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Major Failure for a Motor Vehicle under the Australian Consumer Law (NSW)

The Australian Consumer Law (ACL), which is part of the Competition and Consumer Act 2010 (Cth), provides robust protections for consumers purchasing goods and services, including motor vehicles. One of the key concepts under the ACL is the notion of a "major failure." Understanding what constitutes a major failure for a motor vehicle is crucial for both consumers and businesses.

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Definition of Major Failure

Under Section 260 of the ACL, a major failure occurs when:

  1. The goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure.

  2. The goods depart significantly from their description, sample, or demonstration model.

  3. The goods are substantially unfit for their common purpose and cannot easily be made fit within a reasonable time.

  4. The goods are unfit for a specific purpose that was made known to the supplier and cannot easily be made fit within a reasonable time.

  5. The goods are unsafe.

Practical Application to Motor Vehicles

Applying these criteria to motor vehicles, a major failure might include situations where:

  • Significant Mechanical Issues: If a new car has a major engine defect that renders it inoperable or unsafe, this would likely be considered a major failure. For example, if the engine seizes within a few weeks of purchase due to a manufacturing defect, this would meet the criteria.

  • Safety Concerns: If a vehicle has a critical safety issue, such as faulty brakes or airbags that do not deploy, it would be deemed unsafe and thus constitute a major failure.

  • Non-Conformity with Description: If a vehicle is advertised as having certain features (e.g., advanced safety systems) but these features are missing or non-functional, this would be a significant departure from its description.

  • Unfit for Purpose: If a consumer purchases a vehicle specifically for towing heavy loads, and it is unable to perform this function due to a design flaw, it would be unfit for the specific purpose made known to the supplier.

Remedies for Major Failure

When a motor vehicle has a major failure, consumers are entitled to remedies under the ACL. These remedies include:

  • Refund: The consumer can reject the vehicle and request a full refund.

  • Replacement: The consumer can opt for a replacement vehicle of the same type and value.

  • Compensation: The consumer may seek compensation for any loss or damage suffered as a result of the major failure.

Steps to take if experience a Major Failure

  1. Document the Issue: Keep detailed records of the problem, including photographs, repair invoices, and correspondence with the dealer or manufacturer.

  2. Notify the Supplier: Inform the dealer or manufacturer in writing about the issue and your intention to seek a remedy under the ACL.

  3. Seek Independent Assessment: If necessary, obtain an independent mechanical assessment to support your claim.

  4. Contact NSW Fair Trading: If the supplier does not resolve the issue, lodge a complaint with NSW Fair Trading for assistance.

  5. Contact Arida Lawyers:  Contact Arida Lawyers, who have extensive experience in assisting clients with defective motor vehicle disputes.


Understanding what constitutes a major failure for a motor vehicle under the ACL in NSW is essential for both consumers and suppliers. A major failure involves significant defects or issues that would deter a reasonable consumer from purchasing the vehicle, render it unsafe, or make it unfit for its intended purpose.


Consumers have significant rights under the ACL, including the right to a refund, replacement, or compensation. By being informed and proactive, consumers can ensure they receive the protections afforded to them under the ACL.

For further information or assistance, consumers can contact Arida Lawyers to navigate their rights and remedies under the ACL.

This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.

Liability limited by a scheme approved under Professional Standards Legislation.

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