Understanding Consumer Law: Inherent Faults vs. Wear and Tear
New Zealand consumer law aims to protect consumers by setting standards for goods and services. Two key pieces of legislation, the Consumer Guarantees Act 1993 and the Fair Trading Act 1986, define the rights and obligations of both consumers and suppliers regarding the quality and representation of products.
The Consumer Guarantees Act 1993 (CGA)
The Consumer Guarantees Act 1993 (CGA) is a New Zealand law that establishes minimum guarantees for goods and services supplied to consumers – individuals who acquire goods or services primarily for personal, domestic, or household use [Source: Consumer Guarantees Act 1993, s 2]. These guarantees apply automatically, regardless of any manufacturer's warranty.
Key guarantees relevant to the quality and durability of goods include:
- 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(a)-(e)]. What constitutes 'acceptable quality' can vary depending on the nature of the goods, their price, and any statements made about them [Source: Consumer Guarantees Act 1993, s 6(2)].
- Fit for a particular purpose: If a consumer makes known to the supplier (a person who supplies goods or services to a consumer) the particular purpose for which the goods are being acquired, and the consumer relies on the supplier's skill or judgment, 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 by the supplier [Source: Consumer Guarantees Act 1993, s 8].
Inherent Faults
An inherent fault refers to a defect or problem that exists in the goods at the time of supply, often due to manufacturing errors, design flaws, or poor materials. These faults lead to the goods failing to meet one or more of the consumer guarantees, particularly the guarantee of acceptable quality. For example, a new appliance that stops working shortly after purchase due to a component failure would likely have an inherent fault.
When an inherent fault causes a product to fail, the CGA provides consumers with remedies. The nature of the remedy depends on whether the failure is minor or major:
- Minor failure: If the failure can be remedied easily, the supplier can choose to repair the goods, replace them, or provide a refund [Source: Consumer Guarantees Act 1993, s 18(2)].
- Major failure: A major failure is a problem of substantial character – meaning the goods are significantly unfit for purpose, unsafe, or would not have been bought by a reasonable consumer knowing the nature and extent of the failure [Source: Consumer Guarantees Act 1993, s 21]. In cases of major failure, the consumer can choose to reject the goods and demand a refund or a replacement of identical type, or seek compensation for any reduction in value [Source: Consumer Guarantees Act 1993, s 23(2)].
Wear and Tear
Wear and tear refers to the normal deterioration of goods that occurs through ordinary and reasonable use over time. It is expected that products will eventually wear out, and the CGA does not provide remedies for failures that are solely due to normal wear and tear. For instance, the worn treads on car tyres after several years of driving, or the fading of fabric on furniture that has been regularly used, would typically be considered wear and tear.
The CGA also does not cover damage caused by the consumer's misuse of the product [Source: Consumer Guarantees Act 1993, s 6(2)(c)]. The distinction between an inherent fault and wear and tear often hinges on the product's expected durability, its price, and how it has been used. A product failing prematurely may indicate an inherent fault rather than expected wear and tear.
The Fair Trading Act 1986 (FTA)
The Fair Trading Act 1986 (FTA) primarily prohibits misleading and deceptive conduct by businesses. It aims to ensure that consumers receive accurate information about products and services [Source: Fair Trading Act 1986, s 9].
How it relates to faults and wear and tear:
- Misleading representations: Businesses must not make false or misleading representations about the quality, standard, grade, or characteristics of goods, including their durability or whether they are new or used [Source: Fair Trading Act 1986, s 13]. If a product is advertised as 'new' but has pre-existing defects, or if false claims are made about its longevity, this could breach the FTA.
- Information disclosure: While the FTA does not guarantee quality like the CGA, it requires businesses to provide truthful information. Failing to disclose known defects or pre-existing conditions in second-hand goods could be considered misleading conduct under the FTA.
Obligations of Suppliers and Rights of Consumers
Suppliers have an obligation to ensure that the goods they supply meet the guarantees set out in the CGA. If goods fail to meet these guarantees due to an inherent fault, the supplier must provide an appropriate remedy. They cannot simply point to a manufacturer's warranty or a 'no refunds' sign to avoid these responsibilities.
Consumers have the right to expect that goods are of acceptable quality and fit for purpose. When a product fails due to an inherent fault, consumers have the right to seek remedies from the supplier as outlined in the CGA. It is generally the consumer's responsibility to prove that the goods failed due to an inherent fault and not due to misuse or normal wear and tear.
When to Seek Independent Legal Advice
If a consumer has a complex dispute with a supplier regarding whether a product's failure is due to an inherent fault or wear and tear, or if they are unsure about their rights and obligations under the Consumer Guarantees Act 1993 or the Fair Trading Act 1986, it is advisable to seek independent legal advice. Information can be obtained from official government consumer protection bodies, legal professionals, or Community Law Centres which provide free legal advice.