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Selling things is not easy.
Consumers today have a huge choice of products available to them. There are countless businesses out there, selling many similar items, which makes standing out an even bigger challenge in 2025.
How do you ensure your products are distinct and attractive to prospective buyers, especially in a market where every business is vying for attention?
When you’re trying to make your product sound as appealing as possible, it can be tempting to make bold promises to your potential customers – statements like:
“Our product will work perfectly for at least 2 years.”
“It’s completely waterproof – no matter what!”
“We’ll replace any broken parts over the lifetime of the product.”
These kinds of statements can indeed help close a sale, but then you must ask yourself:
Can you actually follow through on these promises?
It’s crucial to be cautious because, under Australian law, you might be legally required to stand by these statements. This is due to something called an express warranty.
What is an Express Warranty?
Whenever you guarantee or promise something specific about a product to your customers, you may be creating a legally binding promise.
Under the Australian Consumer Law (ACL), an express warranty is an extra written or verbal representation you make about a product that you are selling. As of 2025, the ACL continues to provide robust protection for consumers by ensuring that any such explicit promises are met without compromise.
Some examples of what an express warranty might cover include promises about:
- The quality, condition, and performance of the product.
- What the product can do and for how long it will perform as expected.
- Whether servicing, the supply of any parts, or identical products will be available to the consumer.
Express Warranty Example
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Imagine you run a business selling canvas tote bags. One day, a potential customer asks how much weight the bag can carry. You confidently tell them it holds 20 kilograms. This statement represents a promise that the bag can safely carry up to 20kg. In 2025, if the customer purchases the bag and uses it to carry 20kg of items, only to have the straps break, you will have breached the express warranty you made. |
Are Express Warranties the Same as Consumer Guarantees?
The consumer guarantees provided under the ACL are automatic rights that consumers enjoy when they purchase goods and services from Australian businesses. These guarantees ensure that your products meet certain minimum standards.
In addition to these basic rights, you may choose to offer extra guarantees that go beyond what the consumer guarantees require. When you do, you are essentially creating an express warranty.
It’s important to note that while you can offer consumer guarantees without providing additional express warranties, you cannot offer express warranties without being subject to those same consumer guarantee obligations.
All these stipulations are covered under the ACL, meaning there are real legal consequences for failing to comply.
This brings us to an important consideration…
What Happens if You Breach an Express Warranty?
Consumers have the same legal rights under the ACL for a breach of an express warranty as they do for a breach of a consumer guarantee.
The options available to a consumer will depend on whether they seek action against the supplier or the manufacturer of the product.
Supplier
Using the canvas tote bag example, if you are selling the bags directly from your store, you are the supplier. Should a customer return claiming a minor fault based on an express warranty you provided, they are entitled to remedies such as:
- Repair of the product
- Replacement of the product
- A refund
- Compensation for any losses incurred
For more serious or major faults, the consumer might be entitled to reject the product entirely and opt for either a refund or replacement, in addition to seeking compensation.
Manufacturer
If the express warranty was provided by the manufacturer of the canvas tote bags, then consumers can seek compensation directly from the manufacturer in the event of a fault.
A customer may claim compensation in the form of:
- An amount equivalent to the purchase price of the product;
- An amount reflecting the difference between the current value of the faulty product and either the lowest average retail price or the actual price paid;
- An amount that covers any foreseeable loss incurred due to the breach of the express warranty.
Ultimately, it’s the consumer’s choice which remedy to pursue, and they may even choose to take legal action under the ACL if their rights have been breached.
Can Warranties Be Implied?
It’s clear how a direct representation (an express promise) can give rise to a legal obligation. However, warranties can also arise indirectly through the context of the sale – these are known as implied warranties and are intrinsic to the consumer guarantees.
Implied warranties include promises such as:
- That a product will perform the purpose for which it was intended, and
- That a product will reasonably perform the specific purpose for which the consumer purchased it.
For example, if a customer buys a vacuum cleaner that fails to create sufficient suction to clean an average floor, this would breach the implied warranty of merchantability, potentially entitling the consumer to compensation.
Other Types of Warranties
Manufacturer’s Warranty
A manufacturer’s warranty, also known as a “warranty against defects,” is an additional guarantee that your business may offer consumers. This warranty assures buyers that if the goods supplied are found to be defective, your business will take corrective action.
Typically, a manufacturer’s warranty will promise that if defects are discovered, you will either:
- Replace the faulty product,
- Repair the issue by servicing the product, or
- Provide appropriate compensation to the consumer.
It is good practice to attach a specific time limit to a manufacturer’s warranty. Remember, this type of warranty does not necessarily need to be formalised in a lengthy contract – it can appear on the product’s packaging, labelling, or accompanying documents.
If you provide a warranty against defects and then try to get out of it, you may face action from the Australian Competition and Consumer Commission (ACCC) or find yourself in court for breach of contract.
Extended Warranty
Extended warranties, often marketed as a “product care package,” allow consumers to extend the manufacturer’s warranty period. You might have encountered extended warranty offers at car dealerships or electronics stores – remember, however, that these warranties are completely optional.
As a consumer in 2025, you should weigh whether an extended warranty offers any additional benefit beyond the comprehensive consumer safeguards already provided under the ACL. From a business perspective, it is imperative not to mislead your customers with extended warranties that simply reiterate rights they already have. For further guidance on avoiding misleading statements, see our article on How Can Your Business Avoid Misleading or Deceptive Conduct.
What To Take Away…
As a business operating in 2025, it is more important than ever to understand and comply with the ACL and its impact on your product warranties. Offering promises that go beyond the standard consumer guarantees creates an express warranty, which means you must be absolutely certain you can deliver on those assurances.
If you provide extra warranties – whether they are express warranties, manufacturer’s warranties, or extended warranties – you must be prepared for the legal consequences if you fail to meet your obligations. Ensure that your product descriptions, packaging, and related documents accurately reflect the warranties you intend to offer.
For businesses keen to improve their contract clarity and safeguard against potential ACL breaches, our Contract Review Service can help ensure that your warranty statements and terms of sale are in line with current legal requirements. Additionally, our guide on Website Terms and Conditions offers further insights into clearly outlining your legal promises to customers.
Staying updated on your obligations under the ACL means not only keeping up with legal changes but also regularly reviewing your consumer guarantees and warranty statements to ensure they remain accurate and enforceable in today’s competitive marketplace.
Sometimes keeping track of these legal details can be challenging! If you ever need expert advice or guidance on complying with consumer warranty requirements in 2025, feel free to get in touch with us to discuss your options.
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