Consumer guarantees

A service is covered if:

• the person or business you bought it from sold it as part of their business or professional activity, including not-for-profit activity, and
• it cost up to $40,000, or
• it cost more than $40,000 and is the kind of service normally bought for personal, domestic or household purposes – for example, car repairs, hairdressing, dry-cleaning or legal services.

You are also covered when you use recreational services involving physical activities – for example, fitness classes at a gym, working out with a personal trainer, bungee jumping and horse riding.

However, people or businesses providing this kind of service can sometimes limit their responsibilities.

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The following services are not covered:

• Services bought before 1 January 2011. These are covered by laws that were in force before 1 January 2011 – contact us for more information.
• Services costing more than $40,000, which are for commercial use - for example, installation of farm irrigation systems or factory machinery repairs.
• Transportation or storage of goods for your business, trade, profession or occupation.
• Insurance contracts.

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The person or business who sold you the service – the supplier – guarantees the service. This means they are responsible for fixing a problem when the service does not meet a consumer guarantee.

What do they guarantee about the service?

They guarantee to provide services:

• with due care and skill
• which are fit for any purpose
• within a reasonable time, when no time is set.

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Due care and skill means they must:

• use an acceptable level of skill or technical knowledge when providing the services, and
• take all necessary care to avoid loss or damage when providing the services.

For example, a consumer hires a painter to paint her house. Before starting the job, the painter does not remove all of the old, flaking paint. Six months later, the new paint starts to flake. The painter has not met the due care and skill guarantee, as he did not use a level of skill that would be expected of a reasonable painter.

While painting the consumer’s house, the painter knocks over a can of paint, which spills over her newly paved driveway. The painter has not met the guarantee, as he has not taken the care expected of a reasonable painter.

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They guarantee the service will achieve the result you were told it would.

For example, a consumer asks a carpenter to build a carport to cover his 4WD vehicle, which is two metres wide. If the carpenter builds a 1.8m-wide carport that does not cover the car, the carpenter will not have met the ‘fit for purpose’ guarantee.

They also guarantee that services, and any resulting products, are of a standard expected to achieve the results that you told them you wanted.

For example, a consumer tells her eye surgeon that she wants to be able to drive without glasses. She is assessed as suitable for laser surgery and undergoes the procedure. If her vision does not meet the standard for driving without glasses, the surgeon will not have met this guarantee.

This guarantee will not protect you if you did not rely, or it was unreasonable for you to rely, on the supplier’s skill or judgment when agreeing to particular services.

For example, it may not be reasonable for you to rely on a receptionist in a large service company for advice about which service is suitable for your needs.

Are there any industries where this guarantee does not apply?

This guarantee does not apply to professional services provided by a qualified architect or engineer.

However, an architect or engineer who provides a service outside their area of professional expertise - for example, building services - must still meet the guarantee.

Architects or engineers must still provide services with due care and skill.

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A contract or agreement for the supply of services usually states when the services will be provided and the date they will be completed by.

If not, the supplier guarantees to supply the service within a reasonable time.

What is reasonable will depend on the nature of the services. For example, the time needed to build a house will be longer than the time required to lop a tree.

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A business does not have to give a refund if you simply change your mind about a service, unless they have a policy to offer a refund, replacement or credit note when this happens.

What if I received the service as a gift?

You have the same rights as a person who bought the service directly.

Who has to fix a problem with a service?

The person or business who sold you the service – the supplier – guarantees the service.

This means they attempt to put the situation right when the service does not meet a consumer guarantee – they must provide a remedy. Common remedies are refunds and repairs.

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Whether you get a refund or other remedy depends on whether the problem is:

• major – it cannot be fixed or too difficult to fix
• minor – it can usually be put right.

Consumer guarantees apply to both.

When a service does not meet a consumer guarantee, you may be able to claim compensation for your costs in time and money because something went wrong with the service.

For major problems with services

A major problem with services is when:

• a reasonable consumer would not have bought the services if they had known the nature and extent of the problem. For example, a reasonable consumer would not have a jacket dry-cleaned if they knew the dye would run and jacket would streak
• the services are substantially unfit for their normal purpose and cannot easily be made fit, within a reasonable time. For example, a carpet-cleaning service changes the colour of the consumer’s carpet in some places
• the consumer told the supplier they wanted a specific purpose but the services, and any resulting product, do not achieve that purpose and cannot easily or within a reasonable time be made to achieve it. For example, a consumer tells a pay TV company they want to watch the Olympics. They sign up to a 24-month contract but the Olympics are over before the company installs the service
• the consumer told the supplier they wanted a specific result but the services, and any resulting product, do not achieve that result and cannot easily or within a reasonable time be made to achieve it
• the supply of the services has created an unsafe situation. For example, an electrician incorrectly wires wall sockets in a consumer’s new kitchen, which makes the electrical outlets unsafe.

When there is a major failure with a service, you can choose to:

• cancel the service contract and get a refund, or
• keep the contract and get compensation for the difference in the service delivered and what they paid for.

You get to choose, not the supplier.

For example, a consumer has signed a building contract that sets out the specifications for her new house. When the house is completed, the consumer notices a few windows are not in the right place. Because the builder has not met the standard required by the contract, the consumer is entitled to compensation.

Handling minor problems with services

For minor problems that can be fixed, you cannot cancel and demand a refund immediately.

You must give the supplier an opportunity to fix the problem. They must do this:

• free of charge, and
• within a reasonable time. This depends on the circumstances.

For example, a reasonable time to fix a problem with a haircut would be much shorter than the reasonable time to fix a problem with a landscaping project.

If the supplier refuses to fix the problem or take too long, you can:

• get someone else to deliver the service and ask the supplier to pay reasonable costs, or
• cancel the contract and get some or all of your money back, if you have already paid. If you have not yet paid, or only partly paid, you can refuse to pay for the defective services at all, or pay less than the agreed price.

A reasonable cost would be within the normal range charged by suppliers, and include:

• the cost of the repair
• any other associated costs.

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A supplier or manufacturer does not have to put a situation right when they did not meet consumer guarantees due to something:

• someone else said or did, unless it was their agent or employee, or
• beyond human control that happened after the goods or services were supplied to you.

However, they must always provide a service with due care and skill.

For example, it takes a qualified painter three weeks to paint a house but the job has taken four weeks. The sole reason for the delay was the weather, which is outside the painter’s control. The consumer would not be entitled to a remedy.

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A contract for services is cancelled when you tell the supplier that you intend to cancel it - verbally, in writing or, if this is not possible, by any other means.

You can cancel a contract for services at any time.

You cannot immediately cancel a service if the problem is minor or can be fixed.

Refunds for cancelled services

Cancelling a contract for services gives you the right to a refund.

The amount will depend on whether some or all of the services provided were unsatisfactory, or provided at all.

For example, a hairdresser has cut and permed a consumer’s hair. The cut is good but the perm has fallen out after a day. The consumer must pay for the cut but not for the perm, as another hairdresser will not need to cut her hair to fix the problem.

Can I keep goods that came with a cancelled service?

When you cancel a contract for services that includes goods, you must return the goods to the supplier.

You are entitled to a refund of any money or other type of payment that you have made for the goods.

If returning the goods involves significant cost, the supplier must collect the goods at their own expense.

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