Uninvited Direct Sales (Door-to-Door Sales) in New Zealand Law

In New Zealand, consumer protections for what are commonly known as door-to-door sales are primarily governed by the Fair Trading Act 1986 (FTA) and the Consumer Guarantees Act 1993 (CGA). These laws set out specific rules for traders making unsolicited approaches to consumers and provide rights regarding the quality of goods and services supplied.

Key Definitions

Before detailing the specific rules, it is helpful to understand some key legal terms:

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(1)].
Supplier (or Trader): A person who, in trade, supplies goods or services to consumers [Source: Consumer Guarantees Act 1993, s 2(1)].
Goods: Personal property of every kind, whether tangible or intangible, including electricity, water, and gas, and livestock [Source: Consumer Guarantees Act 1993, s 2(1)].
Services: Includes any rights, benefits, privileges, or facilities that are or are to be provided, granted, or conferred. This includes a contract for work and materials, or to repair property [Source: Consumer Guarantees Act 1993, s 2(1)].
Uninvited direct sale: A negotiation between a supplier and a consumer for the supply of goods or services that occurs at a place other than the supplier’s business premises, as a result of the supplier approaching the consumer uninvited [Source: Fair Trading Act 1986, s 36B(1)].
Uninvited direct sale agreement: An agreement for the supply of goods or services to a consumer that is made in trade during an uninvited direct sale, at the consumer's home or workplace, or at any other place that is not the supplier’s business premises [Source: Fair Trading Act 1986, s 36B(1)].

Rules Under the Fair Trading Act 1986

Part 4A of the Fair Trading Act 1986 specifically addresses uninvited direct sales agreements, providing protections for consumers and obligations for suppliers.

What is an Uninvited Direct Sale Agreement?

An uninvited direct sale agreement is formed when a supplier approaches a consumer uninvited at a location other than the supplier's business premises, leading to an agreement for goods or services [Source: Fair Trading Act 1986, s 36B(1)].

Certain agreements are excluded from these specific rules, including those:

Where the total price payable under the agreement is less than $100 [Source: Fair Trading Act 1986, s 36B(2)(a)].
Where the consumer invites the supplier to call and provides the supplier with their contact details or information about the premises [Source: Fair Trading Act 1986, s 36B(2)(b)].
For the supply of financial services [Source: Fair Trading Act 1986, s 36B(2)(c)].
For the supply of electricity, gas, or telecommunication services by a regulated utility [Source: Fair Trading Act 1986, s 36B(2)(d)].
Made in emergency circumstances [Source: Fair Trading Act 1986, s 36B(2)(e)].

Information Sellers Must Provide

For an uninvited direct sale agreement to be enforceable, the supplier must ensure the agreement is in writing and signed by both parties [Source: Fair Trading Act 1986, s 36C(1)]. A copy of the agreement must be given to the consumer at the time it is made [Source: Fair Trading Act 1986, s 36C(3)].

The written agreement must clearly state:

The supplier's full name, street address, telephone number, and email address [Source: Fair Trading Act 1986, s 36C(2)(a)].
A description of the goods or services, the total price, or how the price will be calculated, and any delivery charges [Source: Fair Trading Act 1986, s 36C(2)(b), (c)].
A clear statement of the consumer's right to cancel the agreement, including the steps required to cancel and a cancellation form [Source: Fair Trading Act 1986, s 36C(2)(d)].

The Right to Cancel (Cooling-off Period)

Consumers have a right to cancel an uninvited direct sale agreement without giving any reason within a specific timeframe, known as the cooling-off period [Source: Fair Trading Act 1986, s 36D(1)].

The cooling-off period is 5 working days [Source: Fair Trading Act 1986, s 36D(1)].
This period begins the day after the consumer receives a copy of the agreement [Source: Fair Trading Act 1986, s 36D(2)].
Cancellation must be communicated to the supplier in writing (e.g., by letter, email, or using the cancellation form provided by the supplier) [Source: Fair Trading Act 1986, s 36D(3)].

If a consumer cancels the agreement:

The supplier must immediately refund any money received from the consumer [Source: Fair Trading Act 1986, s 36E(1)].
The consumer must return any goods received, or make them available for collection by the supplier [Source: Fair Trading Act 1986, s 36F(1), (2)].

