Over what period does the 'fitness for purpose' term apply?



An express fitness for purpose term included in a contract will ideally address the issue of expiry of the contractor's liability for the warranty. It may be possible to create indefinite or even perpetual liability through the use of expressions like 'will at all times be reasonably fit for the intended purpose'. Such drafting will arguably vest the contractor with liability for a breach of a fitness for purpose warranty during the life of the completed works or the materials or goods supplied; a period of time which may be much longer than those set out in the various Limitations Acts.

A fitness for purpose term implied by common law will generally apply to goods and services at the time of delivery to the consumer. Failure to fulfil the requirements of the warranty within a reasonable time after delivery may lead to an inference that they were unfit at delivery and that the supplier was in breach of the contract at that point.

Remedies under statute are limited by the applicable limitation period specified in the relevant act. Consequently, unlike the position in contract or at common law, there will be greater certainty as to the period of potential liability where the terms are implied by statute. Under the
Australian Consumer Law, there are a number of remedies available against manufactures and suppliers if the goods and services do not meet the requirements of the consumer guarantees. The limitation period will depend on the type of action brought by the consumer.

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Updated 15 July 2014