There’s about to be an important change to the Australian Consumer Law (ACL).

Since 1986, a person has been considered a ‘consumer’ under ACL if they:

  • Bought goods or services under $40,000
  • Bought goods or services normally used for personal, domestic or household use or consumption (irrespective of price)
  • Bought a vehicle or trailer to transport goods on public roads

However, that definition changes on 1 July 2021 – when the $40,000 threshold is increased to $100,000, likely capturing more business-to-business deals.

And being a consumer under ACL comes with certain guarantees that can’t be waived, limited, excluded or misrepresented.

What are the consumer guarantees?

 Consumer guarantees are the minimum standards that businesses are expected to meet when they sell goods or services to consumers.

They include the automatic guarantee that all:

  • Products must be safe, long-lasting, with no faults, be fit for purpose, match descriptions, have spare parts and do all the things someone would normally expect them to do
  • Services must be provided with acceptable care and skill, be fit for purpose and be delivered within an agreed or reasonable time.

If a business fails to comply with these requirements, the consumer may be entitled to a range of remedies, including replacement, refund, repair, cancellation and/or compensation.

What should you do as a business?

 If your business supplies goods or services worth between $40,000 and $100,000, don’t get caught out by this change. Rather:

  • Review your existing sale and supply contracts to make sure they are compliant with ACL, and update those that aren’t
  • Make sure your existing warranties comply with consumer protection regulations
  • Educate your team so they are aware of the changes and understand what they mean
  • Seek legal advice to make sure your business is complying with all its ACL obligations

Blaine Hattie is a small business lawyer at Sutton Laurence King Lawyers.

Want expert advice on how these ACL changes impact your business? Call us on 03 9070 9810 or email info@slklawyers.com.au to begin the process.