Giving in to the nostalgia of Back to the Future, ‘Hoverboards’ have been a trend and many retailers have joined in on the craze. However, an interim ban has been issued for unsafe hoverboards that do not meet safety standards and retailers must have their hoverboards tested under the standards.
As a supplier of hoverboards, here are some takeaways from this ban:
- Ensure that you are taking steps to have the hoverboards tested for safety under the standards. You must be active in taking steps to determine whether the hoverboards meet these standards.
- Confirm with customers that this testing is taking place – otherwise, the customer is entitled to a refund. Confirmation that the hoverboards meet the safety standards must occur “within a reasonable time”.
- If the hoverboard is found not to meet safety standards and is not of ‘acceptable quality’, you must either have customers return the product or dispose of it and refund the money. If you choose to have customers return the product, you must cover the cost of shipping and transportation.
- Seek indemnification from your manufacturer of any costs incurred as a result of the product not being of ‘acceptable quality’ under the ACL.
- Check that your supply contract allows for the return of stock that is not of ‘acceptable quality’.
This ban highlights the importance of having a good supply contract that covers quality issues in the case where a product is found to be unsafe. Ensure that your supply contract allows you to return the goods if they are not delivered in accordance with specifications or if they are defective or don’t comply with safety standards. It is also helpful to ensure that you may be indemnified of costs from your manufacturer in contract, even though this right is also provided by the ACL, so that you are both aware of your rights.