether online or running a bricks and mortar operation, must comply with existing Australian trading laws. These include provisions dealing with warranties and refunds.
I provide a service...
What are my obligations?
If you are providing a service you are obliged to carry it out with due skill and care. You must also make sure that any materials you provide as part of this service are fit for the purpose.
If you fail to meet any of these obligations, the consumer has the right to have the service repeated, or can seek payment for the cost of having it supplied again by someone else. If you have not provided a service with due skill and care or if the material you have supplied as part of the service is not fit for the purpose, then the consumer may also be entitled to claim compensation for expenses they have incurred as a result, such as loss or damage.
Consumers also have responsibilities when they request services from you. They need to make it clear what it is they want done. If they insist that you perform a service in a particular way or that you use particular materials, you cannot be held responsible if as a result of the specified method or materials the service is unsatisfactory. In these circumstances, you may wish to confirm in writing for your own records that the materials or method were specified by the consumer, and were not advised by you.
The remedies sought by consumers, such as having the service repeated, where you fail to meet the obligations above, are based on contract law. A consumer must seek a remedy within the statutory period of limitation which is set out in various State and Territory legislation.
Can I limit my liability?
You cannot limit your liability for services that you provide for normal household or personal use.
If you are providing a service that is outside this definition for example, you are modifying equipment for a company or manufacturer to on-sell to another user, and the service is valued at less than $40 000 then you may limit your liability to resupplying the service or paying for the cost of having the service resupplied if it is fair and reasonable in the circumstances to do so. You must be sure that the consumer is aware of this before accepting your service.
You may limit liability under contracts for the supply of recreational services, such as sporting activities, by excluding liability for death and personal injury.
You cannot display any signage that might mislead consumers about their rights in relation to services you supply. For example ‘No responsibility for loss or damage’, ‘Goods left for repair at owner’s risk’, ‘All care but no responsibility’ are all likely to mislead consumers.
For further information
Each state and territory has its own legislation in relation to fair trading. You should also contact these agencies for further information regarding your rights and obligations. You will find a link to these in the Consumer & business directory located ont he left-hand side of this page.
When you sell goods you must make certain that they fulfil certain conditions and warranties that are implied under the TPA.
You must be sure that goods:
are of merchantable quality—that is, goods need to reach a basic level of quality given the price of the goods and any description that is provided with the goods
are fit for the purpose or job that the consumer described to you or that are self-evident
match any description or sample given to the consumer whether in promotional material, over the phone, in person, on a website or on labelling or packaging
are free from defects and faults.
You must also be sure that any goods you sell have no debt or financing owed on them so the consumer can have free title to the goods.
If the goods you have sold do not fulfil any of these conditions then the consumer may be entitled to a refund from you on return of the goods. If the goods have been partially consumed the consumer may be entitled to a refund depending on the circumstances and the extent to which the goods have been consumed.
Consumers can choose an alternative remedy to a refund. In these circumstances you may want to offer an exchange, a credit note or to repair the goods.
If the goods being returned have had a fair amount of use then you may be entitled to provide a partial refund only or to repair the product instead. This will depend on the circumstances of the sale and return and if the use of the goods has affected the fault.
You have the right to ask for proof of purchase from the consumer, for example, a receipt or credit record.
You are not obliged to provide a refund, credit or exchange if a consumer has:
changed their mind, decided they no longer want the goods or just don’t like them, or found that goods are the wrong size or colour
found they can buy the same or similar goods elsewhere for a cheaper price
examined goods before buying them and should have seen any fault at that time
had a defect drawn to their attention before they purchased goods, for example, when goods are clearly labelled as seconds or faulty.
A customer needs to approach you regarding a refund in what is called ‘a reasonable period of time’. There is no specific time limit for a refund. A reasonable period of time is determined by a court based on the goods, their use and any other relevant information. Statutory time limits in various state and territory legislation for an action for breach of contract are also relevant.
Can I display a refund sign?
You do not need to display a sign about refunds but if you do, you need to be sure that it does not mislead consumers about their rights. For example you cannot claim ‘No refunds’, ‘No refunds after 7 days’, 'Exchange or repair only', or 'We do not refund’ as these signs are likely to create the impression that consumers have no right to a refund. You can clearly display information that informs consumers about legal limits to refunds.
As a seller you cannot limit your liability for goods that are normally sold or supplied for personal or household use.
You may limit liability if the transaction is of another type, for example, if you are supplying goods that are not for end-use but will be on-sold and the goods are valued at less than $40 000, if it is fair and reasonable in the circumstances to do so. You must, however, make sure that this is brought to the consumer’s attention before they agree to purchase the goods. In these circumstances you may limit your liability from the repair or replacement of goods, to an exchange of goods, or to paying for goods to be replaced.
Can I claim compensation from a manufacturer or importer?
Where goods have breached a statutory warranty, you have the right to claim compensation from a manufacturer or importer.
Companies cannot impose terms or conditions on product returns that attempt to limit or exclude your statutory rights - such as requiring that you return them in original packaging, or with a receipt (as long as you can prove where you purchased the goods). Any attempt to do so may be a serious breach of the Act.
For further information on these provisions you should contact your local Office of Fair Trading, which is listed in our Consumer & business directory on the left-hand side of this page.
For further information
Each state and territory has its own fair trading legislation. You should also contact these agencies for further information about your rights and obligations. Our Consumer & business directory on the left-hand side of this page has an extensive database of agency contacts.
Consumers can claim compensation from you for goods that you have supplied through a retailer or directly to the consumer. Goods that you supply must fulfil certain conditions.
You must make sure that the goods:
are of merchantable quality—that is, they are a basic level of quality given the price and any description that is provided with the goods
are fit for the purpose or job that the consumer described to you or that are self-evident
match any description or sample given to the consumer whether in promotional material, over the phone, in person, on a website or on labelling or packaging
must be free from defects and faults.
These conditions apply to goods that are meant for personal, domestic or household use or are valued at less than $40 000.
If there is a fault that breaches one of these conditions the consumer has a right to seek compensation for loss or damage as a result, such as the cost for the goods to be repaired or replaced.
You are not liable if the fault resulted from incorrect advice provided to the consumer by the retailer.
If the goods you have supplied breach any of the statutory conditions, then a retailer may be able to claim compensation from you. You cannot impose misleading conditions into your contract with retailers to limit your responsibility for the goods you have supplied. For example, stating that the retailer must pay freight for returning faulty goods, or that faulty goods must be returned in the original packaging, is likely to mislead the retailer about their rights and your obligations.
If goods are faulty and as a result someone suffers injury or property is damaged, then consumers have the right to pursue compensation from you if you are the manufacturer.
For further information
Each state and territory has its own legislation in relation to fair trading. You should also contact these agencies for further information on your rights and obligations. Our Consumer & business directory on the left-hand side of this page has an extensive database of agency contacts.
