What is a manufacturer’s warranty?

What is a manufacturer’s warranty?

Consumers are protected under the Australian Consumer Law (ACL) by the Consumer Guarantees.  These Consumer Guarantees include a guarantee that goods be of “acceptable quality”, that is, that they are fit for the purpose for which they are commonly used, safe, durable and free from minor defects.

Manufacturers can provide a ‘Manufacturer’s Warranty’, which operates in addition to the Consumer Guarantees.  For example, some cookware may have a lifetime warranty on the Teflon coating which will result in the manufacturer replacing the cookware even after a number of years.

However, it is important to note that this warranty does not replace the Consumer Guarantees and consumers may still have rights under the Consumer Guarantees.  In fact, it is against the law for businesses to exclude consumer rights under the Consumer Guarantees.

For example, if the handle had broken off the cookware within a short period of purchasing the item, it would be considered a ‘major’ failure under the ACL.  Under the Manufacturer’s Warranty, the consumer may only be entitled to a repair or replacement.  However, under the ACL, they would be entitled to a refund.

Do manufacturers have to disclose that the ACL may still apply?

This question was posed in ACCC v LG Electronics Australia Pty Ltd [2017] FCA 1047, where the ACCC claimed that LG had misrepresented to consumers that remedies available to them were limited to their manufacturer’s warranty as they did not disclose to consumers that they were also entitled to a refund under the ACL.  The Federal Court stated that there was no obligation to disclose the existence of the ACL and nothing suggested LG’s manufacturer’s warranty purported to exclude the Consumer Guarantees.

However, the ACCC is appealing this decision to clarify whether this is the case and the extent in which manufacturers have to disclose that the ACL may apply.

If you need advice regarding your consumer law obligations or would like us to draft you a returns policy tailored to your business, whether you are a manufacturer or retailer, please don’t hesitate to contact me at  or call me at 1300 033 934 for a no-obligation quote.

Source: ACCC; Timebase.