Warranty Laws In Australia: Compliance Guide For Businesses

Understanding warranty laws in Australia isn’t just about good customer service - it’s a legal requirement under the Australian Consumer Law (ACL) and a key part of building trust in your brand.

Whether you sell products, provide services, or do both, you’ll need to know how warranties interact with consumer guarantees, what to do when something goes wrong, and how to write compliant warranty documents.

In this guide, we’ll break down what counts as a warranty, how the ACL’s consumer guarantees work, who qualifies as a “consumer”, what to include in any written warranty (often called a warranty against defects), and the practical steps to stay compliant. We’ll also flag common mistakes that catch businesses out - so you can avoid them from day one.

Warranty vs Consumer Guarantees: What’s The Difference?

In Australia, it’s easy to mix up “warranties” with the ACL’s “consumer guarantees”. They work alongside each other, but they’re not the same thing.

Consumer guarantees (statutory rights)

Consumer guarantees are mandatory rights that automatically apply whenever a consumer buys goods or services covered by the ACL. You can’t contract out of them, limit them, or charge extra for them. These guarantees include that goods must be of acceptable quality, fit for any disclosed purpose, and match descriptions or samples. Services must be provided with due care and skill, be fit for their purpose, and supplied within a reasonable time.

Importantly, these rights exist regardless of your own warranty wording or timeframes. Even if your paperwork says “12 months only”, the consumer guarantees may require remedies beyond that period if it’s reasonable in the circumstances under the Australian Consumer Law.

Warranties (your additional promises)

A warranty is any extra promise you make about your goods or services - for example, “five-year repair guarantee” or “lifetime support”. In contract law, a warranty is usually a secondary term that, if breached, gives a right to damages rather than termination of the contract. But in a consumer context, if you make an express warranty, you must honour it in addition to the ACL guarantees.

If you provide a written warranty about what you’ll do if the product or service is defective, this is called a “warranty against defects” and it must include certain mandatory information (more on this below).

Who Is A “Consumer” Under The ACL?

“Consumer” under the ACL is broader than many businesses realise. A person or business is a consumer if any of the following apply:

• The amount payable for the goods or services is $100,000 or less; or
• The goods or services are ordinarily acquired for personal, domestic or household use or consumption (regardless of price); or
• The goods are a vehicle or trailer acquired principally to transport goods on public roads.

There are exclusions, such as goods acquired for resupply or to use or transform in production or repair. But for most everyday transactions, the ACL consumer guarantees will apply - including many B2B sales under $100,000.

Your Obligations When Things Go Wrong

When a product or service doesn’t meet a consumer guarantee, the remedy depends on whether the failure is “major” or “minor”.

Minor failure

If the problem can be fixed within a reasonable time, you choose the remedy. Commonly, you’ll repair the goods or re-supply the services. If you don’t fix it within a reasonable time, the customer can seek a refund or replacement, or have the failure remedied elsewhere and recover reasonable costs from you.

Major failure

For goods, a major failure includes things like goods being unsafe, substantially unfit for purpose and can’t be easily fixed, or not matching description in an important way. In these cases, the consumer can choose a refund or replacement. For services, a major failure includes where services are substantially unfit for purpose or not provided within a reasonable time; the consumer can cancel and claim a refund for the unused portion, and potentially damages for losses caused.

Costs, timing and practicalities

• You’re generally responsible for the costs of returning faulty goods where it’s reasonable (for example, postage for a small item). For large or heavy goods, arrange collection if a return is required.
• “No refunds” signs or policies are risky - they’re likely to be misleading under section 18 (misleading or deceptive conduct) and section 29 (false or misleading representations) of the ACL. Make sure your returns wording aligns with section 18 and section 29.
• Retailers can’t send customers straight to the manufacturer. If you sold the goods, you have obligations to deal with the consumer’s ACL claim directly.

Alongside consumer guarantees, you still need to honour any express warranty you’ve made. If your express warranty offers more generous remedies or longer periods, those promises are binding on you.

Manufacturer Warranties, Extended Warranties And Mandatory Wording

Many businesses offer extra protection - which can be great for customer confidence - but you need to ensure your documents are compliant and not misleading.

Manufacturer warranties

If you manufacture goods, you may offer a manufacturer warranty (for example, “free parts and labour for 24 months”). You must ensure your terms don’t suggest the consumer has fewer rights than the ACL provides. If you’re a retailer, remember you can’t “pass the buck” to the manufacturer when a customer seeks a remedy - you have ACL obligations either way.

Extended warranties

Extended warranties are sold for an additional fee to extend or supplement coverage beyond a standard period. You must clearly explain what additional benefits the customer is buying and avoid implying they need to pay for rights they already have under the ACL. If the “extra” offers nothing beyond existing consumer guarantees, selling it may be misleading.

