The Consumer Law Reform Bill was reported back on by the Commerce Select Committee at the end of last year.
It has not yet had its third reading, but is expected to pass into law with little or no further amendment. One of the changes in the Bill from its previous version relates to extended warranties. While this change is not significantly different to the position that was originally signaled, it is a substantial change to what was contained in the prior version of the Bill. The Bill now requires retailers who sell extended warranties (among other things) to provide “a summarised comparison between the relevant Consumer Guarantees Act 1993 guarantees and the protections provided by the extended warranty agreement”.
The ability to provide a simple comparison of such matters is not straightforward. This is because there are very broad and generalised protections available under the Consumer Guarantees Act 1993 that need to be compared with the specific protections available under an extended warranty. For example, under the Consumer Guarantees Act 1993, there is a guarantee that goods will be of acceptable quality, which, broadly, includes an element of durability that a reasonable consumer would regard as acceptable. However, under an extended warranty, there is a defined period of cover (e.g. three years after expiry of the manufacturer’s warranty).
What this means is that retailers who sell extended warranties will have to use judgement in deciding how to frame and make comparisons between the relevant Consumer Guarantees Act 1993 guarantees and the protections provided by the extended warranty.
This is something that our business law team would be happy to help with.
Our thanks to Chris Taylor for writing this article