Product recall obligations for retailers and suppliers

By Peter Stewart, Principal, Coleman Greig Lawyers and Stephen Booth, Principal, Coleman Greig Lawyers

Stringent safety standards bind all manufacturers, particularly in developed countries like Australia. However, sometimes consumer goods or products slip through this net, occasionally with disastrous consequences!

What do I do as a retailer?

If you become aware of an issue with a product – for instance, incorrect labelling, faulty seals, etc it may be useful to get in contact with your supplier and see whether the product has passed safety standards. If you realise that a product has been recalled, then you should stop selling it immediately. 

If the product doesn’t meet safety standards you’re obligated to provide any customers who have purchased the item with a refund or replacement that meets the relevant standards. You can contact the Australian manufacturer of the goods to seek reimbursement of this cost. 

Depending on your contract for supply you may be able to return the stock as not being of acceptable quality.

What do I do as a supplier?

Under Australian Consumer Law, where a product is a consumer product and the supplier becomes aware that the product will or may cause injury to a person or that a reasonably foreseeable use of the product may cause injury to any other person or that the product does not comply with the relevant safety standard, there is an obligation on the supplier to take effective action (generally a product recall) and to notify the Commonwealth Minister within two days of taking action to recall the products.

If you have any questions regarding your obligations for dealing with safety defects and product recalls please contact: 

Peter Stewart, Principal, Coleman Greig Lawyers
Phone: +61 2 9895 9258
Email: pstewart@colemangreig.com.au 

Stephen Booth, Principal, Coleman Greig Lawyers
Phone: +61 2 9895 9222
Email: sbooth@colemangreig.com.au 

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