OCBA - Manufacturer and importer responsibilities

Manufacturer and importer responsibilities

What you guarantee:
A manufacturer is a person or business that:

makes or puts goods together
has their name on the goods.

The importer is responsible for consumer guarantees on goods, if the maker does not have a place of business in Australia.

Along with the supplier, you guarantee that goods:

are of acceptable quality - they will be safe, durable and free from defects. They will be acceptable in appearance and finish, and do the job such things are usually used for
match the description – they will match any description given to the consumer
will meet any extra promises made about them (express warranties).

You also guarantee repairs and spare parts. For more information, see Consumer guarantee – repairs and spare parts.

Manufacturer failure to honour an express warranty

If you refuse to honour an express warranty or fail to do so within a reasonable time, the consumer can take legal action to enforce the warranty in a tribunal or court.

They can also:

assert their rights under the consumer guarantees
ask for compensation for consequential loss due to the manufacturer's failure to meet the warranty – see
Compensation for consequential loss.

What if there is no express warranty?

If there is no express warranty and you have not met a consumer guarantee, the consumer can assert their rights under the consumer guarantees.

When you sell goods directly to the consumer

As a manufacturer or importer, you may sell goods directly to consumers for example, in a seconds shop at your premises.

If so, you are acting as supplier and have the same responsibilities under consumer guarantees law. For more information, see Consumer guarantees on goods.

Consumer claims against the manufacturer

How much compensation does the manufacturer have to pay?

A consumer is entitled to ask for an amount covering any drop in the value of the goods.
This amount must be equal to or less than the difference between the current value of the goods and the lowest of either:

the average retail price of the goods at the time of purchase, or
the actual price paid.

Example 1: calculating compensation

A consumer bought goods for $30. The average retail price at the time was $28. The goods are worth only $10 due to failure to meet a consumer guarantee. The manufacturer must pay the consumer $18 - the difference between the average retail price of $28 (because it is lower than the price paid) and the value of the goods as a result of the problem.

The consumer can also ask for compensation for any ‘reasonably foreseeable' loss suffered due to the manufacturer's failure to meet the consumer guarantees. ‘Reasonably foreseeable' costs include the cost of inspecting and returning the goods to the manufacturer. For more information, see Compensation for consequential loss.

What if the manufacturer did not cause the problem?

As a manufacturer, you are not responsible for problems with goods beyond your control. You do not have to pay damages if goods do not meet the consumer guarantees due to:
an act, default, omission or representation made by some other person, unless they are your employee or agent.

Example 2 – claim against manufacturer for failing to meet consumer guarantee

A mechanic, not employed by the manufacturer, uses the wrong engine oil in a car. This damages the engine. In that case, the mechanic, and not the manufacturer, would be responsible for compensating the consumer
a cause independent of human control that occurs after the goods left your control.

Example 3 - claim against manufacturer for failing to meet consumer guarantee
The day after the supplier finishes building a gazebo for the consumer, gale force winds lift two sheets of iron off the gazebo roof
the supplier charging a higher price than the recommended or average retail price for the goods.

This covers situations where there is a higher standard of acceptable quality expected of those goods due to their price. See ‘Guarantee as to acceptable quality'.

This covers situations where there is a higher standard of acceptable quality expected of goods due to their price. Manufacturers will be held to the standard required if the goods were sold at the recommended retail price or the average retail price.

Limits on compensation for non-household goods or services

Suppliers and manufacturers can limit their liability under the consumer guarantees for problems with goods or services not used for personal, domestic or household purposes.

You can limit remedies to:

replacing or repairing goods
reimbursing the consumer for repairing or replacing the goods
re-supplying services
reimbursing the consumer for paying someone else to supply the services. You can only do this if it is fair or reasonable. What is ‘fair or reasonable' will depend on the circumstances, including whether:
the consumer had no choice but to agree to limit compensation
the consumer was given something in return for buying the goods or services from you, at the expense of buying from someone else
the consumer knew or should have known about the limit on compensation
the goods were a special order for the consumer.

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