A warranty is a voluntary promise offered by a person or business who sold the product or service to you.
When you buy the product or service, the promise becomes a right that can be enforced under the Australian Consumer Law (ACL).
Go to the Australian Competition and Consumer Commission (ACCC) website for information on your rights when things go wrong with products or services bought before 1 January 2011.
Warranty against defects
Some businesses will provide a warranty against defects, also called a manufacturer's warranty. If the goods, or part of them are 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.
A warranty against defects is usually limited by time. 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 consumer buys a deck chair that comes with a written warranty saying the manufacturer will replace the deck chair if it breaks within two years of the purchase date. This is a manufacturer's warranty.
Formal or informal document
A warranty against defects can be a formal written document or informal piece of evidence like wording on the packaging or on a label that contains a promise.
Formal written warranty
A document which evidences a warranty against defects must state:
- what the business will do if the goods are faulty or defective (eg. repair or replace)
- what you must do to be entitled to claim the warranty (eg. cease using the goods or contact the supplier)
- details about the business giving the warranty - name, business address, telephone number and email address (if any)
- the warranty period (ie. how long the warranty lasts for)
- how to claim the warranty (ie. how to contact the business and where to send the claim)
- whether you or the business is responsible for expenses associated with a warranty claim and how you can claim back any expenses incurred
- that the benefits provided to you by the warranty are in addition to other rights and remedies available to you under the law.
A warranty document must include mandatory text to make sure you are aware that any warranty against defects operates in addition to consumers' rights under the ACL. The mandatory text is:
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.
Businesses are free to include extra information in a warranty against defects to explain how your rights under the ACL apply.
Businesses often make extra promises, sometimes called 'express warranties', about the quality, state, condition, performance or characteristics of goods.
Example: A supplier tells the consumer that a bed will last for 10 years. If the bed only lasts for six years, the consumer will be entitled to a remedy because the bed has not satisfied this express warranty.
An express warranty may not be in writing and is a promise usually made to persuade you to buy the goods, it is different to a warranty against defects.
An extended warranty (sometimes known as a 'care package') is an additional warranty that provides repair and maintenance for a specified period. It may or may not extend the manufacturer’s warranty.
Always read the terms and conditions of the extended warranty brochure carefully. The details in the brochure are legally binding so you should rely on what it says, not on what the salesperson says.
An extended warranty does not replace your rights under consumer guarantees. You may still be entitled to a repair, refund or replacement if a consumer guarantee is broken even when a manufacturer’s or extended warranty has ended.
You do not have to buy an extended warranty – it is completely optional. Suppliers risk breaching the law if they:
- put too much pressure on you or use unfair tactics to get you to buy an extended warranty
- mislead you into paying for the rights that you already have under the consumer guarantees.
Extended Warranty Checklist
The following facts should be covered in any extended warranty brochure. To help you decide if the extra money is worth it, run through this checklist.
Important: Always keep your receipts, invoices and warranties in a safe place
Who is providing the extended warranty - a manufacturer, an insurance company or a retailer?
What is the period of the extended warranty
When does the extended warranty start - from the date of purchase or after the voluntary or manufacturer’s warranty expires?
Terms and conditions
Are there any special requirements you need to follow for the extended warranty to be valid? For example, are there requirements for regular maintenance or servicing?
What does the extended warranty cover? For example, does it cover labour and parts?
What are the exclusions or restrictions? Typical exclusions may be transport or freight costs.
Does annual depreciation apply to the product if you replace or refund?
Are there any claim limits?
Are there excess fees for each claim you make?
Where and how do you lodge a claim? You may be restricted to a particular repairer and number of claims you can make.
What is the life expectancy of the product?
Is the product expensive?
Is it likely to break during the period of the extended warranty?
How much does the extended warranty cost in relation to the cost of the product?
Are you planning to move? This may cause problems if you are required to take the product to a particular location for servicing.
Is the extended warranty worth the extra money? Consider whether the statutory and the voluntary warranties will provide sufficient protection.