Waiving Warranty on Second Hand Goods Questions

dtbnguyen on 31/07/2019 - 17:11
Last edited 31/07/2019 - 17:29

I recently had a discussion with a salesperson from the pawnbroking business. They said that they if an agreement is reached between their business and a customer then warranty rights can be waived. I was fairly certain that this was incorrect and decided to look this up. Based on what I'm seeing I should be correct right? Moreover, even if you go purchase and the receipt says that there is (Zero Day Warranty) this contract/agreement can be rescinded/challenged successfully?

I've heard arguments which said that if "proper/legal rights" are given to consumers then it pushes the cost of business up? Anyone have any stories/details about how much it may push up the cost of business to do things properly vs not legitimately?

waive warranty pawnbroker
Cash Converters - Sold Nintendo 64 with No Warranty, Immediately Faulty
https://www.ozbargain.com.au/node/189586

Misleading consumers about their rights Statutory rights are consumers’ rights which are implied in all consumer contracts by the Act. They cannot be changed, limited or refused by a seller.
It is against the law for a seller to do anything that leads consumers to believe their rights are limited, or do not apply – for example, by claiming that no refunds will be given under any circumstances.
Any misleading claims a business makes about a consumer’s statutory rights are invalid and do not affect a consumer’s right to obtain a remedy for a breach of a statutory condition or warranty
https://www.accc.gov.au/system/files/Warranties%20and%20refu…

Competition and Consumer Act 2010 (Cth)
The Australian Consumer Law ( schedule 2 of the Competition and Consumer Act 2010 (Cth)) applies to contracts for goods or services sold in the course of business up to a maximum value of $40 000. The consumer may be an individual or a company.
Where the value of the contract exceeds $40 000 the Act still applies if the goods are of a kind ordinarily bought for personal, domestic or household use or consumption. The most important limitation is that the Act only applies where the trader is a corporation (exceptions are contained in Sections 5 and 6). Most large stores are corporations while smaller local traders may not be.
The Act also excludes private sales and auctions. It is not possible for consumers to give up waive their rights under the Act, or for traders to exclude them. Where there has been a breach of a term implied by the Act a consumer has the right to rescind the contract, see: consumer remedies.
https://lawhandbook.sa.gov.au/print/ch10s03.php

General Discussion

Comments

  • bobbified on 31/07/2019 - 17:29
    +2

    If buyer and seller decide to form a contract to agree to waiving of any warranties, then why not?

    What is against the rules is where the seller misleads the buyer into believing that certain warranties or guarantees don't apply to the product/transaction, when it does.

    • dtbnguyen on 31/07/2019 - 17:45

      The purchaser (me) only found out about the (Zero Day Warranty) issue when he purchased the item via the receipt. Surely, you can challenge this?

      Purchasing items from this store is like playing Russian Roulette. You don't know whether you'll get a warranty or not prior to sale?

      • HighAndDry on 31/07/2019 - 17:57

        No - "by agreement" inherently means before the sale. So if you only find out on the receipt after you've already bought, that wouldn't count.

        On the other hand, this is a pawnbrokers. I wouldn't be too surprised if they just have a sign saying, effectively,: "Nothing is guaranteed to work, all sold in as-is condition, you can inspect it before buying, you're responsible for inspecting what you buy."

  • HighAndDry on 31/07/2019 - 17:41

    Technically not by agreement*, but the consumer guarantees only apply to the extent of "what would normally be expected for the type of product and cost" of the product. This includes any disclosures made by the seller. For example, if something is sold as "broken/for parts", obviously the purchaser isn't entitled to a refund because it doesn't work.

    Read the ACCC's page, especially the section on "Exceptions to Guarantees":

    https://www.accc.gov.au/consumers/consumer-rights-guarantees…

    knew of or were made aware of the faults before you bought the product

    So for example, if you buy something from the pawnbroker for 50% of its retail price and the seller says, "I've no idea if it works, I haven't checked, it could well be broken," then you don't have any recourse if it actually turns out to be broken.

    *but practically, yes, by agreement if the seller and buyer agree the product could well be broken before it's sold, the buyer buys anyway, then there aren't any real consumer guarantees for the sale.

