MORE changes to the Australian Consumer Law (ACL) effective from June this year will require sellers to include specific wording in the warranty agreement that spells out, in simple terms, consumers’ entitlements and warn that warranties cannot override a consumer’s rights.

Effective from June 8 this year, the Competition and Consumer Regulations 2010 will have to include mandatory text in the warranty that is required to support businesses giving a warranty against defects to consumers for the supply of services, or the supply of goods and services together. Previously the text only referred to goods, not services.

According to HWL Ebsworth Lawyers, the addition of the text is there to “alert consumers to the existence of the ACL and remind consumers and others involved in the transaction that the consumer guarantees set out in the ACL cannot be excluded by the warranty”.

“Previously, the mandatory text was only required to be included where a warranty was given in connection with the supply of goods,” said the legal firm’s partner, Teresa Torcasio, in a statement on the changes.

Ms Torcasio said that from the June date, where a warranty against defects is provided for goods and services together, the following mandatory text must be included in the warranty:

• 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 a 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 services.

The text does not need to be included in relation to services 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.

However, the legal firm said if the consignee of the goods is not carrying on or engaged in a business, trade, profession or occupation in relation to the goods, then the mandatory text must be displayed.

Other exemptions to displaying the text are where the services supplied are under a contract of insurance or where the business may be involved in the gas, electricity or a telecommunications service.

Ms Torcasio said businesses must be aware that civil and/or criminal penalties can apply where a consumer has been given a warranty against defects that does not comply with the
requirements prescribed in the regulations.  

“Businesses providing consumers with a warranty against defects in connection with the supply of services must update their warranty documentation to include the new mandatory text by no later than June 8, 2019, by replacing the mandatory text applying to goods with the new mandatory text applying to goods and services.” Ms Torcasio said.

Further details are available from HWL Ebsworth Lawyers or your legal representative.

By Neil Dowling