The consumer law applies automatically to every business that operates in Australia. It creates a base level of guarantees that must be satisfied when conducting business. These guarantees apply to businesses that deal directly with consumers and in business to business transactions where the cost is less than $40,000.00.
The thing about these guarantees is that if they aren’t satisfied, the customer has rights to refunds and potentially compensation. You also can’t override these guarantees or try to disclaim this responsibility in your terms and conditions. They apply regardless of if you even have terms and conditions! So what are they? Well for service providers, you’re in luck as firstly, there are only three guarantees you must satisfy and secondly they really are in my mind, good business practice. They are:
1. Provide your services with due care and skill.
I know this sounds obvious, but it is important to understand what your client expects. These guarantees apply broadly to every service provider, so you must consider how this applies to your business. A consumer will expect you to have the appropriate qualifications and/or experience to provide your service as a start. You will also, at a minimum, be expected to not cause harm, damage or make matters worse. The level of expectation will also be linked to the price that you charge and the way that you deliver your services. For example, we might expect more from a provider that provides a one hour massage in an expensive day spa, than that providing a 15 minute massage at a market.
2. Provide the services within the time stated or within a reasonable time
Managing time frames has now become your legal responsibility. If you take appointments, you must be available to provide the services when you say you will be. If you have more flexibility with your time frames, and there is fluidity with your services you still need to provide the services within a reasonable time. What is reasonable depends upon a number of things. It will be measured against your usual time-frames, those in your industry, the nature of the work and responsiveness of the client and of course by any timeframes that are discussed between you.
3. Satisfy any guarantees
If you make any guarantees about your services you must satisfy them! A guarantee is a promise or a representation about your service that a customer relies on. The thing about guarantees is that you may not use the word guarantee, but you can make one inadvertently. I see this a lot in advertising and website content. For example saying you are the ‘best’ or ‘quickest’ on your website is actually representing this as a fact, and a consumer can imply that this is guaranteed. Meaning if you aren’t actually the best in their mind, they potentially have refund rights.
Even if you don’t make any guarantees they can be implied from a conversation with the client. If you agree to something that they say, you have made a guarantee. For example if you respond ‘yes’ when they ask ‘can you fix this?’ you have made a guarantee that you will.
While you can’t disclaim this responsibility as I said at the start, you can make it very clear that you are not guaranteeing certain outcomes. I recommend that this is done in your customer terms so that it is very clear what your service will or will not apply.
Understanding these legal obligations will assist you to implement measures in your business to firstly make sure you don’t break any of these obligations, but also so you exercise caution with your advertising to make sure you are clear to avoid making promises you can’t keep.
It will also assist you to comply with these obligations if you make sure you have a sound refund policy in place based on your legal obligations, insurance, and terms and conditions for your services.