IS
MY WARRANTY CLAUSE
WORTH ANYTHING!
A warranty within the terms and conditions of trade is a contractual promise that the manufacturer or supplier of the goods will for a period of time stand by the quality of the goods manufactured or supplied.
The extent to which a warranty is in addition to the warranties imposed on goods under the Sale of Goods Act, 1919 and goods and services under the Trade Practices Act, 1974 ("TPA") depends on what is written in the warranties. Indeed written contractual warranties often purport to give to buyers less protection than those imposed by these two statutes.
The statutory warranties require goods and services to perform to the standard that one would expect in relation to their price and the way they were described. The statutory warranties do not have a time limit. The Australian Competition and Consumer Commission ("ACCC") has stated that the duration of the trade practices warranties depend on the product's price and the amount of use and the manufacturer's customers service policy.
For instance, the ACCC says that a consumer may be entitled to a refund if a television built to last 10 years develop a series of faults after 12 months. The ACCC on the other hand says that consumers should consider themselves lucky to get 2 years out of a $10.00 watch from the chemist.
What happens if a product breaks after a month after the warranty period set out in a contractual warranty clause?
As the contractual clause is additional to the implied statutory obligations (where they exist), the effect of the expiration of the contractual clause does not affect the statutory warranty provisions.
However, the Consumer Law Centre has been reported as saying "90% of the people won't pursue a claim outside the warranty period, as they believe that their rights have expired". Many people pay for expensive repairs that are actually covered by the "implied" warranty period under the TPA.
Is the company bound to warranty provisions?
Essentially as the promises made in a warranty are those which you are making yourself the answer is yes.
Can a person demand a refund or must they have the goods repaired or resupplied?
The answer depends upon whether the goods or services being supplied are within the definition of consumer goods for the purposes of the TPA.
The implied statutory warranties cannot be excluded by contract for consumer transactions. However, for non-consumer transactions the statutory warranties can be modified so that the manufacturer or supplier has at their option the right to resupply the goods or services again and limit their liability for damages to the costs of the goods or service provided.
For consumer transactions the implied statutory warranties cannot be removed. Any or all losses that naturally flow from the breach of the contractual or implied warranties are recoverable by the consumer.
If I am a supplier and the manufacturer has provided a warranty do I owe any obligations to consumers? The answer is yes. Suppliers still owe contractual obligations to consumers. These obligations may be in parallel with manufacturers but a supplier cannot simply fob off complaints of customers by telling them to talk to the manufacturer. The supplier and the manufacturer are required to join forces to help consumers out of any difficulties they may have.
Despite the limitations of warranties our recommendation is that a warranty clause always be included in terms and conditions of sale.
What are the implied statutory warranties?
The seller must be able to give you clear title to goods, including those bought at auction. Legal restrictions on ownership must be fully and clearly explained before sale.
Goods must be of merchantable quality. This means that although the goods do not have to be perfect, they should be able to do their job properly. For instance, a shoe should not lose a heel the first time you wear it. A car should not be riddled with rust, but a loose door handle or a badly fitted car would not make it unmerchantable. Obviously, the price paid is important too. You cannot expect top quality for well used second hand goods or ones that are very cheap including marked seconds.
Goods must do the job that you told the seller you wanted them for or that it is clear from the circumstances of the sale. For instance, if you purchase a shirt and when you take it out of the packet it is stained, it is obviously not fit for the job you require of it, that is, it is not able to be worn.
Goods must be described by the seller or on the label of packaging, in mail order catalogues or in self service stores.
Goods must match any description the seller shows you.
Goods are not to be sold with hidden defects. A hidden defect is one that cannot be found from an obvious examination of the goods. A consumer is not obliged to examine goods before purchase but it is a good idea.
A manufacturer or importer must make sure that reasonable supplies, spare parts and repair facilities are available for goods that normally require them unless the consumer is told otherwise before the time of purchase. (This implied warranty applies only to consumer transactions).
For those types of goods a manufacturer or an importer must stand by their warranty or guarantee. Manufacturers or importers must also stand by any claims made in brochures, in advertising, or by sales staff about the quality, performance or characteristics of goods sold. The supplier must also stand by their promises about future availability of services or replacement of parts and spare parts.
The services must be carried out with due care and skill and in a workmanlike manner. For instance, carpet cleaners are responsible for making sure the carpet does not shrink.
Any material supplied with services should be reasonably fit for the purpose for which they are supplied.
Any services or material supplied with them must do the job you want.
As a general rule, if you pay for expert service or advice you should get it in a professional and expert manner.
(Article by S J Brown of Colin Biggers & Paisley, our Advoc associate in Sydney)