Suppliers and manufacturers guarantee that goods are of acceptable quality when sold to a consumer.

This means they guarantee the goods will be:

• safe, durable and free from defects;
• acceptable in appearance and finish; and
• do the job it is usually used for.

If the goods are not of acceptable quality, the consumer is entitled to a remedy. A ‘remedy’ is an attempt to put right a fault, deficiency or a failure – for example, repair, replacement or refund.

The test is whether a reasonable consumer, fully aware of the goods’ condition—including any defects—would find them:

• fit for all the purposes for which goods of that kind are commonly supplied – for example, a toaster must be able to toast bread;
• acceptable in appearance and finish – for example, a new toaster should be free from scratches;
• free from defects – for example, the toaster’s timer knob should not fall off when used for the first time;
• safe – for example, sparks should not fly out of the toaster; and
• durable – for example, the toaster must function for a reasonable time after purchase, without breaking down.

This test takes into account:

• the nature of the goods – for example, a major appliance such as a fridge is expected to last longer than a toaster;
• the price paid for the goods – for example, a cheap toaster is not expected to last as long as a top-of-the-range one;
• any statements about the goods on any packaging or label on the goods – for example, the toaster box shows a special defroster function;
• any representation you made about the goods – for example, the supplier said the toaster’s crumb tray was easy to detach and clean; and
• any other relevant circumstances relating to supply of the goods.

Second-hand goods sold in trade or commerce are covered by the guarantee of acceptable quality, but their age, price and condition must be taken into account.

Example:

A consumer buys a second-hand washing machine for $250 from a shop. The supplier said it was two years old and in good condition but it breaks down after two months. A reasonable consumer would expect to get more than two months’ use from this machine. The consumer would be entitled to a remedy from the supplier.

Consumer goods leased or hired to a consumer must also be of acceptable quality.

A consumer ‘hires’ goods when they pay the supplier to use the goods on a temporary basis – usually short-term.

A ‘lease’ is similar but usually involves payment in regular instalments over a longer term.

Example:

A consumer hires a steam cleaner to clean her carpet but the machine does not generate steam and leaks. She is entitled to a remedy because the steam cleaner is not of acceptable quality.

Two tourists hire a campervan to tour Australia. Fifty kilometres along the road, the van breaks down. A mechanic says the van has not been properly maintained or serviced for some time. The tourists would have the right to a remedy.

Some goods may not be of acceptable quality due to problems already known to the supplier – for example, goods with cosmetic defects sold as ‘seconds’.

Defective goods can be sold, usually for lower prices, if the consumer is alerted to the defects before sale. For instance, the supplier:

• tells the consumer before selling the goods; or
• displays a written notice with the goods. This must be clearly presented, legible and expressed in plain language.

It is not enough for the supplier to simply describe the goods as ‘seconds’, ‘sale’ items or ‘as is’. However, a consumer is assumed to be aware of defects if a written notice setting out the defects was displayed with the goods.

A consumer alerted to defects in goods before sale does not have the right to a remedy if those particular defects later cause problems with the goods.

However, the supplier may have to meet the guarantee if the consumer finds a different fault.

Example:

A consumer finds a bargain in a shoe shop – shoes labelled as ‘seconds’. A tag attached to the shoes advises there is a problem with the stitching. He buys the shoes. When the stitching splits, he cannot claim the shoes were not of acceptable quality. However, he may be entitled to a remedy if another fault develops, such as the sole cracking.

A consumer is not entitled to a remedy if they had an opportunity to examine the goods before purchase and did not find defects that they should have noticed.

Example:

Second-hand goods and antiques are often sold on an ‘as-is’ basis. An antiques dealer is not required to give a remedy for defects that a consumer should have noticed when examining the goods, such as chipped surfaces or faded paint.

The amount of effort that a consumer should take examining goods, if given the opportunity, depends on the nature of the goods. For new goods, very limited or no examination would be expected.

However, a consumer may be entitled to a remedy for defects that they would not have found with even the most careful inspection.

Goods are not expected to be indestructible; a consumer’s use of goods can affect the durability of those goods.

The guarantee of acceptable quality will not apply if the consumer:

• uses the goods abnormally; 
• causes the quality of the goods to become unacceptable; and
• fails to take reasonable steps to avoid the quality becoming unacceptable.

The law does not define ‘abnormal use’, however, examples include:

• a mobile phone is dropped in water or is left out in the rain;
• a television is broken by an object hitting the screen;
• a small electric lawnmower is used to mow four hectares every fortnight; or 
• a laptop is picked up by the corner of its screen, which then cracks down the middle.