Guarantees by manufacturers

Who is a manufacturer?

Under the ACL (s 7), a person is deemed to be the manufacturer of goods if:

they actually manufacture the goods;

they claim to be the manufacturer;

they permit someone else to claim they are the manufacturer;

they permit their business name or one of its brand names to be applied to the goods (e.g. printed on a wrapper, woven on a label);

they imported the goods as the actual manufacturer does not conduct business in Australia.

Who is covered?

“Consumer” – in the context of guarantees by manufacturers – has the same meaning as it does in relation to guarantees by suppliers (seeWho is a consumer?”).

The ACL manufacturers’ guarantees also protect “an affected person”. In this context, “an affected person” is the consumer, as well as a person who acquires the goods from the consumer (other than for the purpose of re-supply), such as the consumer’s family, friends or associates (s 2).

What goods are covered?

The ACL manufacturer’s guarantees only cover goods defined in sections 2 and 3; broadly, these are goods ordinarily acquired for personal, domestic or household use or consumption.

Consumers of goods that are not of this kind have no rights against manufacturers under the ACL. Such individuals can seek compensation from the person from whom they bought the goods, or if appropriate, sue the manufacturer for negligence.

Manufacturers’ obligations

Under the ACL, an “affected person” may take action against a manufacturer for breach of:

the guarantee of the acceptable quality of goods (s 54) – except where the breach is caused by someone other than the manufacturer, or where the breach is caused by something beyond human control that occurred after the goods left the manufacturer’s control, or where the breach is because the supplier charged more than the manufacturer’s recommended retail price (s 271(1), (2));

the guarantee that goods sold by description will comply with that description (s 56) – except where the breach is caused by someone other than the manufacturer, or where the breach is caused by something beyond human control that occurred after the goods left the manufacturer’s control (s 271(3), (4));

the guarantee (s 58) that the manufacturer will take reasonable action to ensure facilities for repairing goods, and spare parts, are available (s 271(5));

the guarantee (s 59) that the manufacturer will comply with any express warranty given (s 271(5)).

Remedies against a manufacturer

A person affected may seek damages for the reduced value of the goods and for any reasonably foreseeable loss or damage resulting from the breach of the guarantee (s 272). Legal action against a manufacturer must be commenced within three years of the person affected becoming aware of the breach of guarantee (s 273).