Risk on Faulty Goods

These days, small businesses can easily become importers.  As a small business operator, you could import a container of goods and sell them through your business or by your e-commerce website to customers all over Australia.

Under the Australian Consumer Law, you are deemed to be an “importer”.

The Australian Consumer Law deems importers to be the manufacturer of the goods in some circumstances.  Importers may be liable for defects in the goods they import, as if they were the actual manufacturer.  This could occur where the manufacturer does not have an office in Australia or the importer applies their own branding to the product.

Under Australian law the importer is responsible for product safety and liability issues and is exposed to potential claims resulting from any defects in the goods it sells.

Every business in Australia that sells goods and services to “consumers” are deemed to be covered by a warranty that the goods are free from defect and fit for their intended purpose.  The Australian Consumer Law does not allow you to exclude that warranty in your terms of contract with your customers.

It is possible that claims under the deemed warranty can be passed back up the chain of supply by the importer.

In practice, an importer may encounter difficulties in enforcing those rights where the manufacturer is located overseas or can hurt your business by refusing to supply you with any further goods, if you proceed with a claim.

This highlights that importers should undertake due diligence on the manufacturers and other businesses that you are dealing with overseas to ensure that those businesses will compensate you for any claims that you may encounter relative to products that they have supplied to you.

If we can help guide you in any way, please call Kennedy Barnden on 02-4365 6789.