Warranty provisions cover your rights and obligations and those of the supplier in relation to defects that may be identified in the goods or services after delivery.
Warranties may provide contractual rights for you to:
• reject goods and be paid a refund
• have defects repaired
• have the goods or services replaced.
Generally, contracts stipulate the time period after the acceptance of goods or services in which you can make a claim for warranty action.
When managing a contract, it is vital that you are familiar with the specific provisions in your contract that relate to warranties and fitness for purpose.
You should promptly and diligently review the delivery and acceptance of goods to ensure that you have received the correct items in the right quantity, in good repair, at the agreed time and in accordance with any other contractual provisions (eg packaging, location for delivery). You may need to use a suitable technical adviser to assist you to determine if the goods meet the contract specification. Some entities may have a formal quality control or quality inspection process which will provide advice about the acceptance of goods.
If the contract is for delivery of services, the contract manger should promptly compare the services that have been delivered to the service standards contained in the contract to ensure that the contractual requirements have been met. This may involve seeking feedback from user representatives or gathering direct evidence about the standard of services by methods such as site inspections, spot checks or other forms of service audit.
If goods or services need to comply with an Australian or international standard, you must make reasonable enquiries to determine compliance with that standard. This includes gathering evidence of relevant certifications and periodic auditing of compliance by an independent assessor (see CPRs paragraph 7.26).
If the goods or services do not meet the expected standard, you must strictly adhere to the contract provisions, particularly, provisions on:
• the rejection of goods or services, paying particular attention to the time frame for accepting or rejecting the goods or services
• notices that must be given to the supplier
• any time periods that apply for the supplier to remedy the defects
• any impact that the defects may have on the amounts payable under the contract.