TRADE PRACTICES ACT - IMPLIED WARRANTIES

Did you know that the Trade Practices Act 1974 (Cth) and the Goods Acts legislation imply terms into a contract for the sale of goods or the supplying of services to a consumer which cannot be excluded.

If goods are supplied to a consumer in the course of business, there are implied conditions that the goods:

• will correspond with the description of the goods;
• are of merchantable quality, unless the defects are drawn to the consumer's attention before the contract is made or if the consumer examines the goods before the contract is made and the defects were such that the examination should have revealed;
• are reasonably fit for the purpose, that the consumer has made known to the supplier, for which they are acquired. ie a computer which can connect to the Internet or is suitable for multimedia
• that the supplier has the right to sell the goods;
• that the goods are free from any charge or encumbrance not disclosed to the consumer; and
• the consumer will enjoy quiet possession of the goods.

Similarly, if consumer pays for services in the course of business there are implied warranties that the services:

• will be rendered with due care and skill;
• will be reasonably fit for the purpose for which they are supplied; and
• might reasonably be expected to achieve a the desired result, if the desired result is made known to the supplier.

Suppliers who are found to have breached an implied condition or warranty, may be ordered to replace, repair or pay for the repair of the goods or provide services again or pay to have them provided again in addition to possibly paying for any loss or damage caused. A penalty of $1000 may apply in some circumstances should a supplier be found to have attempted to exclude such implied terms. Consumers may take suppliers to the small claims tribunal or the Courts to deal with a complaint resulting from a breach of condition or warranty.

Suppliers need to be aware of their obligations under the relevant legislation to avoid problems. Consumers should ensure that they take advantage of such legislation.

STEVE WHITE
WHITE SW COMPUTER LAW
DECEMBER 1996

www.computerlaw.com.au

© White SW Computer Law 1996

This article is a guide only and should not be used as a substitute for proper legal advice, readers should make their own enquiries and seek appropriate legal advice.