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Consumer Guarantees Act NZ: Your Rights When Buying Goods or Services

Key Takeaway

The Consumer Guarantees Act 1993 (CGA) protects NZ consumers by requiring goods and services to meet certain standards, such as acceptable quality and fitness for purpose. If these guarantees are breached, consumers have rights to remedies like repair, replacement, or refund, depending on the failure's severity. The Act does not apply to all transactions, like commercial sales where parties contract out.

The Consumer Guarantees Act 1993 (CGA) is a New Zealand law that provides guarantees for goods and services purchased by consumers. It sets out the minimum standards that goods and services must meet and specifies the remedies available to consumers when these standards are not met.

Scope of the Consumer Guarantees Act 1993

The CGA applies when a consumer acquires goods or services from a supplier in trade [Source: Consumer Guarantees Act 1993, s 4].

  • A consumer is an individual or entity who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption, and not for the purpose of resupplying them in trade, consuming them in the course of a manufacturing or production process, or repairing or treating other goods or fixtures on land [Source: Consumer Guarantees Act 1993, s 2(1)].
  • A supplier is a person who is in the business of supplying goods or services [Source: Consumer Guarantees Act 1993, s 2(1)].

Guarantees for Goods

The CGA establishes several guarantees that apply to goods supplied to a consumer by a supplier in trade.

Guarantee as to Acceptable Quality

Goods must be of acceptable quality [Source: Consumer Guarantees Act 1993, s 6]. This means the goods must be:

  • Fit for all the purposes for which goods of that type are commonly supplied [Source: Consumer Guarantees Act 1993, s 7(a)].
  • Acceptable in appearance and finish [Source: Consumer Guarantees Act 1993, s 7(b)].
  • Free from minor defects [Source: Consumer Guarantees Act 1993, s 7(c)].
  • Safe [Source: Consumer Guarantees Act 1993, s 7(d)].
  • Durable [Source: Consumer Guarantees Act 1993, s 7(e)].

The acceptable quality of goods is assessed by considering the nature of the goods, their price, any statements made about them, and all other relevant circumstances [Source: Consumer Guarantees Act 1993, s 7].

Guarantee as to Fitness for Particular Purpose

Goods must be reasonably fit for any particular purpose that the consumer, expressly or by implication, makes known to the supplier or to the manufacturer. This applies unless the circumstances show that the consumer did not rely on the skill or judgment of the supplier or manufacturer, or that it was unreasonable for the consumer to do so [Source: Consumer Guarantees Act 1993, s 8].

Guarantees for Services

When a consumer acquires services from a supplier, the CGA also provides guarantees:

  • Reasonable care and skill: Services must be carried out with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28].
  • Fitness for particular purpose: Services must be reasonably fit for any particular purpose that the consumer makes known to the supplier [Source: Consumer Guarantees Act 1993, s 29].
  • Time of completion: Services must be completed within a reasonable time if no specific time is agreed [Source: Consumer Guarantees Act 1993, s 30].
  • Reasonable price: The consumer is not liable to pay more than a reasonable price for the services if the price is not fixed by the contract [Source: Consumer Guarantees Act 1993, s 31].

Remedy Options

When a guarantee under the CGA is breached, the type of remedy available to the consumer depends on whether the failure is minor or major.

Remedies for Goods

  • Minor Failure: If the failure can be remedied and is not of a substantial character (a major failure), the consumer may require the supplier to remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 18(2)]. If the supplier fails to do so, the consumer may:
    • Have the failure remedied elsewhere and recover the reasonable costs from the supplier [Source: Consumer Guarantees Act 1993, s 18(3)(a)].
    • Reject the goods [Source: Consumer Guarantees Act 1993, s 18(3)(b)].
  • Major Failure: If the failure cannot be remedied or is of a substantial character (a major failure), the consumer may:
    • Reject the goods [Source: Consumer Guarantees Act 1993, s 18(3)(b)].
    • Obtain from the supplier compensation for any reduction in value of the goods below the price paid or payable by the consumer [Source: Consumer Guarantees Act 1993, s 18(3)(b)].

A major failure occurs if:

  • The goods would not have been acquired by a reasonable consumer fully aware of the extent of the failure [Source: Consumer Guarantees Act 1993, s 21(a)].
  • The goods depart in a significant respect from the description, sample, or demonstration model [Source: Consumer Guarantees Act 1993, s 21(b)].
  • The goods are substantially unfit for a purpose for which goods of the type are commonly supplied or for a particular purpose made known to the supplier, and they cannot easily be remedied to make them fit [Source: Consumer Guarantees Act 1993, s 21(c), s 21(d)].
  • The goods are unsafe [Source: Consumer Guarantees Act 1993, s 21(e)].

When goods are rejected, the consumer has the option to choose either a refund or a replacement of the same type and value [Source: Consumer Guarantees Act 1993, s 23]. The consumer may also claim damages for any loss or damage resulting from the failure that was reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 18(4)].

Remedies for Services

  • Minor Failure: If a failure in a service can be remedied and is not of a substantial character, the consumer may require the supplier to remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 32(1)]. If the supplier fails to do so, the consumer may:
    • Have the failure remedied elsewhere and recover the reasonable costs from the supplier [Source: Consumer Guarantees Act 1993, s 32(2)(a)].
    • Cancel the contract for the supply of the service [Source: Consumer Guarantees Act 1993, s 32(2)(b)].
  • Major Failure: If a failure in a service cannot be remedied or is of a substantial character, the consumer may:
    • Cancel the contract for the supply of the service [Source: Consumer Guarantees Act 1993, s 32(3)(a)].
    • Obtain from the supplier compensation for any reduction in value of the service below the price paid or payable by the consumer [Source: Consumer Guarantees Act 1993, s 32(3)(b)].

The consumer may also claim damages for any loss or damage resulting from the failure that was reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 32(4)].

When the Act Does Not Apply

The CGA does not apply in certain circumstances:

  • Commercial Transactions: If goods or services are supplied to a person in trade and are supplied for the purposes of a business, the parties may agree in writing that the CGA does not apply [Source: Consumer Guarantees Act 1993, s 43(1), s 43(2)].
  • Resale or Manufacturing/Repair: The Act generally does not cover goods acquired for resupply in trade or for use in a manufacturing or repair process [Source: Consumer Guarantees Act 1993, s 2(1) - definition of "consumer"].
  • Private Sales: The CGA applies to transactions between a consumer and a supplier in trade. It does not apply to private sales between individuals where neither person is acting in the course of a business [Source: Consumer Guarantees Act 1993, s 2(1) - definition of "supplier"].
  • Sales by Auction: Goods sold by auction are excluded from certain guarantees under the CGA [Source: Consumer Guarantees Act 1993, s 42].
  • Real Property: The CGA primarily applies to goods (personal property) and services. It does not generally cover the sale of real property, such as land or buildings, as they are not defined as "goods" under the Act [Source: Consumer Guarantees Act 1993, s 2(1) - definition of "goods"].

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and obligations under the Consumer Guarantees Act 1993, or needing assistance with consumer disputes, are encouraged to seek independent legal advice. Information regarding consumer protection can also be obtained from official government bodies. Community Law Centres offer free legal assistance across New Zealand and can be found at https://communitylaw.org.nz/.

Key Resources