Prohibited Conduct

Suppliers are prohibited from certain conduct during an uninvited direct sale [Source: Fair Trading Act 1986, s 36G(1)]:

Entering premises if there is a clear sign indicating no uninvited direct sales [Source: Fair Trading Act 1986, s 36G(1)(a)].
Entering or remaining on premises if the consumer has asked them to leave [Source: Fair Trading Act 1986, s 36G(1)(b)].
Calling at premises within 28 days of having been asked to leave, unless invited by the consumer [Source: Fair Trading Act 1986, s 36G(1)(c)].
Calling at premises within 28 days of having received a notice not to call [Source: Fair Trading Act 1986, s 36G(1)(d)].

More generally, the Fair Trading Act 1986 prohibits misleading or deceptive conduct in trade [Source: Fair Trading Act 1986, s 9]. This includes making false claims about products, prices, or a consumer's rights.

Penalties for Breaching the FTA

Contraventions of Part 4A of the Fair Trading Act 1986, including failing to provide required information or engaging in prohibited conduct, can result in significant penalties. A court may order a supplier to pay a pecuniary penalty of up to $200,000 for an individual or $600,000 for a body corporate [Source: Fair Trading Act 1986, s 40(1A), s 41(1A)(c)].

Consumer Rights Under the Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) applies to goods and services supplied in trade to consumers, regardless of how they were sold [Source: Consumer Guarantees Act 1993, s 4]. This means that even if an uninvited direct sale agreement is validly made, the goods and services must still meet the guarantees outlined in the CGA.

Guarantees for Goods

Goods supplied to a consumer must meet several guarantees:

Acceptable Quality: Goods must be fit for all purposes for which goods of that type are commonly supplied, acceptable in appearance and finish, free from minor defects, safe, and durable [Source: Consumer Guarantees Act 1993, s 6].
Fitness for Particular Purpose: If a consumer makes a particular purpose known to the supplier, the goods must be reasonably fit for that purpose [Source: Consumer Guarantees Act 1993, s 7].
Match Description: Goods must correspond with any description given [Source: Consumer Guarantees Act 1993, s 8].
Match Sample or Demonstration Model: If sold by sample or demonstration, goods must correspond with the sample or model in quality [Source: Consumer Guarantees Act 1993, s 9].
Reasonable Price: If no price is specified, the consumer is not liable to pay more than a reasonable price [Source: Consumer Guarantees Act 1993, s 10].

Guarantees for Services

Services supplied to a consumer must also meet certain 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: If a consumer makes a particular purpose known to the supplier, the services and any product resulting from them must be reasonably fit for that purpose [Source: Consumer Guarantees Act 1993, s 29].
Reasonable Time for Completion: If no time for completion is specified, the services must be completed within a reasonable time [Source: Consumer Guarantees Act 1993, s 30].
Reasonable Price: If no price is specified, the consumer is not liable to pay more than a reasonable price [Source: Consumer Guarantees Act 1993, s 31].

Remedies for Breach of Guarantee

If goods or services fail to meet a guarantee under the CGA, a consumer has rights to remedies depending on whether the failure is minor or major:

Minor Failure: The supplier must remedy the failure within a reasonable time. This could involve repair, replacement, or a refund. If the supplier fails to do so, the consumer can get the failure remedied elsewhere and recover reasonable costs, or reject the goods/cancel the services [Source: Consumer Guarantees Act 1993, s 18(2), s 32A(2)].
Major Failure: If the failure cannot be remedied or is of a substantial character, the consumer can choose to reject the goods/cancel the services and receive a refund or replacement, or claim damages for the reduction in value [Source: Consumer Guarantees Act 1993, s 18(3), s 32A(3)].
Consequential Loss: Consumers may also be able to claim for any loss or damage resulting from the failure that was reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 27, s 32G].

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and obligations regarding uninvited direct sales or consumer guarantees, or who believe a breach of the Fair Trading Act or Consumer Guarantees Act may have occurred, should seek independent legal advice. For free legal assistance, individuals can contact Community Law Centres throughout New Zealand. Further information can also be obtained from the Commerce Commission for fair trading issues or Consumer Protection for general consumer rights enquiries.

Door-to-door sales (Uninvited direct sales) under the FTA