Warranties against defects: mandatory information

If you give a written promise about what you’ll do if goods or services are defective (for example, “we will repair or replace within 12 months”), you’re providing a warranty against defects. The ACL and regulations require your document to include, in clear, plain language:

• What the business will do (repair, replace, refund, re-supply services) and for how long.
• How a customer makes a claim, including contact details and any costs.
• Who bears the expense of claiming (for example, postage) and how those costs will be reimbursed if applicable.
• The business name, address, telephone number and email address.
• The mandatory ACL statement, including the words: “Our goods come with guarantees that cannot be excluded under the Australian Consumer Law...” (use the correct version for goods and/or services).

Getting this wording right matters. Consider implementing a tailored Warranties Against Defects Policy so your sales team and customers see consistent, compliant information.

Sample mandatory statement (goods)

As a guide, your warranty against defects should include a statement substantially similar to: “Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.”

There is a separate version for services, so make sure you use the correct wording for what you sell (or include both where you supply goods and services together).

Practical Compliance Steps For Businesses

You don’t need to be a legal expert to get warranty compliance right. Build a simple, repeatable process and keep your documents up to date.

1) Map your products and services to the ACL

• Identify which goods/services you sell fall under the consumer definition (hint: many B2B sales under $100,000 do).
• Document what a “minor” vs “major” failure looks like for your product range, with examples for staff.
• Create a quick-reference flow for repairs, replacements, refunds and reimbursement of reasonable costs.

2) Update your customer-facing documents

• Terms of Sale: Set out order, delivery, risk, title, ACL-aligned remedies and any express warranty you offer. Avoid blanket “no refunds” statements.
• Website Terms and Conditions: Mirror your in-store policies online, including returns and warranty processes.
• Privacy Policy: If you collect customer details for warranty registration or claims, explain how you collect, store and use that information.
• Warranties Against Defects Policy: Include the mandatory ACL wording, clear claim steps, timeframes and who pays what.

If you’re unsure about the best way to align your onboarding emails, checkout pages and PDFs, a quick chat with a consumer lawyer can help you set it up once and use it everywhere.

3) Train your team and standardise responses

• Equip frontline staff with a simple script for common scenarios (dead-on-arrival, intermittent fault, change of mind, out-of-warranty but within reasonable life, damage from misuse).
• Make it easy to say “yes” where the ACL requires it, and to escalate complex cases early.
• Record claims and outcomes so you can spot product issues early and demonstrate compliance if questioned by the ACCC or a fair trading body.

4) Review your marketing and upsells

• Audit ads and product pages for statements that could be misleading about durability, performance or refund rights (keep section 18 and section 29 front of mind).
• When selling extended warranties, clearly set out the extra benefits compared to ACL rights to avoid confusion and potential misrepresentations.

5) Align your supplier and manufacturer arrangements

• Where you rely on suppliers or manufacturers for repairs and parts, agree service levels, turnaround times and cost responsibilities in your B2B contracts.
• Ensure spare parts and repairs are available for a reasonable period, consistent with what a typical consumer would expect.

Common Warranty Pitfalls (And How To Avoid Them)

• “No refunds” or rigid time limits: Absolute statements are risky and often unlawful. Make sure any policy acknowledges ACL rights that apply regardless of your timeframes.
• Blurred lines between “change of mind” and faults: You can set a separate change-of-mind policy, but don’t apply it to defects, which must be handled under consumer guarantees.
• Extended warranties that add no value: If the paid “extra” doesn’t give more than the ACL already provides, you’re at risk of misleading customers.
• Missing mandatory wording: If you provide a warranty against defects without the ACL statement and required details, your warranty document is non-compliant.
• Sending customers to the manufacturer: Retailers and service providers have direct obligations. Coordinate with suppliers behind the scenes, but don’t refuse to assist the consumer.
• Inconsistent messaging: Your sales page, checkout, emails and PDF warranty card should all say the same thing. Align your customer journey with a single source of truth.

Key Takeaways

• Consumer guarantees under the ACL apply automatically and can’t be excluded - they sit alongside any express warranty you choose to offer.
• “Consumer” is broad: sales at $100,000 or less (including many B2B transactions) often attract ACL protections.
• For major failures, customers choose a refund or replacement (goods) or can cancel services; for minor issues, you can repair or re-supply within a reasonable time.
• Any warranty against defects must include mandatory ACL wording and clear claim details, timeframes and costs.
• Keep your Terms of Sale, website terms, privacy practices and warranty documents aligned, and train staff to respond consistently.
• A short compliance review of your warranties, marketing and upsells now can prevent costly disputes and penalties later.

If you’d like a consultation on warranty compliance for your Australian business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.