Remedies Against Manufacturers

Minimum standards for goods are enforceable against manufacturers.

The ACL provides a right of action to a ‘person affected’ (which means the purchaser or a person who has received the goods as a gift) against a manufacturer who supplies faulty products.

This applies to goods that are not of acceptable quality, do not conform to a description, do not have spare parts or repair facilities or are in breach of an express manufacturer’s warranty under Section 271.

Under the law of contract the purchaser has no rights directly against a manufacturer because there is no contract with the manufacturer.

The legislation provides a statutory right to enforce minimum standards of quality against a manufacturer.

‘Manufacturer’ is extensively defined in Section 7 and includes an importer and a supplier whose brand appears on the goods.

The person affected can seek damages against the manufacturer under Sections 271-2 or, if the manufacturer has given an express warranty (usually a 12-month warranty) and require the manufacturer to replace or repair the goods.

If this does not happen, then the person can sue for damages for breach of the express warranty.

The damages claimable include the cost of returning the goods to the manufacturer.

The right to damages may be sought whether or not the goods are in their original packaging in accordance with Section 271(7).

When goods have been purchased for business purposes, the manufacturer’s liability to pay damages to the business consumer is not limited in the way that the retailer may be able to limit its damages, namely, to the cost of replacement or repair.

A claim for damages must be brought within three years of the date on which the defect became obvious or should have been detected as stated by Section 273.

Note this is not within three years of purchase.

Any attempt by the manufacturer to exclude these provisions is void Section 276.

Section 274 states if a retailer has to incur expense to meet a claim, the retailer has a right of indemnity against the manufacturer.

This means retailers are able to pass the replacing ad repairing goods back to manufacturers.

The same is true for damages arising from the defect.

Section 276A states If the claim relates to goods not of a kind ordinarily acquired for personal, domestic or household use or consumption, the manufacturer’s liability to the retailer is limited.

This limit means the manufacturer is only liable to pay the cost of replacement or repair of the goods – not damages caused by the defect.

However, Subsection 276A(2) states unless this limitation can be struck out if it would not be fair or reasonable in the circumstances.

A separate Part of the ACL provides rights against a manufacturer in respect of dangerous goods that cause injury, death or property damage.

The right to claim against a manufacturer is usually not very useful because the manufacturer may not be close to hand whereas the retailer will usually be in the locality.

So it is usually simpler to complain of faulty goods or services to the company that supplied them.

While it is often possible to return faulty good yourself, in more complicated cases it may be worthwhile getting legal advice as to your rights.

This is especially true if you have suffered substantial loss or damage as a result of a defective item.

Rights against Manufacturers in respect of Dangerous Goods (product liability)

Sections 138-150 of the ACL deal with liability of manufacturers and importers for goods which have a safety defect that causes injury.

Section 9 defines goods as having a safety defect if their safety is not such as persons generally are entitled to expect, having regard to things like their marketing, packaging, price, instructions that come with the goods and their normal use.

Who can claim for damage caused by defective goods?

An individual who has suffered personal injuries can claim damages under Section 138.

Further, a person dependant on the injured person can claim against a manufacturer (which includes an importer) for damages under Section 139.

Additionally, if goods are defective and cause damage to a person’s good, or their real property an action for damages can be brought under Section 140-141.

If a person dies as a result of injuries caused by defective goods, the cause of action survives for the benefit of his or her estate under State and Territory legislation under Section 145.

However, if the case is one where workers compensation law would apply then Section 146 states the law above does not apply.

You should seek legal advice before attempting to make a court claim for damages under the law(s) above.

Unknown manufacturer

Section 147 deals with the scenario where a person has purchased goods but the manufacturer of them is unknown.

If the manufacturer is unknown, the consumer can require the retailer to provide the name of the manufacturer.

If the retailer fails to do this (within 30 days) then the retailer is taken to be the manufacturer.

Defences

Section 142 sets out four key defences a manufacturer may use to defend a claim over defective goods.

The first defence is if defect did not exist at the time of supply by the manufacturer.

The second is if the defect existed only because there was compliance with a mandatory standard for the goods.

The third is that the state of scientific or technical knowledge at the time when the goods were supplied by the manufacturer was not such as to enable the defect to be discovered.

And the fourth is where the goods were incorporated as part of other goods and those other goods were defective.

If the reason why the goods were defective was because of compliance with a Commonwealth mandatory standard, the Commonwealth can be made liable for damages under Section 148.

Damages may be reduced to the extent that the injured party was at fault in failing to safeguard his or her own safety in accordance with Section 137A of the Competition and Consumer Act 2010 (Cth).

Manufacturers facing claims over defective goods should seek legal advice, rather than relying on this article as a defence.

Time limits

An action must be brought within three years of a person becoming aware, or, when they ought reasonably to have become aware, of the alleged loss, the defect and the identity of the person who manufactured the goods Section 143(1).

A claim cannot be brought more than 10 years after the supply by the manufacturer of the goods Section 143(2).