On 1 July 2021, the value of goods covered by the definition of ‘consumer’ under the Australian Consumer Law increased from $40,000 to $100,000. This means that the consumer guarantees will apply to more transactions, including when businesses sell to other business.

What is covered

Businesses must guarantee products and services they sell, hire or lease that are:

  • under $100,000
  • over $100,000 if they are normally bought for personal or household use
  • business vehicles and trailers, provided they are used mainly to transport goods.

There are some exceptions. For example, products purchased to be resold, or to be transformed into a product that is sold, are not covered.

What are consumer guarantees?

Businesses must provide these automatic guarantees regardless of any other warranties. If a product or service fails to meet a consumer guarantee, the consumer has the right to a remedy.

A ‘major failure’ is when a reasonable consumer wouldn’t have bought the product or service if they had known about the nature and extent of the failure. In these cases, the consumer can choose to have a product repaired, replaced or refunded. For a service, they can:

  • end the contract and seek a refund
  • keep the contract and be compensated for any drop in value.

For other kinds of failure, the business can choose the remedy, but it must do so within a reasonable time. Possible remedies include:

  • repairing the faulty good
  • replacing it with an identical good
  • refunding the consumer
  • repairing any defect in the service provided.

Find out more about consumer guarantees and other rules businesses need to follow when treating customers fairly.

Source:  Small Business Information Network