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The guarantee that goods match their description or sample

Key Takeaway

In New Zealand, consumers have a legal guarantee that goods purchased will match the description provided or the sample/demonstration model shown. The Consumer Guarantees Act 1993 outlines rights for remedies if goods do not correspond. The Fair Trading Act 1986 prohibits misleading representations about goods, ensuring accuracy in trade practices.

Goods Must Match Description or Sample: Your Consumer Rights in New Zealand

New Zealand consumer law provides important protections to ensure that goods purchased by consumers correspond with their descriptions or samples. This protection is primarily established under the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA).

The Consumer Guarantees Act 1993 (CGA)

The CGA sets out guarantees that apply to goods and services supplied to consumers. A "consumer" is generally a person 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, s 3]. A "supplier" is a person who supplies goods to a consumer [Source: Consumer Guarantees Act 1993, s 2]. "Goods" are personal property of every kind, including goods attached to or incorporated in any real or personal property [Source: Consumer Guarantees Act 1993, s 2].

Guarantee as to Description

When goods are supplied by description, there is a guarantee that the goods will correspond with that description [Source: Consumer Guarantees Act 1993, s 9]. This applies even if the goods are also selected by the consumer from a sample or demonstration model [Source: Consumer Guarantees Act 1993, s 9].

Guarantee as to Sample or Demonstration Model

If goods are supplied by reference to a "sample" (a small part of the goods used to show the quality or type of the whole) or a "demonstration model" (a model used to show how a product works or what it looks like), three conditions must be met:

  1. The goods must correspond with the sample or demonstration model in quality, state, or condition [Source: Consumer Guarantees Act 1993, s 10(a)].
  2. The consumer must have a reasonable opportunity to compare the goods with the sample or demonstration model [Source: Consumer Guarantees Act 1993, s 10(b)].
  3. The goods must be free from any defect that was not apparent on a reasonable examination of the sample or demonstration model [Source: Consumer Guarantees Act 1993, s 10(c)].

Remedies for Breaches of CGA Guarantees

If goods fail to comply with these guarantees, the consumer may be entitled to remedies. The type of remedy depends on whether the failure can be remedied and its significance [Source: Consumer Guarantees Act 1993, s 18].

If the failure can be remedied:

  • The consumer may require the supplier to remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 18(2)(a)].
  • If the supplier fails to do so, the consumer may have the failure remedied elsewhere and recover all reasonable costs from the supplier, or reject the goods [Source: Consumer Guarantees Act 1993, s 18(2)(b)].

If the failure cannot be remedied or is of a substantial character:

  • A failure is of "substantial character" if a reasonable consumer would not have acquired the goods if they had known about the failure, or if the goods are substantially unfit for a common purpose or a specific purpose made known to the supplier, or if they are unsafe [Source: Consumer Guarantees Act 1993, s 21].
  • The consumer may reject the goods or obtain compensation from the supplier for any reduction in the value of the goods below the price paid or payable [Source: Consumer Guarantees Act 1993, s 18(3)].

Rejection of Goods:

Rejecting goods means notifying the supplier of the decision to reject and the reason for rejection [Source: Consumer Guarantees Act 1993, s 20(1)]. The consumer must return the rejected goods to the supplier, or, if they cannot be returned without significant cost, notify the supplier to collect them [Source: Consumer Guarantees Act 1993, s 20(3)]. Upon rejection, the consumer can choose a refund of money paid or identical replacement goods [Source: Consumer Guarantees Act 1993, s 23(2)].

Consequential Loss:

The consumer may also obtain damages from the supplier for any loss or damage resulting from the failure, provided that such loss or damage was foreseeable [Source: Consumer Guarantees Act 1993, s 18(4)].

The Fair Trading Act 1986 (FTA)

The FTA aims to protect consumers from misleading and deceptive conduct and unfair trading practices in "trade" (any business, industry, profession, or activity relating to the supply or acquisition of goods or services) [Source: Fair Trading Act 1986, s 2].

Misleading or Deceptive Conduct

Section 9 of the FTA broadly states that no person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. This applies to general representations about goods, including their description.

False or Misleading Representations About Goods

More specifically, Section 13 of the FTA prohibits false or misleading representations about goods. This includes representations regarding their:

  • Nature, characteristics, suitability for a purpose, or quantity [Source: Fair Trading Act 1986, s 13(a)].
  • Standard, quality, grade, composition, style, or model [Source: Fair Trading Act 1986, s 13(b)].
  • History or previous use [Source: Fair Trading Act 1986, s 13(d)].
  • Approval, endorsement, or affiliation [Source: Fair Trading Act 1986, s 13(g)].

A representation does not need to be intentionally false; if it is misleading in a material respect, a breach may occur [Source: Fair Trading Act 1986, s 13].

Penalties and Remedies Under the FTA

Breaches of certain provisions of the FTA, including sections 9 and 13, can result in significant pecuniary penalties (financial penalties or fines) imposed by the courts [Source: Fair Trading Act 1986, s 40]. The Commerce Commission, the independent Crown entity that enforces the FTA, can also seek injunctions (court orders requiring someone to do or stop doing something) to prevent prohibited conduct [Source: Fair Trading Act 1986, s 41]. Individuals who suffer loss or damage due to conduct contravening the FTA may apply to the court for orders, including damages [Source: Fair Trading Act 1986, s 43].

Interplay Between CGA and FTA

The CGA provides specific guarantees regarding the quality and fitness of goods and services, and grants consumers rights against suppliers. The FTA, on the other hand, deals with broader issues of fair trading, preventing misleading conduct by businesses. While the CGA provides direct remedies for consumers against suppliers for goods that don't match description or sample, the FTA can be used to address broader issues of false advertising or misleading sales practices related to how those goods were described or presented in trade.

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and options regarding consumer guarantees or fair trading practices are advised to consult with a legal professional or an official consumer advisory service. This information is for general guidance only and does not constitute legal advice. Organisations such as Community Law Centres offer free legal advice and assistance across New Zealand.

Key Resources