Providing services to consumers

N.B. The consumer guarantees apply to goods and services purchased from 1 January 2011. Information on your obligations for goods and services purchased prior to this date can be found on the warranty and refund pages.

Consumer guarantees on services

Service providers must carry out all services using an acceptable level of skill and/or technical knowledge. Service providers must also take reasonable steps to avoid loss or damage when providing the services.

Example
A consumer goes to a hairdresser and asks for a cut and colour. The hairdresser accidentally uses peroxide instead of the consumer’s desired colour and bleaches their hair.
In this case the hairdresser has not used care and skill when colouring the customer’s hair.

Fit for specified purpose

Services, and any good resulting from the service, must be fit for any purpose or achieve any result that you represented to the consumer prior to them agreeing to the services. Services must also be fit for any purpose or achieve any result that the consumer made known to you prior to agreeing to the services. Consumers can make their purpose known either expressly—by saying what they want to use the good for—or the purpose can be implied from the circumstances.

Example
A consumer contracts with a gardener to landscape their backyard. The consumer explains to the gardener that they want to leave sufficient space to build a swimming pool in the backyard. The gardener ignores this and plants a number of expensive trees throughout the garden and creates a tiled gazebo in the centre.
In this case the landscaping does not achieve the result that the consumer made known to the gardener.

If the consumer did not mention that they wanted to build a swimming pool the services are likely to have achieved their desired result.

Reasonable time

If the contract does not specify a time frame for the services to be completed, services must be completed within a reasonable time. What is ‘reasonable’ will depend on the type of services and other relevant factors such as weather and availability of parts.

Example
A plumber agrees to fix a consumer’s pipes. The consumer and the builder agree verbally on a price but do not discuss how long it will take to complete the repairs. The plumber starts the repairs but then does not come back to the consumer’s house for over a fortnight.
In this case, the repairs were not completed within a reasonable time.

What happens if a consumer guarantee is not complied with?

If a service provider does not meet any of the guarantees listed above, the consumer is entitled to a remedy—either fixing the problem with the services, a refund or compensation for any drop in value from the original price paid—depending on the circumstances.

Generally, a service provider will be able to fix the problem with the services. However, if the problem is major or cannot be or is not fixed within a reasonable time, the consumer may choose to:

  • terminate the contract for services and obtain a full refund; or
  • seek compensation for the difference between the value of the services provided compared to the price paid.

Major failure

A major failure to comply with a consumer guarantee is one where a reasonable consumer would not have agreed to the services had they known of the full extent of the problem.

Example
A consumer contracts with a printing business to have an assignment laminated and bound the day before it was due. The laminator overheats and discolours the assignment so that the consumer cannot submit it.
This is a major failure and the consumer would be entitled to terminate their contract with the printer and obtain a full refund.

Recreational services

A ‘recreational service’ is one where someone participates in:

  • a sporting activity or a similar leisure pursuit
  • any other activity that involves a significant degree of physical exertion or physical risk, for recreation, enjoyment or leisure.

Examples of recreational services are forms of sport such as fitness training, horse riding, sky diving, bungee jumping and paintball.

Under the ACL and some state and territory fair trading laws, suppliers of recreational services can exclude, limit or modify liability when they do not meet the consumer guarantees to provide services:

  • with due care and skill
  • fit for any particular purpose
  • within a reasonable time (when no time is set).

You may only limit their liability for death or personal injury, including illness (mental or physical), but not for property loss.

You will need legal advice to establish whether you can limit your liability.