Section 259 sets out the rights of a consumer to require a supplier to remedy a failure to meet a statutory guarantee in relation to the supply of goods. This means that where goods are faulty (perhaps due to a design or manufacturing problem) a consumer has the right to ask the store to fix the goods. If the fault is considered ‘major’, a consumer has the right to ask for a repair, replacement or refund.

If the failure to meet the guarantee is not ‘major’, the consumer can require the supplier to remedy the failure within a reasonable time. The most obvious example of remedying the failure is to require the supplier to have the goods repaired. What is reasonable depends on the nature of the goods. It may be reasonable to wait for 2 weeks to have clothing or shoes repaired. It may not be reasonable to wait a month to have a fridge or washing machine repaired.

A supplier can also choose to refund or replace the goods, rather than provide a repair.

If the goods are not repaired within a reasonable time, the consumer has a choice to either:

A consumer does not have a remedy against the supplier if the failure occurred because of something that happened after the goods left the supplier, such as accidental damage.

A consumer’s right to claim is not affected by whether the goods are still in their original packaging.

Major Failure to Meet the Guarantee

Section 260 sets out the criteria for a major failure to meet the guarantee. If the goods:

the failure is considered ‘major’.

Section 261 sets out the remedies a supplier can offer, including repairing or replacing the goods or a refund. A consumer has the right to request a particular remedy, but the supplier can choose the remedy.

Section 262 sets out the circumstances in which a consumer is not entitled to reject the goods. This includes:

Goods that are attached to real property or personal property that cannot be removed without damage cannot be ‘rejected’, but the consumer can ask for another remedy such as a repair.

The ‘rejection period’ is dependent on several factors. It may be the type of goods, the use to which they would be put and the amount of time it is reasonable for the goods to be used. Wear and tear is not considered to be a failure of the goods, unless it is caused by some inherent problem that causes wear and tear to happen faster than expected.

Consequences of Rejecting Goods

Section 263 sets out the final step to dealing with goods that fail to meet a consumer guarantee. Once the consumer notifies the supplier that the goods are rejected, the goods must be returned to the supplier. If the goods cannot be easily moved (such as a fridge or large TV) the supplier should collect them at the supplier’s expense.

The consumer has the choice to ask for a refund of the money paid for the goods or a replacement of the goods if section 260 applies (‘major’ failure).

Exceptions

Consumers generally are not entitled to a refund or replacement if there has been a change of mind. However, many retailers will allow a consumer to return goods that are unsuitable, provided that the goods have not been used or damaged in any way. There may also be a requirement that the goods are in the original packaging or retain any labels or tags.

Action against a Manufacturer

When a statutory guarantee for either goods or services has not been met, a consumer usually takes action against a retailer or supplier. If a supplier refuses to provide a remedy, cannot be contacted or is no longer trading, a consumer can also act against a manufacturer. Section 7 defines manufacturer as a business who makes or assembles goods, has their name on goods or imports the goods into Australia.

Section 271 sets out the rights of a consumer to act against a manufacturer where goods are not of acceptable quality, or do not match a description that is applied by the manufacturer.

Section 271 (6) states that a consumer who relies on an express warranty to require the manufacturer to replace or repair the goods cannot then claim damages for the failure to honour the statutory guarantee in relation to acceptable quality. However, a manufacturer cannot refuse a remedy if there has been a breach of the statutory guarantees, regardless of whether the goods are covered by an express warranty.

The guarantees regarding spare parts and repairs set out in section 58 of the ACL is a specific guarantee given by a manufacturer.