Grace Period for Compliance with Expression of Manufacturers Warranties

Under the Australian Consumer Law, from 1 January 2012 if a retailer sells a product with a warranty against defects, then the warranty must be expressed in a way that complies with the specific requirements of the Australian Consumer Law.

All documents ‘evidencing' a warranty against defects must be presented in a certain way, and must include specific information to ensure that consumers understand the warranty and know how to make a claim.

In particular, a document evidencing a warranty against defects must include mandatory text to ensure consumers are aware that any warranty against defects operates in addition to consumers' rights under the ACL.

This 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 for 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.

Under the Australian Consumer Law, it is unlawful for a retailer to sell a non-compliant product after 1 January 2012.

However the ACCC has recently announced that this prohibition on the sale of non-compliant product after 1 January 2012, will operate subject to transitional provisions. In this regard the ACCC has issued the following guidance:

The ACL Regulators recognises that transitional practical difficulties may arise in the application of the new provisions. Accordingly, until September 2012, when considering the appropriate enforcement response to any contravention of the warranty against defects requirements that apply to stock in the supply chain manufactured and packaged prior to 1 November 2011, the ACL Regulators will have regard to:

• whether there are serious practical difficulties in updating warranty documents-e.g. the warranty is in a tamper-proof package; and
• whether the supplier (including the retailer) has taken all reasonable steps to otherwise convey the mandatory text and information required by the ACL to consumers-e.g. by placing a compliant sticker on the outside packaging.

In these circumstances the ACL Regulators are unlikely to take enforcement action.

Members are encouraged to read the full ACCC Guidance on Warranties and Defects.

Click here to view the full ACCC Guidance on Warranties and Defects.