Summary of changes to the Competition and Consumer Regulations 2010 (Cth)
Guarantees for goods
When customers buy goods from a company they are entitled to certain guarantees by Australian Consumer Law which cannot be excluded. Additional to those guarantees a company can give further “warranties against defects” to customers.
When doing that, those companies have to include a certain text in their warranty which is mentioned word by word in the Competition and Consumer Regulations 2010 (Cth). In the past such a text was compulsory for warranties in relation to the supply of goods only.
Regulation 90(2) the text states as follows: ‘Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure’
Previously, similar provisions were not provided for warranties in relation to the supply of services only or both goods AND services. But provisions in the Competition and Consumer Amendment (Australian Consumer Law Review) Regulations 2018 (Cth) which commenced in June 2018 will make similar provisions compulsory when giving warranties for these kinds of matters too.
Warranties for the Supply of Services
When giving a warranty in relation to the supply of services only the warranty will need to include the following text as per regulation 90(3):
‘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
· to 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’
When giving a warranty in relation to the supply of goods and services the warranty will need to include the following text as per regulation 90(4):
‘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 service’
As per regulation 99 “the amendments […] apply in relation to warranties against defects issued on or after the day that is 12 months after the day that Schedule commences”, which is 9 June 2019.
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Disclaimer
This article, approved by Bell Legal Group partner Margaret Miller, was prepared by Magnus Wessels, a German law student currently visiting with Bell Legal Group from his home country. Please note that it is for information purposes only, is not legal advice and nor should it be relied upon as such.