Skip to main content

Disclaimer: Educational purposes only. Not legal advice. Consult a qualified NZ legal practitioner for your specific circumstances.

SimplifiedLaw.co.nz
consumer

Does the CGA apply to private car sales on TradeMe?

Key Takeaway

The Consumer Guarantees Act (CGA) and Fair Trading Act (FTA) generally do not apply to private car sales on TradeMe unless the seller is considered to be 'in trade'. If a seller is not 'in trade', the buyer's rights are typically governed by common law principles, such as contract law.

Consumer Law and Private Car Sales on TradeMe in New Zealand

When purchasing a car through a private sale platform like TradeMe, understanding how New Zealand's consumer laws apply is crucial. The applicability of the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA) largely depends on whether the seller is considered to be acting 'in trade'.

The Consumer Guarantees Act 1993 (CGA)

Purpose and Scope

The Consumer Guarantees Act 1993 (CGA) provides consumers with a range of guarantees for goods and services ordinarily acquired for personal, domestic, or household use or consumption [Source: Consumer Guarantees Act 1993, s 4]. These guarantees include that goods must be of acceptable quality, fit for purpose, and match their description [Source: Consumer Guarantees Act 1993, s 6, s 7, s 9].

Applicability to Private Sales

The CGA applies primarily to transactions where goods or services are supplied by a supplier (a person who is 'in trade') to a consumer (a person who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption) [Source: Consumer Guarantees Act 1993, s 2, s 4]. Therefore, if a private individual sells a car and is not acting 'in trade', the CGA typically does not apply to that transaction [Source: Consumer Guarantees Act 1993, s 2].

What 'In Trade' Means for the CGA

For the purposes of the CGA, a person is considered 'in trade' if they are acting in the course of any trade, business, industry, profession, occupation, or activity of commerce, or undertaking relating to the supply or acquisition of goods or services [Source: Consumer Guarantees Act 1993, s 2]. Factors that may indicate a seller is 'in trade' include:

  • Regularly buying and selling vehicles.
  • Intending to make a profit from the sale.
  • Having a business registration (e.g., GST number).
  • Advertising the vehicle in a business-like manner.

If a private seller is found to be acting 'in trade', then the buyer is a 'consumer', and the guarantees under the CGA will apply [Source: Consumer Guarantees Act 1993, s 2, s 4].

The Fair Trading Act 1986 (FTA)

Purpose and Scope

The Fair Trading Act 1986 (FTA) aims to protect consumers from misleading and deceptive conduct, false representations, and unfair practices by those 'in trade' [Source: Fair Trading Act 1986, Long Title]. It prohibits conduct that is misleading or deceptive, or likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. It also prohibits false or misleading representations about goods or services [Source: Fair Trading Act 1986, s 13, s 14].

Applicability to Private Sales

Similar to the CGA, the main prohibitions against misleading or deceptive conduct and false representations under the FTA apply to persons acting 'in trade' [Source: Fair Trading Act 1986, s 9, s 13, s 14]. This means that if a private seller of a car on TradeMe is not acting 'in trade', the primary provisions of the FTA concerning misleading conduct and representations generally do not apply to that individual [Source: Fair Trading Act 1986, s 9].

What 'In Trade' Means for the FTA

The definition of 'trade' under the FTA is broad and includes any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services [Source: Fair Trading Act 1986, s 2]. The factors used to determine if a seller is 'in trade' for the FTA are similar to those for the CGA. If a private seller is deemed to be acting 'in trade', they are then subject to the FTA's requirements regarding truthful advertising and conduct [Source: Fair Trading Act 1986, s 9, s 13, s 14].

Implications for Private Car Sales on TradeMe

For most genuine private car sales on TradeMe, where the seller is not acting 'in trade', the CGA and the core consumer protection provisions of the FTA will not apply. In such cases, the buyer's rights and remedies would typically be governed by general contract law principles, which were not requested to be covered in this article.

However, if a seller who claims to be private is in fact acting 'in trade' (e.g., a 'backyard dealer' selling multiple cars for profit), then both the CGA and the FTA will apply, providing the buyer with the protections and guarantees outlined in those Acts [Source: Consumer Guarantees Act 1993, s 2; Fair Trading Act 1986, s 2].

When to Seek Independent Legal Advice

Individuals who are unsure whether a seller is 'in trade', or who believe they have purchased a vehicle from a seller who was acting 'in trade' and the vehicle does not meet statutory guarantees, should seek independent legal advice. Information can be obtained from official bodies like the Commerce Commission or by consulting legal professionals, including Community Law Centres (https://communitylaw.org.nz/) for free legal assistance.

Key Resources