How Can Your Business Comply With Consumer Guarantees? (2025 Updated)

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For all businesses, your customers remain your number one priority. There’s no point in running your business without them!

Even if you believe you’re always making the right decisions, there are aspects of your operations that are governed by law – they are part of the law. Consumer guarantees serve as a prime example of these legal requirements, ensuring your customers receive a fair and safe experience.

What Are Consumer Guarantees?

Consumer guarantees are the automatic rights afforded to consumers when they purchase goods and services from Australian businesses. Established under the Australian Consumer Law (ACL) – a key component of the Competition and Consumer Act 2010 – these guarantees ensure that consumers receive products and services that meet a minimum standard of quality and reliability. You might also hear references to the now-outdated Trade Practices Act 1974, but rest assured, the ACL remains the cornerstone of consumer rights in Australia as we head into 2025.

Under the ACL, consumers are entitled to a basic set of rights and have a legal basis to seek compensation if any of these rights are breached. These guarantees not only protect consumers but also help maintain the integrity and reputation of Australian businesses.

When Do Consumer Guarantees Apply?

Australian businesses – and in some instances individuals – must comply with the obligations set out in the ACL, ensuring these consumer guarantees are met. In today’s highly competitive market, it’s vital to understand what this means for your business or startup. For detailed guidance, consider reading our legal requirements for starting a business article.

Consumer guarantees apply only if your customer qualifies as a ‘consumer’.

There are two main tests under the ACL to define a ‘consumer’:

A person who purchases goods for less than $40,000, regardless of the purpose of the goods.
A person who acquires goods or services that are ordinarily or regularly purchased for domestic, household, or personal use, including vehicles.

A person is not considered a ‘consumer’ if the goods are bought for re-supply or for the purpose of using, transforming, or incorporating them into another product as part of production, manufacturing, or repair.

If you’re uncertain whether your customers fall within the ACL’s definition of a ‘consumer’, it’s wise to seek clarification. Our Getting Started With Your Legals guide is a great resource, or you might wish to obtain personalised legal advice.

What are the Consumer Guarantees?

There are several consumer guarantees that Australian businesses must observe for goods and services. These guarantees help ensure that the products and services you provide are safe, reliable, and meet the standards that consumers are entitled to expect.

For goods and products, the consumer guarantees require that they:

Be of acceptable quality.
Match descriptions provided during the sales process, including packaging, labels, and advertising.
Correspond to any demonstration model or sample shown to the consumer.
Be fit for the purpose for which they are sold.
Be delivered with full ownership and title, meaning you have the legal right to transfer them.
Be free from hidden debts or additional charges.
Ensure the consumer has undisturbed possession, so that once purchased, no one can unlawfully take or restrict its use.
Fulfil any extra promises regarding performance, condition, or quality (such as a lifetime guarantee).
Include access to spare parts and repair services for a reasonable period, unless otherwise stated.

For services, the guarantees stipulate that they must:

Be provided with due care and skill, with all necessary precautions taken to avoid loss or damage.
Be fit for the intended purpose and deliver the agreed results.
Be delivered within a reasonable timeframe if no specific deadline has been set.

It’s essential to assess how your business delivers goods and services and ensure that your practices align with these consumer guarantees. Robust processes not only help you avoid costly disputes but also enhance your reputation. For more insights on maintaining regulatory compliance, have a look at our Industry Regulations guide.

Guarantee for Goods of Acceptable Quality

One of the fundamental guarantees for goods is that they must be of acceptable quality. In practical terms, if a consumer purchases a product that a reasonable person would consider unsafe or defective, then this guarantee has not been met.

There are five key conditions that a good must meet to be deemed of acceptable quality:

Fit for the purpose for which it is sold
Acceptable in appearance and finish
Free from defects
Safe for use
Durable for a reasonable period

Failure to meet any of these criteria may provide the consumer with grounds to take legal action against your business.

How Long Do Consumer Guarantees Last?

The duration of a consumer guarantee depends on the nature of the goods or services and the specific guarantee in question. For example, if a consumer reasonably expects a product to last two years but it fails within just a few weeks, the guarantee would clearly apply. Conversely, if a product only fails after several years – beyond what a consumer might reasonably expect – the guarantee may no longer be applicable.

It is also important to note that under the ACL, consumers must bring any claims within six years of the alleged breach. Staying informed about these timelines and updating your business practices accordingly is critical in today’s legal landscape.

Regular Legal Reviews: A 2025 Perspective

As we progress into 2025, staying updated with consumer law is more important than ever. Regular reviews of your customer contracts and business practices are essential to ensure ongoing compliance with the ACL. Many businesses now conduct routine legal health checks – utilising measures such as our Conflict of Interest Policy review – to safeguard their operations. By proactively updating your systems and policies, you not only reduce the risk of legal disputes but also strengthen customer trust and loyalty, which is a crucial competitive edge in today’s market. For further insights on aligning your business with current legal standards, check out our Getting Started With Your Legals guide.

Can You Avoid Consumer Guarantees?

Simply put, no. Any attempt to exclude or limit the consumer guarantees in your customer contracts is not enforceable. For instance, you cannot include clauses that waive the right to refunds or limit your liability in the event of a breach of these guarantees.

While you are welcome to enhance your customer contracts with additional benefits – such as offering ‘change of mind’ return policies – ensuring compliance with the ACL must always remain your top priority. Failure to do so could attract scrutiny and enforcement actions from the ACCC.

What to Take Away…

As a business providing goods or services, it is crucial to understand and adhere to the consumer guarantees outlined in the ACL. Regular legal reviews and proactive contract updates will help you maintain compliance and avoid potential legal issues. Remember, these guarantees are designed to protect your customers and ensure your business operates fairly – investing a little effort now can save you significant trouble in the future.

If you’d like to ensure your customer contracts and business practices are fully aligned with the latest legal standards in 2025, get in touch with us. Our team is here to help you navigate the complexities of consumer law and safeguard your business, so you can focus on what truly matters – your customers.

Minna Boyle

Minna is the Head of People & Culture at Sprintlaw. After completing a law degree and working in a top-tier firm, Minna moved to NewLaw and now manages the people operations across Sprintlaw.