    • dtbnguyen on 31/07/2019 - 18:11

      Found the following link which seems to contain several catch all clauses (and match up largely against Consumer Law Legislation):

      Defective Goods and Consumer Guarantees
      Goods will still meet the guarantee of acceptable quality if the seller alerts the consumer to the defect. Advertising a product as a ‘second’ or ‘second hand’ is not enough. You should explicitly describe the defect either before the time of sale, or display a written notice describing the product’s defect.
      This is particularly important with online sales where the consumer cannot examine the goods personally before purchasing them. For example, an online second-hand clothing store selling a jacket and including in the description ‘button missing’ would not be liable to the consumer for the defect.
      A consumer who can examine goods before purchasing them, and consequently identify any defects, is not entitled to rely on the consumer guarantee of acceptable quality. This exclusion is relevant for businesses selling second-hand goods from a traditional ‘brick and mortar’ shop. The goods sold will determine the level of inspection required. For instance, a product that is five years old is likely to need closer inspection than a relatively new product.
      The consumer can rely on the guarantee if he or she could not have noticed the good’s defect, even with the most thorough inspection.
      Second-hand products must also:
      * Match their description;
      * Be fit for a particular purpose that the consumer makes known;
      * Have repair facilities and spare parts reasonably available; and
      * Come with undisturbed possession.
      Key Takeaways
      If your business sells second-hand goods, the Australian Consumer law and consumer guarantees will apply to your business. As sellers cannot exclude consumer guarantees from the sale of second-hand goods, it is important that you understand the guarantees and your obligations. More information on the Consumer Guarantees and the ACL is available on the Australian Competition and Consumer Commission website.
      Questions? Get in touch with LegalVision’s specialist consumer lawyers on 1300 544 755.
      https://legalvision.com.au/i-sell-second-hand-goods-do-the-c…

      Surely, it's not strictly legal to run a bricks and mortar pawnbroking business where customers don't have any idea whether they'll have a warranty or not until after they've gained their receipt?

      • HighAndDry on 31/07/2019 - 19:04

        Blame the vagueness on the laws - the LAW makes the extent of the consumer guarantees vague, and for good reason businesses aren't going to try and give their interpretation of the law, they'd risk heavy penalties if they get it wrong.

        So, with that and the ACL in mind, emphasis on these parts of your quote:

        You should explicitly describe the defect either before the time of sale, or display a written notice describing the product’s defect.

        and:

        A consumer who can examine goods before purchasing them, and consequently identify any defects, is not entitled to rely on the consumer guarantee of acceptable quality. This exclusion is relevant for businesses selling second-hand goods from a traditional ‘brick and mortar’ shop.

        Basically if you're buying second-hand, had a chance to inspect the product, and the defect was able to be observed in an inspection, you effectively don't get the consumer guarantee.

        • dtbnguyen on 31/07/2019 - 19:27

          You're picking and choosing what you want to discuss. If you went to ANY store (second hand or not), all their documentation tells you that their goods come with warranties, but you did not know until you got your receipt whether or not you got a warranty or not you'd be unhappy? There's no way that this could possibly be in the spirit of the law or any form of ethics?

          unconscionable conduct Behaviour that takes unfair advantage of a vulnerable person in a contract or other transaction. The vulnerability can be due to factors such as poor education, disability, language difficulties or being affected by alcohol.
          https://www.lawhandbook.org.au/2019_00_00_05_glossary/#_idTe…

          • HighAndDry on 31/07/2019 - 19:29

            @dtbnguyen:

            You're picking and choosing what you want to discuss.

            No, I'm picking and choosing the relevant parts of the law. Specifically again from the very section you quoted:

            A consumer who can examine goods before purchasing them, and consequently identify any defects, is not entitled to rely on the consumer guarantee of acceptable quality. This exclusion is relevant for businesses selling second-hand goods from a traditional ‘brick and mortar’ shop.

            That fits a pawnbroker to a T.

            The vulnerability can be due to factors such as poor education, disability, language difficulties or being affected by alcohol.

            Were you uneducated, disabled, unable to understand english, or drunk when you bought it?

            Don't blame the pawnbroker for your ignorance of the law.

            • dtbnguyen on 01/08/2019 - 22:37

              @HighAndDry: Straw man arguments?

              The item purchased was for a nominal fee (less then the price of lunch) and the item works well so it doesn't really matter.

              That said, I had a funny feeling something was wrong and just wanted clarification (I think I'm going to make an inquiry with relevant people. For some strange reason I think OzBargain is going to be of limited help). The following seems interesting.

              The law overrides where retailers want to make the consumer think they cannot return goods for a refund with signs such as "no refunds" or "no refunds on sale items".
              The law extends to much more than just consumer guarantees. For example, it prohibits unfair terms such as those found with gym memberships and phone plans.
              https://www.smh.com.au/money/insurance/consumer-law-trumps-p…

              Importantly, subject to limited exceptions, it is not possible for consumer guarantees to be excluded; a term of a contract purporting to do so is void (s 64).
              https://www.australiancontractlaw.com/consumerlaw/guarantees…

              You seem to making a lot of assumptions. Many which feel off? I'm not that naive. I recently spent a few years researching an industry where 70-90% of operations are scams. I also know a lot of businesses operate under dodgy models but get away away with it because people are ignorant, no one refers them, or the relevant people can't or refuse to take action.

              waive warranty pawnbroker
              Waive warranty or not
              https://forums.whirlpool.net.au/archive/1883365
              https://www.fairtrading.nsw.gov.au/buying-products-and-servi…
              https://www.fairtrading.nsw.gov.au/buying-products-and-servi…
              void consumer guarantee legality
              https://www.smh.com.au/money/insurance/consumer-law-trumps-p…

              • HighAndDry on 02/08/2019 - 09:34

                @dtbnguyen: You're using a lot of words to try and work around what the ACCC and the law actually says, which, again, you quoted:

                A consumer who can examine goods before purchasing them, and consequently identify any defects, is not entitled to rely on the consumer guarantee of acceptable quality. This exclusion is relevant for businesses selling second-hand goods from a traditional ‘brick and mortar’ shop.

