Are You Entitled to a Warranty from an International Vendor?

When the law of contracts, sales and commerce evolved, international transactions were something of a rarity. There was no e-commerce, and most transactions between parties from different jurisdictions were made face-to-face, at a dockside or trading post. 

Now, however, international transactions are commonplace. Not only do companies and large commercial deals occur between parties who are often separated by thousands of kilometres and international borders, but ordinary consumers buy goods every day where the vendor is located overseas. Often, consumers are even unaware of the location of the party with whom they are transacting.  

As the landscape of trade and commerce evolved into today’s globalised economy, it was necessary for governments to ensure buyers and sellers had adequate legal protections. It was not until 2010 with the introduction of the Australian Consumer Law (ACL) that consumer protections were standardised across the country.  

The ACL does not merely apply to end-user ‘consumers’. It can even apply to large business transactions, and gives businesses a very expansive remit to seek redress. 

The ACL sets out certain consumer protections which businesses, even in contract, cannot take away. For goods, these include: 

• Acceptable quality, meaning that a product sold to a consumer must be safe, durable, and free from defects, among other things. 
• Fit for purpose – Applies when a consumer tells a business that they want to use a product for a particular purpose and buys the product based on the advice of the business. or the business advertises that the product can be used for a particular purpose.  
• Matches description – Any description of a product, whether written or spoken must be accurate. 
• Matches sample or demonstration – A product bought based on a sample or demonstration must match the sample or demonstration model. 
• Repairs and spare parts – This applies to the manufacturer or importer and means that they must provide spare parts and repair facilities for a reasonable time after purchase. 

For services, these consumer guarantees include: 

• Due care and skill – Service providers must carry out all services with an acceptable level of care and skill. 
• Fit for a particular purpose – Applies in the same way as for products (see above). 
• Provided within a reasonable time – In the case that there is no agreed upon timeframe, the service must be provided within a reasonable time. 

You may also take action against an international vendor for breach of a particular contractual term, such as if the vendor performs their end of the contract later than they undertook to do so (e.g. they are negligent so as to delay an overseas shipment). 

When it comes to purchasing goods or services from overseas, it is important to note that the ACL applies to anyone conducting business within Australia, include overseas entities. This means that, for example, if an overseas supplier sells you a car, whether you are an importer or an ordinary consumer, and it is substantially faulty within a year of purchase, you have a cause of action in an Australian court against that supplier. 

Courts and the Australian Consumer and Competition Commission can take action against a company which has breached the Consumer Law while trading in Australia. 

There are other options open to you to resolve or prevent an international commercial dispute: 

• Arbitration: arbitration is a process by which an independent, neutral arbiter hears and decides how a commercial dispute should be resolved. Australia is subject to a number of international treaties which govern the process of arbitration with parties from other countries. The jurisdiction of international arbitration courts and their recognition under Australian law, and that of other countries where the other party might reside, is complicated and legal professionals will be able to advise whether arbitration is possible, enforceable or worthwhile.  

• Use financial and payment infrastructure with built-in safeguards – payment systems like PayPal, or e-commerce websites, allow you to make claims against a person to whom you have paid money whom you allege has provided defective goods or inadequate services. PayPal is one example of a service which provides such a facility.