As from 8 June 2019, a mandatory text is required to be included in any written warranty against defects given to a consumer for the supply of services.
Warranty exclusively for services
To date the requirement has extended to the supply of goods only, however, it is imperative that as from 8 June 2019 any supplier of services who provides a warranty against defects must, in order to comply with the Australian Consumer Law (“ACL”) requirements include the following mandatory text in the terms of its warranty where the warranty is given exclusively for services:
Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled to:
- cancel your service contract with us; and
- a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to be compensated for any other reasonably foreseeable loss or damage. If the failure does not amount to a major failure you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract.
Warranty for the supply of goods as well as services
Where the warranty relates to the supply of goods as well as services the following text is required to be included:
Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
- to cancel your service contract with us; and
- to a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service.”
Exceptions
There are exceptions to the requirement to include the mandatory warranty wording where:
- the services are supplied under a contract for, or in relation to, the transportation or storage of goods for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored.
Note, however, that if the consignee, or the owner of the goods being stored, is not carrying on or engaged in a business, trade, profession or occupation in relation to the goods, the mandatory text must be included.
- the services supplied are under a contract of insurance; or
- the business involves the supply of a gas, electricity and telecommunication service.
Applications
Clearly, the requirement for the mandatory text to be included only applies where the ACL applies, i.e. where a person acquires goods or services for which:
- the price is $40,000 or less; or
- the goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption; or
- the goods comprise a vehicle or trailer for use principally in the transport of goods on public roads.
A person will not acquire goods as a consumer under the ACL if the goods are required for the purpose of resupply or for the purpose of using them up or transforming them in the process of production or manufacture or in the course of repairing or treating other goods or fixtures on land.
The ACL makes provision for both civil and/or criminal penalties to apply where a consumer has been given a warranty against defects that do not comply with the requirements prescribed in the Regulations.
Please do not hesitate to contact us for any further information or clarification of the changes to the ACL that you may require.
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