The Australian Consumer Law (ACL) gives consumers automatic, non-excludable statutory guarantees. When there's a 'major failure', the consumer — not the retailer — chooses the remedy: refund, replacement, or keeping the goods and claiming compensation. Despite how clear the law is, retailers routinely put clauses in their contracts that attempt to cap the remedies, force warranty repairs, or send consumers to the manufacturer. Almost all such clauses are void under s.64 ACL.
What is a Major Failure Remedies?
The Australian Consumer Law is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth). It imposes consumer guarantees including acceptable quality, fitness for purpose, and matching description. A 'major failure' under s.260 ACL is where: a reasonable consumer would not have acquired the goods had they known about the failure; the goods depart substantially from the description; the goods are substantially unfit for a purpose they were bought for; or the goods are unsafe. On major failure, the consumer may reject the goods and choose a refund or replacement — the retailer cannot force a repair.
Red flags to watch for
On a major failure, the consumer chooses the remedy — not the retailer. Section 64 ACL voids any term excluding, restricting or modifying the consumer guarantees.
Retailers are jointly liable under the ACL consumer guarantees. A clause pushing you to the manufacturer is misleading; you can always claim against the retailer.
A manufacturer's or retailer's express warranty is in addition to, not instead of, the ACL guarantees. ACL guarantees last a 'reasonable period' given price and nature.
Under the ACL, a consumer is entitled to a refund on major failure regardless of retailer policy. 'No refunds' signs for defective goods are misleading under s.29 ACL.
Retailers cannot charge a restocking fee on goods returned for statutory guarantee failures — only on change-of-mind returns where voluntarily accepted.
Section 64 ACL prevents exclusion of liability for breach of consumer guarantees. Clauses excluding consequential loss in a B2C context are typically void.
Your legal rights
Australian consumers are protected under the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)). Key provisions: s.54 (acceptable quality); s.55 (fitness for disclosed purpose); s.56 (match description); s.58 (spare parts and facilities); ss.259–262 (consumer remedies for goods); ss.267–268 (services); s.64 (non-excludable guarantees); s.260 (major failure definition). Regulators include the ACCC and state fair-trading bodies. Disputes go to state Civil and Administrative Tribunals (e.g. NCAT, VCAT, QCAT) for small claims, or the Federal Court for larger matters. Substantial penalties apply to businesses for breach of consumer law (up to $50 million or 30% of turnover for corporations).
Questions to ask before you sign
- 1Does the contract purport to limit my remedies to repair, or can I choose refund or replacement?
- 2Does the retailer accept joint liability under the ACL, or try to push me to the manufacturer?
- 3What does the contract say the warranty period is, and is the ACL 'reasonable period' acknowledged?
- 4Is there a 'no refunds' or restocking-fee clause, and how does the retailer apply it to faulty goods?
- 5Does the contract purport to exclude consequential loss or limit liability to the purchase price?
- 6Does the contract acknowledge ACL guarantees with the required consumer-guarantee wording?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.