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The guarantee that goods must be "fit for purpose"

Key Takeaway

In New Zealand, goods purchased from a supplier must be 'fit for purpose' under the Consumer Guarantees Act 1993. This means they must be suitable for their common uses or any specific purpose the consumer made known. If goods fail this guarantee, consumers may have rights to repair, replacement, or refund, depending on the nature of the failure.

Guarantee That Goods Must Be 'Fit for Purpose' in New Zealand

New Zealand consumer law provides important protections when purchasing goods, including a guarantee that goods are 'fit for purpose'. This guarantee is primarily outlined in the Consumer Guarantees Act 1993 (CGA) and is supported by the Fair Trading Act 1986 (FTA), which addresses misleading conduct.

What Does 'Fit for Purpose' Mean?

The guarantee that goods are 'fit for purpose' is a core component of the broader guarantee of 'acceptable quality' under New Zealand law. The Consumer Guarantees Act 1993 (CGA) applies to goods supplied to a 'consumer' by a 'supplier' in trade [Source: Consumer Guarantees Act 1993, s 2, s 4].

  • A 'consumer' is a person who acquires goods or services primarily for personal, domestic, or household use or consumption, and not for resupply in trade, or for use in the course of a manufacturing process, or in repairing or treating other goods or fixtures on land [Source: Consumer Guarantees Act 1993, s 2].
  • A 'supplier' is a person who in trade supplies goods or services to a consumer [Source: Consumer Guarantees Act 1993, s 2].

Goods are considered to be of 'acceptable quality' if, among other things, they are:

  1. Fit for common purposes: Fit for all the purposes for which goods of the type in question are commonly supplied [Source: Consumer Guarantees Act 1993, s 7(a)(ii)]. For example, a toaster must be able to toast bread, and a washing machine must be able to wash clothes.
  2. Fit for particular purposes: Fit for any particular purpose that the consumer makes known, expressly or by implication, to the supplier or the manufacturer as a purpose for which the goods are being acquired [Source: Consumer Guarantees Act 1993, s 7(b)]. This also applies if the consumer relies on the skill or judgment of the supplier or manufacturer. For example, if a consumer tells a salesperson they need a specific type of drill bit for drilling into concrete, and the salesperson recommends a particular drill bit, that drill bit must be suitable for drilling into concrete.

When the Guarantee Applies

This guarantee applies to any goods supplied by a supplier to a consumer in trade. It does not apply if the goods are acquired for commercial purposes, or if the consumer's expectations regarding fitness for purpose are unreasonable given the nature of the goods, their price, and any statements made about them [Source: Consumer Guarantees Act 1993, s 7(a)(iii), s 7(e)]. The guarantee also does not apply if the consumer causes the failure or if they examined the goods before purchase and the unsuitability was obvious [Source: Consumer Guarantees Act 1993, s 7(d), s 7(f)].

Suppliers cannot contract out of the CGA when supplying goods to consumers [Source: Consumer Guarantees Act 1993, s 32].

Consumer Rights and Remedies Under the CGA

If goods are not fit for purpose, the consumer has rights to remedies against the supplier. The nature of the remedy depends on whether the failure is 'minor' or 'major' [Source: Consumer Guarantees Act 1993, s 18, s 20].

  • Minor Failure: A 'minor failure' is one that can be remedied. If the failure to be fit for purpose is minor, the consumer must allow the supplier to remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 18(2)]. The supplier may choose to repair the goods, replace them, or provide a refund [Source: Consumer Guarantees Act 1993, s 18(2)(a)]. If the supplier does not remedy the failure within a reasonable time, the consumer may reject the goods or have them repaired elsewhere and recover the reasonable costs from the supplier [Source: Consumer Guarantees Act 1993, s 18(2)(b), s 18(3)].
  • Major Failure: A 'major failure' is one that cannot be remedied or is of a significant nature [Source: Consumer Guarantees Act 1993, s 21]. A failure is major if, among other things, the goods are not fit for a particular purpose and cannot easily and within a reasonable time be made fit for that purpose [Source: Consumer Guarantees Act 1993, s 21(b)]. In the case of a major failure, the consumer can choose to reject the goods (return them for a full refund or replacement) or obtain compensation for any reduction in their value [Source: Consumer Guarantees Act 1993, s 20(2)]. The consumer may also claim for any reasonably foreseeable consequential loss resulting from the failure [Source: Consumer Guarantees Act 1993, s 23(2)].

Fair Trading Act 1986 and 'Fit for Purpose'

The Fair Trading Act 1986 (FTA) plays a complementary role by prohibiting misleading conduct in trade. A 'person in trade' is an individual, business, or organisation whose regular business involves buying and selling goods or services [Source: Fair Trading Act 1986, s 2].

  • Misleading or Deceptive Conduct: Section 9 of the FTA prohibits any person in trade from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9].
  • False Representations Regarding Goods: Section 10 specifically prohibits a person in trade from making false or misleading representations concerning the nature, characteristics, suitability for a purpose, or quantity of goods [Source: Fair Trading Act 1986, s 10].

If a supplier explicitly states or implies that goods are fit for a particular purpose when they are not, this could constitute misleading conduct under the FTA. Remedies under the FTA can include various orders from the courts, such as declaring contracts void, varying contracts, ordering refunds, or awarding damages to affected consumers [Source: Fair Trading Act 1986, s 43].

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and obligations regarding consumer guarantees, particularly in complex or disputed situations, may consider consulting with a legal professional. Information can also be obtained from official government agencies. Community Law Centres offer free legal advice to those who qualify based on their income and needs, and can be a valuable resource for understanding individual legal positions and available remedies.

Key Resources