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A service is covered if:
the person or business you bought it from sold it as part of a professional activity, including non-profit activity; and,
it cost up to $40,000; or,
it cost more than $40,000 and is the kind of service normally bought for personal, domestic or household purposes such as car repairs, landscaping, dry-cleaning or legal services.
You are also covered when you use 'recreational services' involving physical activities such as fitness classes at a gym, working out with a personal trainer, bungee jumping and horse riding. However people or businesses providing these kind of services can sometimes limit their responsibilities. You should read the terms and conditions in contracts for these services carefully.
A service is not covered where:
the service was bought before 1 January 2011 - These are covered by laws that were in force before 1 January 2011;
services costing more that $40,000 which are for commercial use such as installation of farm irrigation systems or factory machinery repairs:
transportation or storage of goods for your business, trade, profession or occupation; or,
insurance contracts.
The person or business who sold you the service, the supplier, guarantees the service. This means they are responsible for fixing a problem when the service does not meet a consumer guarantee. They guarantee to provide services:
with due care and skill;
which are fit for purpose; and,
within a reasonable time, when no time is set.
'Due care and skill' means the supplier must:
use an acceptable level of skill and technical knowledge when providing service; and,
take all necessary care to avoid loss or damage when providing the services.
For example - A consumer hires a painter to paint their house. Before starting the job, the painter does not remove all of the old, flaking paint. Six months later, the new paint starts to flake. The painter has not met the 'due care and skill' guarantee, as they did not use a level of skill that would be expected of a reasonable painter. While painting the house the painter also knocked over a can of paint, which spilt over a newly paved driveway. The painter has not met the guarantee and must fix the damage.
'Fit for a particular purpose' means the service will achieve the result you were told it would. For example - A consumer asks a carpenter to build a carport to cover their 4WD vehicle which is 2m wide. If the carpenter builds a 1.8m wide carport that does not cover the vehicle, the carpenter will not have met the 'fit for purpose' guarantee.
Another example is if a consumer tells an eye surgeon they want to be able to drive without glasses, and they are assessed as suitable for laser surgery, and undergoes the surgery, if the consumer's vision does not meet the standard for driving without glasses, the surgeon will not have met this guarantee.
This guarantee will not protect you if you did not rely, or it was unreasonable for you to rely, on the supplier's skill or judgement when agreeing to a particular service. For example - it may not be reasonable for you to rely on a receptionist in a large company for advice about which service is suitable for your needs.
The 'fit for a particular purpose' guarantee does not apply to professional services provided by qualified architects or engineers. However, an architect or engineer that provides a service outside their area of professional expertise, such as building services, must still meet the guarantee. Architects and engineers must still provide services with due care and skill.
A contract or agreement for the supply of services usually states when the services will be provided and the date they will be completed by. If not, the supplier guarantees to supply the service within a reasonable time.
What is 'reasonable' will depend on the nature of the services. For example - The time needed to build a house will be longer than the time to lop a tree branch.
A business does not have to give you a refund if you simply change your mind about a service, unless they have a policy to offer a refund, replacement or credit note when this happens.
You have the same rights as a person who has bought the service directly.
The person or business who sold you the service, the supplier, guarantees the service. This means they attempt to put the situation right when the service does not meet a consumer guarantee. The supplier must provide a 'remedy'. Common remedies are refunds and repairs.
Whether you get a refund or other 'remedy' depends on whether the problem is a:
major failure; or,
minor failure.
Consumer guarantees apply to both. When a service does not meet a consumer guarantee, you may also be able to claim for compensation for your costs caused by the problem. This is usually for financial costs but can also include other costs, such as lost time or productivity.
A supplier or manufacturer must not tell you that a consumer guarantee:
does not exist;
may be excluded; or,
may not have a particular effect.
This means 'no refund' signs and similar signs are unlawful, because they imply that you cannot get a refund under any circumstances, even when there is a major fault with the service. Signs that read 'No refunds will be given if you have simply changed you mind' are acceptable.
A major problem with service is when:
a reasonable consumer would not have bought the services if they had known the nature and extent of the problem. For example - A reasonable consumer would not pay to have acrylic nails attached if they knew the nails would fall off within an hour;
the services are substantially unfit for their normal purpose and cannot easily be made fit within a reasonable time. For example - A carpet cleaning service changes the colour of the consumer's carpet in some places;
the consumer told the supplier they wanted something for a specific purpose but the services, and any resulting product, do not achieve that purpose and cannot be easily or within a reasonable time, be made to achieve it. For example - A consumer tells a pay televesion company they want to watch the Olympics. They sign a 24 month contract but the Olympics are over before the company installs the service;
the consumer told the supplier they wanted a specific result but the services, and any resulting product, do not achieve that result and cannot easily or within a reasonable time, be made to achieve it. For example - A consumer asks a technician to increase the memory capacity of the consumer's computer, but when installing an extra drive the technician damages the hard drive, which will take 6 weeks to repair, but the consumer needs the computer within a week; or,
the supply of the services has created an unsafe situation. For eample - An electrician incorrectly wires wall sockets in a consumer's kitchen, which makes the electrical outlets unsafe.
