A guide for businesses and legal practitioners
Second-hand, leased or hired goods
Second-hand, leased or hired consumer goods
supplied in trade or commerce are covered by the
guarantee of acceptable quality, but age, price
and condition must be taken into account.
EXAMPLES
• A consumer buys a second-hand washing
machine for $ from a shop. The supplier
said it was two years old and in good
condition but it breaks down after two
months. Given the price of $ for the
machine, a reasonable consumer would
expect to get more than two months’ use from
this machine. The consumer would be entitled
to a remedy from the supplier.
• A consumer pays to hire a steam cleaner for
one day to clean her carpet but the machine
does not generate steam and leaks. She
is entitled to a remedy because the steam
cleaner is not of acceptable quality.
• Two tourists hire a campervan to tour
Australia for five weeks. Fifty kilometres
along the road, the van breaks down. A
mechanic says the van has not been properly
maintained or serviced for some time. The
tourists would have the right to a remedy.
When the guarantee of acceptable quality does
not apply
• Goods fail to be of acceptable quality if:
– the consumer causes them to become
of unacceptable quality or does not take
reasonable steps to prevent them from
becoming of unacceptable quality
– the consumer uses the goods in an
‘abnormal’ manner
– the consumer examines the goods and
that examination should reasonably
have revealed that the goods were not of
acceptable quality
– the supplier informs the consumer of
a particular fault and the consumer
still agrees to buy them (however the
guarantee may apply if there is a
different fault).
• The supplier alerts the consumer to any
hidden defects
Some goods may not be of acceptable
quality due to problems already known to the
supplier—for example, goods with cosmetic
defects sold as ‘seconds’.
Defective goods can be sold, usually for
lower prices, if the consumer is alerted to the
defects before sale. For instance, the supplier:
– informs the consumer before selling the
goods; or
– displays a written notice with the goods.
This must be clearly presented, legible
and expressed in plain language.
It is not enough to simply describe the goods
as ‘seconds’, ‘sale’ items or ‘as is’. However, a
consumer is assumed to be aware of defects
if a written notice setting out the defects is
displayed with the goods.
When a consumer is alerted to defects in
goods before sale, they will not have the right
to a remedy if those particular defects later
cause problems with the goods.
However, the consumer may be entitled to a
remedy for a different fault.
EXAMPLE
• A consumer finds a bargain in a shoe shop—
shoes labelled as ‘seconds’. A tag attached
to the shoes advises there is a problem with
the stitching. He buys the shoes. When the
stitching splits, he cannot claim the shoes
were not of acceptable quality. However, he
may be entitled to a remedy if another fault
develops, for example the sole comes loose.
• The consumer examines the goods
A consumer is not entitled to a remedy if they
had an opportunity to examine the goods
before purchase and did not find defects that
they should have noticed.
EXAMPLE
• Second-hand goods and antiques are often
sold on an ‘as-is’ basis. An antiques dealer
is not required to give a remedy for defects
that a consumer should have noticed when
examining the goods, such as chipped
surfaces or faded paint.
The amount of effort that a consumer should
make examining goods, if given the opportunity,
depends on the nature of the goods. For new
goods, very limited or no examination would be
expected.