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Consumer guarantees

Note: On 1 January 2011 the Australian Consumer Law became fully operative. It is contained in Schedule 2 of the Competition and Consumer Act 2010 (previously the Trade Practices Act 1974). It incorporates a single set of consumer guarantees which replace the implied terms in consumer contracts which previously formed part of state, territory and federal fair trading laws.

Part 3-2, Division 1 of the Australian Consumer Law now contains ‘consumer guarantees’ instead of ‘implied terms’. The key guarantees are contained in sections 54 and 55 which provide guarantees as to quality (the term 'acceptable quality' is used instead of 'merchantable quality' which was used in the old implied terms regime) and fitness for purpose respectively. Because they are now classified as ‘guarantees’ rather than ‘implied terms’ they no longer give rise to common law contractual remedies if breached. Instead, a set of remedies are provided by the legislation if the supplier contravenes the guarantee requirement. These remedies, set out in Part 5-4 of the Australian Consumer Law, depend upon the seriousness of the breach – in particular, whether or not the breach constitutes a ‘major failure’. Remedies may include rejection of goods, a requirement that the supplier remedy the failure to comply with a guarantee and damages.

View consumer guarantees in the CCA.

See also: 'Consumer guarantees: A guide for businesses and legal practitioners' (2010)