What’s in a warranty?

warrantyBusiness Queensland warns business owners to be sure they understand their obligations under the consumer laws. The key message is that you need to understand the nine guarantees you make just by selling a good to a consumer. Business to business services are not exempt either.

Business.qld.gov.au contains a range of resources on guarantees and warranties and the implications for small business which are summarised below.

There are two potential traps for business owners and operators in the current consumer laws stemming from the guarantees and warranty clauses that many operators are not aware of.

The first trap is that by selling the goods you are declaring them fit for purpose. If they do not do what you have advertised them as doing, then that is your problem. Literally. You need to make good to the consumer. There are none consumer warranties that apply to goods, and three applying to services. It is worth your while making sure that you understand them.

The second trap only applies to those companies that sell extended warranties. “Here is your washing machine sir, would you like a five year warranty on that for an additional $120.”

There is nothing illegal or problematic about the warranty, or selling it, the problem is that most of the terms in most extended warranties are exactly the same as the guarantees offered to consumers under the law. The customer who says to you, “No thanks I don’t need to pay for that, you have guaranteed all of those things by selling me the goods,”  might be a smart-arse but they are, in fact, correct.

Business Queensland refers proprieters to the specific area of the Fair Trading website to deal with that specific issue.

All in all, this is an area that affects all of us, whether we are selling goods or services and whether we are dealing with the public, or other businesses.

To review the full range of information collected by Business Queensland head over to the Legal Obligations area of their website.

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