Goods And Services: Essential Guide To Australian Consumer Law

Supplying goods or services is the core of almost every business. But in Australia, what you sell and how you sell it is shaped by the Australian Consumer Law (ACL).

Understanding when the ACL applies, what guarantees you must provide, and how to set up practical policies helps you build trust with your customers and avoid costly disputes. This guide walks you through the essentials in plain English so you can stay compliant and focus on growing your business.

Below, we explain what counts as goods and services under the ACL, when a customer is a “consumer”, the guarantees and remedies that apply, how to manage advertising and digital supplies, and the contracts and processes that help you stay on the right side of the law.

What Counts As Goods And Services Under The ACL?

The ACL defines “goods” and “services” broadly. Most everyday products and commercial offerings will be caught.

Goods

Goods generally include:

• Personal property (other than money and certain interests in land)
• Tangible products like clothing, electronics, food, furniture, vehicles and machinery
• Animals
• Gas and electricity when supplied in trade or commerce
• Computer software and digital products that are supplied as downloads (e.g. desktop software, e‑books)

Second‑hand and refurbished items are still “goods”.

Services

Services cover almost anything you do for a customer in exchange for payment, including:

• Professional services (e.g. accounting, marketing, legal, IT)
• Hospitality and travel (accommodation, tours, events)
• Repairs and maintenance
• Personal services (hairdressing, beauty, wellness)
• Education, training and coaching
• SaaS, hosting and other cloud tools (ongoing access/uptime is typically a service)

If you bundle a product with installation or after‑sales support, both goods and services rules can apply to the different parts of the deal.

When Does The ACL Apply To Your Sales?

The ACL’s consumer guarantees and many protections apply when you supply to a “consumer”. A customer is a consumer if any one of the following is true:

• The amount paid or payable is $100,000 or less; or
• The goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption (regardless of price); or
• The goods are a vehicle or trailer primarily used to transport goods on public roads.

Business customers can still be “consumers” under this test. For example, a business buying a $5,000 printer, or a $30,000 software licence that’s ordinarily bought for household use, may be covered.

Key exceptions include purchases for resupply, or goods to be used up or transformed in trade or manufacturing. If you’re unsure whether a particular supply is covered, it’s worth getting tailored advice.

Consumer Guarantees And Remedies Explained

For consumer supplies, you cannot contract out of the ACL’s guarantees. Your terms and policies should reflect the guarantees and the remedies customers are entitled to if something goes wrong.

Guarantees For Goods

When you supply goods to a consumer, the ACL guarantees that they will be:

• Of acceptable quality (safe, durable, free from defects, and acceptable in appearance and finish)
• Fit for any disclosed purpose and for any purpose you represent they’re fit for
• As described, and match any sample or demo shown
• Supplied with clear title and undisturbed possession

Spare parts and repairs: under the ACL, it’s the manufacturer who guarantees they will take reasonable steps to ensure repair facilities and spare parts are reasonably available for a reasonable time after purchase, unless they clearly tell the consumer otherwise at the time of sale. Suppliers should be careful not to overpromise here and should pass on accurate manufacturer information.

Guarantees For Services

When you supply services to a consumer, the ACL guarantees they will be:

• Provided with due care and skill
• Fit for any disclosed purpose (and for any result you say they will achieve)
• Supplied within a reasonable time, if no time is set

Remedies: Minor vs Major Failures

Remedies depend on the type of failure:

• Minor failure: You can choose the remedy. For goods, that’s usually repair or replacement. For services, it’s typically fixing the issue or re‑performing the service.
• Major failure: The consumer chooses their remedy. They can reject the goods for a refund or replacement, cancel the service for a refund of the unused portion, or keep the goods and claim compensation for the drop in value. They can also claim compensation for reasonably foreseeable losses caused by the failure.

“Change of mind” returns are not required by law, but you can choose to offer them as a customer‑friendly policy. Make sure any voluntary change‑of‑mind policy sits alongside (and does not contradict) your ACL remedies.

Refund And Repair Policy Tips

• Don’t use “no refunds” blanket statements - they’re inconsistent with the ACL for consumer supplies.
• Separate ACL remedies from any change‑of‑mind offer, and state any conditions for change‑of‑mind clearly.
• For services, set out how you will re‑perform work, expected response times, and when refunds will be offered for major failures.
• Train staff and align scripts and email templates with your policy so customers hear consistent, accurate information.

It’s also helpful to have a clear written policy about warranty statements you make. If you offer a warranty against defects, the ACL prescribes how those statements need to be worded - a Warranties Against Defects Policy can help standardise this across your business.

Advertising, Pricing And Digital Supplies

Misleading Or Deceptive Conduct

Under the ACL, you must not engage in misleading or deceptive conduct. This includes inaccurate claims about features, price, origin, performance, availability or discounts - across ads, product pages, labels, customer service scripts and social media. Intent isn’t required; what matters is whether the overall impression is likely to mislead. For a practical overview, see the elements of misleading or deceptive conduct under Australian law.

Make sure representations are specific and accurate, keep evidence to back up claims (e.g. “90% faster” or “Australian‑made”), and avoid fine‑print disclaimers that contradict bold headlines.

Digital Goods And Online Services

The ACL applies to digital supplies. Downloaded software and other downloadable products are generally treated as goods; cloud access, subscriptions and streaming are typically services. If the supply meets the consumer test, the relevant guarantees apply.

