Ask LH: Who Handles The Warranty If A Company Goes Out Of Business?

Hi Lifehacker, If you purchase a product from a manufacturer who no longer is in business and another company has taken over that product who is responsible for the warranty? Thanks, Warranty Worries

Faulty product picture from Shutterstock

Dear WW,

It’s hard to give a precise answer as the outcome can vary depending on a range of factors. Generally speaking, if the product was still in warranty when the new company took over, it should be willing to meet the original terms.

For physical goods, your first port of call should be the retailer that sold you the product. Any business that sells goods or services in Australia must comply with consumer guarantees, which means they are fit for a specified purpose, match their description and aren’t faulty.

As the ACCC explains in its Warranties & Refunds guide:

Each sale is a contract between the seller and the consumer. So if the seller breaches the contract by providing goods that do not meet a statutory warranty or condition, it is their responsibility to provide a remedy. If a seller has to return goods to a manufacturer for assessment or repair, the seller should arrange delivery.

In other words, it is the seller’s responsibility to chase up the new company, not yours. While they sometimes beg to differ, retailers are not supposed to palm the customer off to the manufacturer. In the event that the manufacturer no longer exists, you should still be entitled to a monetary refund.

Online purchases can be a bit trickier; particularly if the seller and manufacturer are both based overseas. Consumer law states that any goods and services bought online must meet the same statutory conditions and warranties as for other kinds of sales — but getting everyone to play by the rules is easier said than done.

Receiving a favourable outcome in a warranty dispute can be exceedingly difficult when dealing with a foreign seller. This is one of the reasons why it sometimes pays to buy locally even if it means spending a bit more.

The ACCC has plenty of in-depth information about consumer rights on its website. If you hit a brick wall, your best bet is to contact the consumer affairs department for your state. Good luck!


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