When there is a major problem you can choose to:
cancel the service contract and get a refund; or,
keep the contract and get compensation for the difference in the service delivered and what they paid for.
The consumer gets to choose, not the supplier. For example - A consumer has signed a building contract that sets out specifications for a new house. When the house is completed, the consumer notices a few windows are not in the right place. Because the builder has not met the standard required by the contract, the consumer is entitled to compensation.
For minor problems that can be fixed, you cannot cancel and demand a refund immediately. You must give the supplier an opportunity to fix the problem. They must do this:
free of charge; and,
within a reasonable time.
This depends on the circumstances. For example - A reasonable time to fix a problem with a haircut would be much shorter that the reasonable time to fix a problem with landscaping. If the supplier refuses to fix the problem or takes too long, you can:
get someone else to deliver the service and ask the supplier to pay reasonable costs; or,
cancel the contract and get some or all of your money back, if you have already paid. If you have not paid yet, or only partly paid, you can refuse to pay for the defective services at all, or pay less than the agreed price.
A reasonable cost would be within the normal range charged by suppliers and include the cost of repair and any associated costs.
A supplier or manufacturer does not have to put a situation right when they did not meet consumer guarantees due to something:
someone else said or did, unless it was their agent or employee; or,
beyond human control that happened after the services were supplied to you.
However, they must always provide a service with due care and skill. For example - It takes a qualified painter 3 weeks to paint a house but the job has taken 4 weeks. The sole reason for the delay was the weather, which is outside the painter's control. In this case the consumer would not be entitled to a remedy.
A contract for services is cancelled when you tell the supplier that you intend to cancel it either verbally, in writing or, if this is not possible, by any other means. You can cancel a contract for services at any time, however you cannot cancel a service if the problem is minor and can be fixed.
Cancelling a contract for services gives you the right to a refund. The amount will depend on whether some or all of the services provided were unsatisfactory, or provided at all. For example - A hairdresser has cut and permed a consumer's hair. The cut is good but the perm has 'fallen out' after a day. The consumer must pay for the cut but not the perm, as another hairdresser will not need to cut the hair to fix the problem.
When you cancel a contract for services that includes goods, you must return the goods to the supplier. You are entitled to a refund of any money or other type of payment that you have made for the goods. If returning the goods involves significant cost, the supplier must collect the goods at their own expense.
Consequesntial loss is the cost to you caused by the problem with the goods or services. Compensation is usually for financial costs, but can include other costs such as lost time or productivity.
A supplier will have to pay for losses that:
could have been expected to result from a failure to meet a consumer guarantee; and,
were reasonably foreseeable.
In other words, you can get compensation for losses that would probably result from the supplier's failure to meet the guarantee. They would not have to pay for:
problems unrelated to their conduct or the goods they supplied; or,
losses caused by something completely independent of their business, after the goods left their control.
For example - A consumer recently bought a car, which leaked oil on the driveway. A neighbour's dog ran through the oil and into the house, dirtying the carpet. The car dealer would not have to pay for the carpet cleaning, as the dealer could not predict that the dog would run through the oil and into the house, the cost was not reasonably foreseeable.
Another example is where a consumer's washing machine breaks down due to a fault. As a result, there is water damage to carpet in part of the house. The supplier will be responsible for the cost of replacing the carpet damaged by the flooding from the faulty washing machine.
You can apply directly to the supplier for compensation. If the supplier declines or an agreement cannot be negotiated, you can take the matter to formal dispute resolution services or pursue legal action.
It can be hard to put a dollar value on the consequential loss. Compensation should put you in the position you would have been in if the goods or services had met the consumer guarantees. For example - A consumer used a liquid cleaner according to instructions on the package to remove a stain on new curtains but the product badly damaged the curtains. As the curtains were new, the supplier would probably have to meet the cost of replacement. Compensation would be less for curtains that were in a poorer condition rather than being new.
A supplier cannot write a term into their sales contract that says they will not be responsible for extra loss suffered. If they attempt to do so, they may be misleading you about your legal right to compensation. Misleading conduct is unlawful and penalties apply to such conduct.
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