For apps and SaaS in particular, align uptime commitments, support response times and security obligations with the services guarantees. Ensure your product pages and refund pathways reflect how the ACL distinguishes minor from major failures.

Privacy compliance also matters if you collect personal information through your website or app. If you’re an APP entity under the Privacy Act 1988 (Cth), you must have a compliant Privacy Policy. Even if you’re exempt, having a clear policy is often expected by platforms, partners and customers.

Set‑Up And Compliance Checklist For Australian Businesses

Here’s a straightforward roadmap to set up your supply of goods and services with the ACL in mind.

1. Define your offer
   Be clear about what you’re selling, how it’s delivered, what’s in scope (and out of scope), and who you’re selling to (consumers, businesses, or both).
2. Check ACL coverage
   Assess whether your typical sales meet the consumer test. Remember, many B2B sales are still covered if the price is $100,000 or less or the goods/services are ordinarily for household use.
3. Register properly
   Set up your ABN and business name if required. If you plan to scale or want liability protection, consider setting up a company with the right governance documents; many founders also put a Shareholders Agreement in place early.
4. Obtain any licences/permits
   Depending on the industry, you may need additional approvals (for example, food business permits, building licences, health or childcare approvals, or local council permissions). Check federal, state and local requirements before launch.
5. Align your webpages and sales materials
   Make sure your product or service descriptions, timelines, pricing displays and refund processes align with ACL guarantees and remedies. Your online environment should also include appropriate Website Terms and Conditions.
6. Put the right contracts in place
   Use clear Customer T&Cs for sales, and a robust Supply Agreement with your manufacturers or wholesalers to manage quality, delivery timeframes, and responsibilities for defects.
7. Set up privacy and data practices
   If you’re an APP entity, publish a compliant Privacy Policy and set up processes for handling access requests and complaints. Be transparent about tracking technologies and marketing consents, and comply with Australia’s Spam Act and Do Not Call rules.
8. Plan your tax settings
   Consider whether you need to register for GST based on projected turnover and make sure your invoices meet tax invoice requirements. This is general information only - speak with your accountant or a tax adviser for specific tax advice.
9. Train your team
   Keep staff up to date on your refund policy, advertising rules and complaint handling so customer communications are consistent and compliant.
10. Review regularly
    Update terms and policies as laws change (for example, since November 2023, unfair contract terms can attract significant civil penalties), and when you introduce new products, services or sales channels.

The Contracts And Policies Most SMEs Need

Strong, tailored documents help you set expectations, allocate risk and stay compliant. The essentials will vary by business, but many Australian SMEs rely on the following:

• Customer T&Cs (or Service Agreement): Sets scope, inclusions and exclusions, pricing, delivery timeframes, how faults are handled under the ACL, and liability allocation. For online stores or service platforms, this often appears as your checkout terms or account terms. See a robust starting point with a Customer Contract.
• Website Terms and Conditions: The rules for accessing and using your website or app, covering acceptable use, intellectual property, disclaimers and limitations - especially important if you run user accounts or host content. Add this to your site as Website Terms and Conditions.
• Privacy Policy: If you are an APP entity, this is required under the Privacy Act 1988 (Cth). It explains what personal information you collect, why you collect it, how you store it and who you share it with. Even if you’re exempt, publishing a clear Privacy Policy builds trust and is often expected.
• Supply/Manufacturing Agreement: Sets quality standards, specifications, delivery schedules, acceptance testing, responsibility for defects, indemnities and returns logistics. A tailored Supply Agreement helps align your whole supply chain with your ACL obligations.
• Warranties Against Defects Statement: If you offer a voluntary warranty, your statement must include prescribed wording and details. A standardised Warranties Against Defects Policy keeps your messaging consistent and compliant.
• NDA (Non‑Disclosure Agreement): Useful when sharing confidential information with potential partners, suppliers or investors so your know‑how, pricing and product plans are protected. A simple Non‑Disclosure Agreement is often signed early in discussions.
• Shareholders Agreement: If you have co‑founders or investors, a Shareholders Agreement sets decision‑making rules, vesting, exits and dispute processes so ownership and control are clear from day one.

Not every business will need every document, but most eCommerce and service providers will need several of the above. The key is to keep the language clear, align your documents with the ACL, and make sure your team actually follows the processes you’ve set out.

Key Takeaways

• The ACL applies to most Australian sales under $100,000, sales of goods or services ordinarily for household use (regardless of price), and sales of vehicles or trailers - B2B sales can still be “consumer” supplies.
• For consumer supplies, you can’t contract out of consumer guarantees. For goods, note that the spare parts/repairs availability guarantee sits with the manufacturer unless they clearly say otherwise at the time of sale.
• Remedies depend on minor vs major failure: you choose the fix for minor issues; the consumer chooses for major failures, and may also claim foreseeable loss.
• Advertising and pricing must not mislead - ensure claims are accurate across your website, marketing and customer communications, and keep evidence for performance claims.
• Digital products are covered too: downloaded items are usually goods; SaaS and subscriptions are typically services. Align uptime/support promises with the guarantees.
• Set yourself up with clear Customer T&Cs, Website Terms and Conditions, a Privacy Policy (if required), and strong supplier agreements so your processes match your ACL obligations.
• Review your standard form contracts for unfair terms - significant penalties now apply - and train staff so policies and scripts stay consistent with the law.

If you’d like a practical check‑up on your ACL compliance, refund policy, terms or privacy obligations for your goods and services, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.