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Standard fact sheet.
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Large print fact sheet.

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Guarantees on goods when selling 

Consumer guarantees 

Whether you have to provide a refund, repair, replacement or other compensation to a consumer for problems with goods depends on whether you have met consumer guarantees set by Australian law.

What you cannot tell a consumer 

You must not tell a consumer that a consumer guarantee:

  • does not exist
  • may be excluded, or
  • may not have a particular effect.

You also must not tell a consumer that they are required to pay for any rights equivalent to a consumer guarantee.

Consumers cannot surrender their rights by agreeing that the consumer guarantees do not apply.

The maximum civil penalty for providing false or misleading information is $1.1 million for a body corporate and $220,000 for an individual. Criminal penalties for the same amounts may also be imposed.

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Which goods are covered? 

Goods are covered when sold in trade or commerce and bought by a consumer. Second-hand, leased or hired goods are also covered.

Some consumer guarantees apply regardless of whether the goods are sold in trade or commerce – these are the guarantees that a consumer is buying goods:

  • with a clear title, unless told otherwise before the sale
  • with a right to undisturbed possession – no-one has a legal right to take the goods away or prevent them from using the goods
  • that do not carry any undisclosed securities – the goods do not have any hidden securities or charges.

'Trade or commerce' means in the course of a supplier’s or manufacturer’s business or professional activity, including a non-profit business or activity.

A consumer is a person who buys:

  • any type of goods or services costing up to $40,000, or any other amount set by the Australian Consumer Law in future – for example, a photocopier or cash register
  • a vehicle or trailer used mainly to transport goods. The cost of the vehicle or trailer is irrelevant
  • goods or services costing more than $40,000, which are normally used for personal, domestic or household purposes – for example, a car or landscaping design.

Australian courts have said that the following goods are not normally used for personal, domestic or household purposes:

  • an airseeder (Jillawara Grazing Co v John Shearer Ltd (1984) ATPR 40-441)
  • a large tractor (Atkinson v Hasting Deering (Queensland) Pty Ltd (1985) 6 FCR 331)
  • a reduction photocopier (Four Square Stores (Qld) Ltd v ABE Copiers Pty Ltd (1981) ATPR 40-232 at 43,115).

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Which goods are not covered? 

Goods not covered by consumer guarantees include those:

  • bought before 1 January 2011. These are covered by statutory implied conditions and warranties under the Trade Practices Act 1974 and State and Territory legislation in force before 1 January 2011
  • bought from one-off sales by private sellers, such as garage sales and fêtes
  • bought at auctions, where the auctioneer acts as agent for the owner
  • costing more than $40,000 that a person would normally buy for business use – for example, machinery and farming equipment
  • a person buys to on-sell or re-supply
  • a person wants to use, as part of a business, to:
    • manufacture or produce something else – for example, as an ingredient
    • repair or otherwise use on other goods or fixtures.

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What consumer guarantees apply to goods? 

Both supplier and manufacturer guarantee that goods:

  • are of acceptable quality – they will be safe, durable and free from defects. They will be acceptable in appearance and finish, and do the job that type of thing is usually used for
  • match any description given to the consumer
  • match the sample or demonstration model.

A supplier also guarantees the consumer is buying goods:

  • fit for any disclosed purpose – the goods will do the job the consumer was told they would
  • with a clear title, unless the supplier told the consumer otherwise before the sale
  • a right to undisturbed possession – the supplier promises no-one has a legal right to take the goods away or prevent the consumer from using the goods
  • that do not have any undisclosed securities – the goods do not have any hidden securities or charges.

A manufacturer guarantees repairs and spare parts.

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Displaying signs about the consumer guarantees 

You can display a sign, at the point of sale, alerting consumers to their rights under the consumer guarantees – even if your business is online.

Consumer protection agencies have developed a standard sign but you may create your own.

It is not compulsory to display a sign but the Commonwealth Minister responsible for administering the Australian Consumer Law can make it mandatory. The minister can specify the content, size, form and position of the sign, to ensure consumers notice it.

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