Understanding Consumer Guarantees for Service-Based Businesses

If you're running a service-based business in Australia, it's essential to understand the obligations imposed by the Australian Consumer Law (ACL). Whether you're a solo consultant, digital agency, or a growing professional services firm, you are likely considered a supplier under the ACL. That means your clients (even business clients) may have rights you cannot contract out of.

This blog outlines the key consumer guarantees that apply to services and what you need to do to stay compliant.

What Are Consumer Guarantees?

The ACL provides automatic guarantees for consumers. These apply whether or not your contract mentions them.

For services, the law guarantees that they will be:

• Provided with due care and skill

• Fit for any purpose the client made known before engaging you

• Supplied within a reasonable time (if no time frame is specified)

These guarantees apply automatically when services are purchased for under $100,000 or if they are ordinarily for personal, domestic, or household use. Even if your client is another business, the ACL may still apply.

What You Can’t Do in Your Contract

You cannot exclude these consumer guarantees - not with fine print, disclaimers, or a “no refund” policy. If your service doesn’t meet the guarantees, your client may be entitled to a repair, replacement, or refund. Attempting to contract out of these rights could lead to legal action or penalties.

That means phrases like “no refunds under any circumstances” or “we take no responsibility” are likely to be in breach of the law.

Aligning Your Contracts with the ACL

Instead of trying to avoid responsibility, your contract should:

• Clearly define the scope of your services

• Avoid one-sided exclusions of liability

• Include a process for addressing complaints or dissatisfaction

• Set realistic expectations about outcomes and timelines

If you're not sure whether your current contract is compliant, it’s worth getting it reviewed.

Final Thoughts

Understanding your obligations under the ACL isn’t just about avoiding penalties. It’s about building a legally robust and trustworthy business.

Our lawyer-drafted templates are built with the ACL in mind. You can explore our template library here or you can book a strategy call to get tailored advice.

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This blog is intended for general information purposes only and does not constitute legal advice. The content is based on Australian law and may not be current at the time you read it. Legal requirements may vary depending on your circumstances. Always seek independent legal advice tailored to your specific situation before acting on any information provided.