Supporting examples for Warranties against defects under the Australian Consumer Law (ACL):
A consumer purchases a motor vehicle that comes with a three year or 100,000km written warranty outlining what the manufacturer will do if there are certain problems with the vehicle. This is a warranty against defects and must comply with the requirements of the ACL.
A consumer hires a tiler to renovate his or her bathroom. The contract states that the tiler will repair any tiles that become loose within five years of the tiling being carried out. This contract contains a written warranty against defects and the tiler must ensure that the document complies with the requirements of the ACL.
A manufacturer of electric drills includes a representation on the drill packaging that it will repair any drill if a fault arises within three years of purchase. As this is a representation about what the manufacturer will do if a drill is defective, the packaging is a document evidencing a warranty against defects, and all the information required by the ACL would need to be set out on the packaging itself. However, if inside the package there is a separate warranty document containing all the information required by the ACL that is not inconsistent with the statement on the packaging, the ACL Regulators will regard this as compliance with the warranty against defects requirements.
A consumer purchases an air conditioning unit and has it installed in their home. The unit was sold with a written warranty that the manufacturer would replace the unit if anything went wrong within the first two years of purchase. This is a document evidencing a warranty against defects.
As part of the warranty against defects the manufacturer must provide all the information required, in particular the procedure for the consumer to claim the warranty and who will bear the expense of claiming the warranty. Given the logistics of returning the unit it is important for the manufacturer to set out what the consumer needs to do to claim their warranty—e.g. contact the manufacturer to come and inspect the good and remove the good, and set out who will bear the expense of claiming (expense of transportation, removal etc).
- A mobile phone manufacturer provides a warranty against defects on the packaging that it will repair the phone if any fault arises within one year of purchase. The packaging must therefore also outline all the prescribed requirements and must be expressed clearly and legibly.
- A business sells hand painted goods and provides on a warranty card that it will replace any goods within one year if the paint starts to fade. The business refers consumers to its website for further information. This is likely to breach the ACL. In order to comply with the ACL the business must provide consumers with all the prescribed requirements on the warranty card rather than referring consumers to its website for further information.
A consumer purchases a laptop computer with a written warranty against defects that states the manufacturer will replace or repair the computer if any fault arises within 12 months of purchase. If the laptop breaks down after 18 months, the manufacturer cannot automatically advise the consumer that he or she has no entitlement to a remedy as the warranty has expired. The consumer may still be entitled to a remedy under the consumer guarantees imposed under the ACL.
A consumer purchases a bread maker. The bread maker comes with a warranty against defects clearly specifying all the requirements of the ACL and outlining that the manufacturer will repair or replace the bread maker if it becomes faulty within two years of purchase. The sales representative verbally confirms that the bread maker will be replaced if it becomes faulty within two years of purchase.
After 18 months the bread maker becomes faulty and the consumer contacts the manufacturer to claim the warranty, only to be told that the manufacturer does not need to comply with the warranty.
Although the manufacturer has complied with the ACL by providing the necessary information in the warranty document, they are likely to have engaged in misleading or deceptive conduct by falsely representing that there is a two year warranty and then refusing to honour this warranty.