Types of consumer warranties
A warranty is a voluntary promise offered by the person or business who sells a product or service. Once you buy the product or service, the promise becomes a right that can be enforced under the Australian Consumer Law (ACL).
Warranties are separate from your automatic consumer guarantees, which apply regardless of any warranties suppliers sell or give to you. This means consumer guarantees may continue to apply after the time period for the warranty has expired.
A warranty should protect you from problems with the goods or services you buy. Depending on the type of warranty, it could be a protection that:
- you are legally entitled to access
- you can choose to buy
- a business offers in addition to your automatic legal protections.
Each of these protections is a promise that a business will fix certain problems. This fix is known as your remedy.
Always keep your receipts, invoices and warranty documents in a safe place. These will be your proof of purchase for the goods or services if you need a remedy.
Consumer guarantees
Consumer guarantees protect your rights whenever you buy goods and services. Businesses cannot deny them—they are your legal rights.
If goods or services fail to meet a consumer guarantee, the business must remedy the problem. This will usually be by refund, repair, exchange or repeat service.
Consumer guarantees apply for the reasonable life of the product, even if other forms of warranty have run out.
Read about consumer guarantees for:
Express warranties
Businesses must honour any promise they make about their goods or services. These might be spoken or written claims.
This includes:
- whether the goods or services are of high quality
- what state they are in, and how long this will last
- whether they are in good condition, and how long they will stay like that
- whether they do their job properly, and for how long
- what specific characteristics they have, and how long these will last.
Example
A customer asks a staff member at an electronics store whether a smart TV will be able to run a particular app. The staff member says the TV will be able to run the app, so the customer buys it. When she gets it home, it turns out the TV will not run the app. The store must provide a remedy because the staff member’s representation was an express warranty.
Warranties against defects
A supplier or manufacturer may choose to offer you a warranty against defects, on top of your consumer guarantees. This warranty is a promise that if goods or services provided (or part of them) are defective, they will provide a remedy.
This type of warranty usually comes with a time limit.
The warranty against defects is a promise that if the product/service is defective, the business will:
- repair or replace goods (or part of them)
- resupply or fix a problem with services (or part of them)
- provide compensation to the consumer.
Read about the mandatory information and text a business must include on a written warranty against defects.
All suppliers, manufacturers and service providers that provide you with a warranty against defects must comply with that warranty. If they do not, you may bring an action against the person or business who provided the warranty, either under the ACL or for breach of contract.
Example
A shed builder constructs a shed on a consumer’s property. The contract states that if there is any problem with the shed within 5 years—for example, it starts to leak—the builder will make repairs free of charge. This is a warranty against defects, so the builder must ensure the contract includes the required information and mandatory text.
Extended warranties
A business might offer you an extended warranty. This extends your time to make a claim on an express warranty or a warranty against defects.
Your consumer guarantees may entitle you to a repair, refund or replacement even if a warranty period is over.
Remember, extended warranties are optional. Don’t pay for something that is already your legal right.
A business must be fair and honest about this type of warranty. They are not allowed to:
- put undue pressure on you to buy it
- use unfair tactics to sell it to you
- mislead you about your legal rights.
Example
A consumer buys a $3,000 fridge. The fridge comes with a 1-year warranty against defects, and the consumer decides not to buy a 3-year extended warranty. After 18 months, the fridge stops working. The consumer is entitled to a remedy even though she did not buy the extended warranty. This is because a $3,000 fridge should last for more than 18 months.
What to think about
Make sure you read all the terms and conditions of the extended warranty (which you can find on the document or brochure). These will help you decide if the expected benefit is worth the extra cost.
You should consider:
- whether the goods are expensive
- what the cost of the extended warranty is, compared to the cost of the goods
- how much the value of the goods will decline over time
- how long you would expect the goods to last
- when the extended warranty starts and finishes
- what the extended warranty covers
- whether it lists any special requirements (e.g. regular service or maintenance)
- what exclusions or restrictions apply
- whether you can reasonably take the product to a service location.
Do not decide until you know who provides the warranty. This could be:
- the manufacturer
- the retailer
- an insurance company.
Making a claim
You must meet the conditions outlined in the warranty. If you don’t, you may void the warranty. These conditions might include:
- claim limits
- excess fees
- contact methods
- claim process
- restrictions on choice of repairer.
Compensation for damages and loss
You also have the right to seek compensation if you suffer damages and losses due to a problem with a product or service that the supplier could have reasonably foreseen. This is on top of your repair, replacement or refund rights.
If you want to pursue this option, you will need to see a solicitor for legal advice.