A manufacturer is a person or business that:
- makes or puts goods together
- has their name on the goods.
The importer is responsible for consumer guarantees on goods, if the maker doesn’t have a place of business in Australia.
Along with the supplier, you guarantee that goods:
- are of acceptable quality – they will be safe, durable and free from defects. They will be acceptable in appearance and finish, and do the job such things are usually used for
- match the description – they will match any description given to the consumer
- match the sample or demonstration model.
You also guarantee repairs and spare parts.
When you sell goods directly to the consumer
As a manufacturer or importer, you may sell goods directly to consumers for example, in a seconds shop at your premises. You are acting as supplier and have the same responsibilities under consumer guarantees law.
Consumer claims against the manufacturer
How much compensation is paid?
A consumer can ask for an amount covering any drop in the value of the goods. This is calculated using the average retail price of the goods at the time of purchase. Example: a consumer bought goods for $30. The average retail price at the time was $28. The goods are worth only $10 due to failure to meet a consumer guarantee. The manufacturer may need to refund the consumer $18.
The consumer can also ask for compensation for any reasonably foreseeable loss suffered due to the manufacturer’s failure to meet the consumer guarantees. Reasonably foreseeable costs include the cost of inspecting and returning the goods to the manufacturer.
What if the manufacturer did not cause the problem?
As a manufacturer, you’re not responsible for problems with goods beyond your control. You do not have to pay damages if goods do not meet the consumer guarantees due to:
- an act, default, omission or representation made by some other person, unless they are your employee or agent. Example: a mechanic, not employed by the manufacturer, uses the wrong engine oil in a car. This damages the engine. In that case, the mechanic, and not the manufacturer, would be responsible for compensating the consumer.
- a cause independent of human control that occurs after the goods left your control. Example: the day after the supplier finishes building a gazebo for the consumer, gale force winds lift two sheets of iron off the gazebo roof.
- the supplier charging a higher price than the recommended or average retail price for the goods. Manufacturers will be held to the standard required if the goods were sold at the recommended retail price or the average retail price.
Limits on compensation
You can limit your liability under the consumer guarantees for problems with goods or services not used for personal, domestic or household purposes. You can limit remedies to:
- replacing or repairing goods
- reimbursing the consumer for repairing or replacing the goods
- re-supplying services
- reimbursing the consumer for paying someone else to supply the services.
You can only do this if it’s fair or reasonable. What is fair and reasonable will depend on the circumstances, including whether:
- the consumer had no choice but to agree to limit compensation
- the consumer was given something in return for buying the goods or services from you, at the expense of buying from someone else
- the consumer knew or should have known about the limit on compensation
- the goods were a special order for the consumer.
When a supplier deals with a manufacturer’s problem
You must reimburse a supplier who deals with a problem that is your responsibility under the consumer guarantees.
The amount can include any compensation paid to the consumer for consequential losses.
Is there a time limit for reimbursement?
A supplier must make a request within three years of the date:
- the supplier fixed any problems with the consumer’s goods, or
- the consumer took legal action against the supplier.
Are there any other limits on reimbursement?
You cannot contract out your obligation to reimburse the supplier.
However, when fair and reasonable, you can limit your liability to the lowest cost out of:
- replacing the goods
- obtaining equivalent goods, or
- repairing the goods.