                Second hand goods from a physical store which you are able to inspect. This is the exact definition of a pawnbroker, other than cases where (in a previous thread) the product was shrink wrapped.

                That's it. It's not really more complicated than this and you're now just repeatedly circling the point.

                • try2bhelpful on 02/08/2019 - 09:50

                  @HighAndDry: A physical inspection, or even limited usage, may not uncover a defect; so I can’t see that all goods can be excluded from warranty with second hand stores or that a general comment can be made on a receipt. An intermittent fault on goods may become apparent during usage so it should be covered. The interesting thing is whether sold “as is” is legal if the fault is not identified by the seller.

                  • HighAndDry on 02/08/2019 - 10:22

                    @try2bhelpful: The exclusion applies if the good can be inspected and the defect can be observed by inspection, even if the purchaser doesn't actually find the defect. The seller doesn't have to specify or even mention the defect.

                    It's not sold "as-is" as that's a much more blanket exemption from consumer guarantees.

                    • try2bhelpful on 02/08/2019 - 14:11

                      @HighAndDry: What I was indicating is that a defect may not be observable by the person inspecting it and it depends on what would be considered observable to the average consumer. For a seller to cover themselves they should mention major defects that affect the product being fit for purpose. My point about “as is” is that you see this on a number of goods for sale but, if the device isn’t fit for purpose and the seller does not detail the defect, then can warranty be legally withheld?

                      • HighAndDry on 02/08/2019 - 15:05

                        @try2bhelpful:

                        if the device isn’t fit for purpose and the seller does not detail the defect, then can warranty be legally withheld?

                        It's not so much that the consumer guarantee is withheld, it's really that the consumer guarantee only extends to "reasonable given the condition, price, etc of the goods" in the first place, and the ACCC has decided that for second-hand goods with observable defects, the consumer guarantee's requirement of reasonableness already means such defects are not covered.

                        "Fit for purpose" in this case also depends on the condition of the goods. If you buy a fridge that's second-hand, looks to be from the 50's, and costs only $100, then even if the "purpose" is to keep stuff cold, you wouldn't be able to make a claim even if bottoms out at 17degs C.

                        Edit: In OP's case:

                        The item purchased was for a nominal fee (less then the price of lunch)

                        So applying the concept of reasonableness - bought second-hand, from a pawnbroker, in person so every chance to inspect, and only paid a nominal price - effectively the consumer guarantee would extend to maybe "doesn't burst into flames before leaving the store" and not much more than that.

  • [Deactivated] on 31/07/2019 - 18:30

    Not sure about your consumer rights but as a consumer, I treat all pawnbrokers/cashconverter/Gumtree/cash only/etc. transactions as "as is".

    After all, warranties are also only as good as the business providing the warranty.

    I'd like to see consumer protections such as accurate country of origin, honouring manufacturer warranties, and timely delivery be better enforced. If ACL and ACCC goes after everything, the whole consumer rights idea becomes a joke.

    This is one of those examples where trying to govern a pawn shop would just undermine the intent of consumer rights.

    • try2bhelpful on 02/08/2019 - 14:14

      Pawn shops still need to sell goods fit for purpose. If you buy a toaster you can, reasonably, expect it will cook toast and not burn your house down.

      • [Deactivated] on 02/08/2019 - 15:14

        If I didn't want my house to burn down, be infected by strange bugs, smell of fumigation chemicals, haunted by ghosts, unknowingly stashing drugs… I would stay away from pawn shops.

        When buying something someone else has used, it's nearly impossible to be certain. The cost of ensuring compliance and condition is prohibitive for a pawnshop so regardless of what the pawnshopkeep claims, it is buyer beware for me.

        • try2bhelpful on 02/08/2019 - 17:46

          I agree, buyer beware for me too. I would never buy anything electrical from a pawn broker, or an op shop either. However, I’ve bought clothes, and furniture, from op shops because I can clean them before use. However, I think the legal position is probably at bit more in the consumers favour for pawn brokers.

          I saw a Trilogy of a Terror in my youth and the third instalment really stayed with me.
          https://en.m.wikipedia.org/wiki/Trilogy_of_Terror

  • chumlee on 05/08/2019 - 22:10

    Depends on the context of discussion, but a business cannot contract out of its statutory obligations

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