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Implied guarantees for services

The Australian Consumer Law (Cth)

Sections 60 – 62 of the Australian Consumer Law ( Schedule 2 of the Competition and Consumer Act 2010 (Cth) ) imply several guarantees into every contract for services. The supplier guarantees that services will be rendered with due skill and care; that materials used will be fit for the purpose for which they are required and that supply will occur within a reasonable time.

A consumer may explain the particular purpose for which she or he requires the services in order to show that he or she relied upon the supplier’s judgement. There is an implied guarantee in the contract that the materials and services will be reasonably fit for that purpose and are of a nature and quality that might reasonably be expected to achieve that result.

The Australian Consumer Law (Competition and Consumer Act 2010 (Cth) Schedule 2 s 4) defines services to include any rights, benefits, privileges or facilities that are given by a trader under a contract for, or in relation to:

  • the performance of work (with or without the supply of goods);
  • providing facilities for amusement, entertainment, recreation or instruction;
  • where payment is made in the form of a royalty, tribute, levy or similar;
  • banking services;
  • a contract in relation to the lending of money.

However, the definition does not include rights or benefits that are provided by the supply of goods or the performance of work under a contract of service.

Services not covered by guarantees under the Australian Consumer Law are:

  • a contract of insurance;
  • the transportation or storage of goods for the purposes of a business, trade, profession or occupation carried on or engaged in by the person for whom the goods are transported or stored.

[Competition and Consumer Act 2010 (Cth) Schedule 2 s 63]

Under the Fair Trading Act 1987 (SA) liability for suppliers of recreational services can be modified, excluded or restricted, notwithstanding the provisions of the sections 60 and 61 of the Australian Consumer Law (see Fair Trading Act 1987 (SA) s 42). Recreational services includes services consisting of participation in sporting activities or similar leisure pursuits or any other activity that involves a significant degree of physical exertion or risk, undertaken for recreation, leisure or enjoyment. Suppliers of such services can modify liability provided the term is: (i) in the prescribed form; (ii) brought to the attention of the consumer prior to the provision of the services and (iii) agreed to by the consumer in the prescribed manner.

Implied guarantees for services  :  Last Revised: Mon Mar 28th 2011
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