When selling an extended warranty, suppliers should make it very clear exactly what it offers the consumer, over and above the rights they already have under consumer guarantees.
The following warranties are in addition to a consumer’s rights under the ACL.
Warranties against defects or a ‘manufacturer’s warranty’
Suppliers or manufacturers may provide a warranty that promises consumers that:
- goods or services will be free from defects for a certain period of time
- defects will entitle the consumer to repair, replacement, refund or other compensation.
This is called a ‘warranty against defects’, or a ‘manufacturer’s warranty’.
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Key points about warranties and consumer guarantees
Consumers have specific rights under the Australian Consumer Law (ACL), regardless of any other warranty provided by the supplier or manufacturer. The ACL guarantees that all goods:
- are of acceptable quality
- match the description, sample or demonstration model
- are fit for their disclosed purpose
- come with clear title, unless otherwise stated
- does not have undisclosed securities
- come with a right to undisturbed possession
- will have spare parts and repairs available for a reasonable amount of time after purchase
- with express warranties, will have those warranties honoured
Consumers are guaranteed that services will be:
- provided with due care and skill
- fit for any disclosed purpose
- completed within a reasonable time.
For more information, view our Guarantees that apply automatically page.
A consumer can also insist a supplier meets a consumer guarantee, even if the goods are covered by additional warranties.
A warranty against defects must be in writing and:
- be expressed in a transparent way – in plain language, legible and presented clearly
- contain the warrantor’s name, business address, phone number and email address (if any)
- set out relevant claim periods or procedures, and
- include a statement that rights under the warranty sit alongside the ACL consumer guarantees, which cannot be excluded.
Failing to meet these criteria may lead to civil and criminal penalties. For more information, view our General penalties page.
Suppliers and manufacturers often make extra promises (sometimes called ‘express warranties’) about such things as the quality, state, condition, performance or characteristics of goods.
An express warranty is not necessarily about the product breaking; it is about it living up to promises.
Express warranty included in a warranty against defects (manufacturer's warranty)
Under the ACL, suppliers (and possibly manufacturers) guarantee that goods will meet any express warranties made.
As outlined above, a warranty against defects differs from an express warranty. A warranty against defects deals with what the manufacturer promises to do when something goes wrong with goods. An ‘express warranty’ focuses on a promise or promises – for example, about what the goods will look like, will do (or are capable of doing) and for how long.
However, a warranty against defects may also contain an express warranty.
Before agreeing to pay for an extended warranty, consumers should check that it provides benefits greater than they already have under the ACL.
Some suppliers or manufacturers offer extended warranties, which generally offer a longer period of coverage than the manufacturer’s warranty. Usually, consumers are offered the chance to buy an extended warranty after, or at the time, they buy the products.
When selling an extended warranty, suppliers should make it very clear exactly what it offers the consumer, over and above the rights they already have under ACL consumer guarantees.
Some suppliers or manufacturers also tell the consumer an extended warranty provides extra protection, which the consumer would not have unless they buy it. This is not necessarily true. The consumer guarantees provide rights that exist despite anything the supplier or manufacturer may say or do. Extended warranties are optional.
Suppliers must not:
- pressure consumers to buy an extended warranty
- tell a consumer that they must pay for any rights equivalent to a consumer guarantee.
Suppliers also need to be careful not to imply that only an extended warranty will cover problems with a product. Doing so may amount to misleading a consumer about their rights.