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How Do Extended Warranties Work?

How Do Extended Warranties Work?

Extended warranties offer longer protection for customers against defective goods. However, consumer guarantees still apply. Find out more here.

18th August 2020
Reading Time: 2 minutes

When purchasing a good or service from a business, there different protections that cover you if there is an issue with the product. However, it can be confusing which one applies to you and which cover you should purchase. Read our guide below explaining extended warranties and how they work. 

What Is A Warranty?

According to the Australian Consumer Competition Commission (ACCC), a warranty is a voluntary promise provided by a business that sold a product or service to a customer. This promise is a right provided to the customer and is enforceable under Australian Consumer Law (ACL). However, it is essential to remember that a warranty is separate from consumer guarantees. The difference is that consumer guarantees apply regardless of a warranty provided by the business, and can apply even after the warranty period has expired. 

Manufacturers Warranty

Some businesses choose to provide a warranty against defects, known as a manufacturers warranty. This type of warranty protects customers that if the goods or part of the goods becomes defective the business will:

  • Repair or replace the goods (or part of them)
  • Resupply or fix a problem with any services provided 
  • Provide compensation for the customer

However, there is typically a time period for the warranty which eventually expires. 

Further, if a business creates a manufacturer warranty, they must stick to it. If they choose not to, you can bring an action against them under the ACL or for a breach of contract.

Warranty Requirements

Regardless of the type of warranty that applies to your situation, there are specific requirements that businesses must follow when creating a warranty. From 1 January 2012, written warranties against defects should be easy to read and in plain language. They must include the following information: 

  • The name, business address, contact number and email address of the person or business who is providing the warranty
  • The steps to make a claim under warranty, and what the business must do to honour this warranty claim
  • A statement outlining that the warranty does not exclude consumer guarantees, but is in addition to them 

Extended Warranties: Explained

An extended warranty is a fee that a customer pays to a business who will repair or replace parts of goods if there are any defects or failures in the product. However, the warranty period is usually longer than a regular warranty, meaning protection for longer. 

Although extended warranties might sound great, they are not mandatory. However, you may feel pressured to purchase one from a business. In the instance where a person or business places undue pressure on you or uses some form of unfair tactics to make you purchase the warranty, they risk breaching the law. Further, if they mislead you into paying for rights and protections already provided by consumer guarantees, they could also be breaking the law. 

Conclusion

An extended warranty offers great protection to the goods and services that you purchase from a business. However, keep in mind that you are covered by consumer guarantees, regardless of the promises included in the warranty. If you have any further questions or need assistance, speak to a warranty lawyer

Don’t know where to start? Contact a Lawpath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

Author
Katarina Dapcevic

Katarina is a Lawpath intern, working as a part of the content team. She is currently in her third year of a Bachelor of Laws and Communications (Journalism) degree at the University of Technology Sydney. Her passions lie in affordable and accessible legal services, allowing everyone to have access to justice.