Advertising and selling guide

Who is liable for what?

The consumer guarantees must be honoured by ‘suppliers’ and ‘manufacturers’.

A supplier is anyone – including a trader, a retailer or a service provider – who, in trade or commerce, sells, exchanges, leases, hires or provides products or services.

A manufacturer is a person or business that makes or puts products together or has their name on the products. It includes the importer, if the maker does not have an office in Australia.

To use the example of motor vehicles:

  1. Suppliers and manufacturers guarantee that motor vehicles are of acceptable quality (ACL section 54).
  2. A supplier guarantees that motor vehicles will be reasonably fit for any purpose the consumer or supplier has specified (ACL section 55).
  3. Suppliers and manufacturers guarantee that their description of motor vehicles (for example, in a catalogue or television commercial) is accurate (ACL section 56).
  4. A supplier guarantees that motor vehicles will match any sample or demonstration model (ACL section 57).
  5. Suppliers and manufacturers guarantee that motor vehicles will satisfy any extra promises – or 'express warranties' - made about them (ACL section 59).
  6. A supplier guarantees they have the right to sell the motor vehicle (clear title), unless they alerted the consumer before the sale that they had ‘limited title’. Note that licensing laws in some states or territories may require motor car traders to guarantee clear title (ACL section 51).
  7. A supplier guarantees 'undisturbed possession' or that no one will try to repossess or take back motor vehicles, or prevent the consumer using them, except in certain circumstances (ACL section 52).
  8. A supplier guarantees that motor vehicles are free of any hidden securities or charges and will remain so, except in certain circumstances (ACL section 53).
  9. Manufacturers or importers guarantee they will take reasonable steps to make spare parts and repair facilities available for a reasonable time after purchase (ACL section 58).

When there is a major failure, the consumer can either:

  • reject the goods and choose a refund or replacement 
  • ask for compensation for any drop in value of the goods.

Where a consumer rejects the goods, he or she must return the rejected goods to the supplier but can ask the supplier to collect the rejected goods if the goods cannot be returned without significant cost to the consumer.

Example: A customer buys a heavy steel bicycle pack-rack online from interstate, gets it in the mail and finds that one key part is missing and another broken. The supplier agrees to provide a replacement but wishes the customer to post the original item back. The postage will be about half the cost of the rack. The customer posts back the rack and the supplier sends out a new rack for free, while also refunding the customer the amount she paid to return the defective rack.

The supplier has complied with their obligations under the consumer guarantees.

Sometimes motor vehicle suppliers have ‘linked credit providers’ – for example, a finance company to which they regularly refer people, under an agreement with that company. These credit providers can be jointly liable with the suppliers under the ACL for the loss or damage someone suffers when that supplier fails to comply with certain consumer guarantees.