09/12/2010

From 1 January 2011, amendments to the Trade Practices Act will commence setting new national consumer laws for all Australian businesses to comply with.  It is important that all businesses are aware of the new obligations placed on businesses who supply to consumers.

A major part of the new laws is the introduction of the “consumer guarantees” relating to the supply of goods or services by Australian businesses.

If supplying goods, the new laws provide for 9 separate guarantees which are summarised as:

1. Guarantee as to title – that is the supplier has the right to sell the goods.
2. Guarantee as to undisturbed possession – that the consumer has the right to possess the goods once purchased.
3. Guarantee as to undisclosed securities – the goods are free from encumbrance.
4. Guarantee as to acceptable quality – the goods are fit for all purposes for which they are commonly supplied, free form defects, safe and durable.
5. Guarantee as to fitness for any disclosed purpose – the consumer informs the supplier of the purpose.
6. Guarantee relating to the supply of goods by description – the goods being purchased must correspond to the description.
7. Guarantee relating to the supply of goods by sample – the goods must correspond to the sample and the consumer has a reasonable opportunity to compare the goods with the sample.
8. Guarantee as to repairs and spare parts – the manufacturer will take reasonable action to ensure repairs and parts are available for a reasonable period.
9. Guarantee as to express warranties – the manufacturer will comply with any express warranty given or made.

(Some of the above warranties do not apply if the goods are purchased at auction)

If supplying services, the new laws provide for 3 separate guarantees which are summarised as:

1. Guarantee as to due care and skill – the services will be rendered with due care and skill.
2. Guarantee as to fitness for a particular purpose - the consumer makes know to the supplier the purpose, the services will be a nature and quality reasonably expected.
3. Guarantee as to reasonable time for supply – the services will be supplied within a reasonable time.

If you have any questions in regard to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.