Who is Responsible: Retailer or Manufacturer under NZ Consumer Law?
New Zealand consumer law, primarily through the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA), establishes protections for consumers when acquiring goods and services. These Acts clarify who bears responsibility when things go wrong.
The Consumer Guarantees Act 1993
The Consumer Guarantees Act 1993 provides a set of guarantees that goods and services must meet. A 'consumer' is a person who acquires goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption, and not for resupply in trade, or for consumption in the course of a manufacturing or production process [Source: Consumer Guarantees Act 1993, s 2]. A 'supplier' is a person who is 'in trade' and supplies goods or services to a consumer [Source: Consumer Guarantees Act 1993, s 2]. 'In trade' refers to any trade, business, industry, profession, occupation, or activity relating to the supply or acquisition of goods or services [Source: Fair Trading Act 1986, s 2].
Retailer (Supplier) Responsibility under the CGA
Generally, the 'supplier' – often the retailer – is primarily responsible for ensuring that goods comply with the consumer guarantees [Source: Consumer Guarantees Act 1993, s 18]. These guarantees 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].
- Fitness for particular purpose: Goods must be fit for any particular purpose that the consumer makes known to the supplier before purchase [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: Goods must correspond with any sample or demonstration model shown to the consumer [Source: Consumer Guarantees Act 1993, s 9].
- Reasonable price: If no price is agreed, the consumer is not liable to pay more than a reasonable price [Source: Consumer Guarantees Act 1993, s 10].
- Availability of spare parts and repair facilities: Manufacturers must take reasonable action to ensure repair facilities and spare parts are reasonably available for a reasonable period after purchase, unless the consumer is advised otherwise [Source: Consumer Guarantees Act 1993, s 12]. This specific guarantee falls on the manufacturer.
- Honouring express guarantees: Both suppliers and manufacturers must honour any express guarantee given [Source: Consumer Guarantees Act 1993, s 11, s 27]. An 'express guarantee' is any undertaking, assertion, or representation relating to the goods [Source: Consumer Guarantees Act 1993, s 2].
When goods fail to comply with a guarantee, the consumer generally has a right of redress against the supplier [Source: Consumer Guarantees Act 1993, s 18]. The remedies available depend on whether the failure is 'minor' or 'of a substantial character' [Source: Consumer Guarantees Act 1993, s 18, s 21, s 23]. A failure is 'of a substantial character' if, among other things, the goods would not have been acquired by a reasonable consumer fully aware of the extent of the failure [Source: Consumer Guarantees Act 1993, s 21].
Manufacturer Responsibility under the CGA
While the supplier is usually the first point of contact, a 'manufacturer' also has specific responsibilities under the CGA. A 'manufacturer' includes a producer, importer, or person who holds themselves out to be the manufacturer [Source: Consumer Guarantees Act 1993, s 2].
A consumer has rights of redress against the manufacturer in the following situations:
- Breach of express guarantee: If the goods fail to comply with an express guarantee given by the manufacturer [Source: Consumer Guarantees Act 1993, s 27(a)].
- Availability of spare parts and repair facilities: Manufacturers must take reasonable steps to ensure that facilities for the repair of the goods and parts for the goods are reasonably available for a reasonable period after the goods are supplied [Source: Consumer Guarantees Act 1993, s 27(b), s 12].
- Cost of repair or reduction in value: If goods are not of acceptable quality or do not match a description given, and the supplier has a right of redress against the manufacturer, the consumer may recover damages from the manufacturer for any loss or damage resulting from the failure to comply with the guarantee [Source: Consumer Guarantees Act 1993, s 27(c)]. This does not apply if the manufacturer could not reasonably foresee the failure or if the failure occurred after the goods left the manufacturer's control [Source: Consumer Guarantees Act 1993, s 27(3)].
Suppliers who provide remedies to consumers for a breach of a consumer guarantee may in turn have a right of redress against the manufacturer for any loss suffered [Source: Consumer Guarantees Act 1993, s 25].
The Fair Trading Act 1986
The Fair Trading Act 1986 (FTA) prohibits misleading and deceptive conduct and unfair trading practices by anyone 'in trade'. This applies to both retailers and manufacturers.
Prohibited Conduct under the FTA
The FTA prohibits:
- Misleading and deceptive conduct generally: 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].
- False or misleading representations: Prohibits making false or misleading representations about goods or services, such as their standard, quality, or history [Source: Fair Trading Act 1986, s 13].
Who is Responsible under the FTA
Any person 'in trade' who engages in prohibited conduct can be held responsible under the FTA. This means that if a manufacturer makes misleading claims in their advertising or packaging, they can be held directly responsible by the Commerce Commission or by a consumer seeking damages [Source: Fair Trading Act 1986, s 40, s 43]. Similarly, if a retailer makes false claims about a product, they too can be held responsible [Source: Fair Trading Act 1986, s 40, s 43].
Remedies under the FTA
Consumers who suffer loss or damage due to misleading or deceptive conduct may apply to the courts for various remedies, including damages, orders to vary or cancel contracts, or to refund money [Source: Fair Trading Act 1986, s 43]. The Commerce Commission can also take enforcement action, including issuing infringement notices, seeking pecuniary penalties, or prosecuting for criminal offences [Source: Fair Trading Act 1986, s 40, s 40A, s 40B, s 40C, s 40D, s 40E].
Overlap and Interaction
While the CGA deals with the quality and performance of goods after they are supplied, the FTA addresses the accuracy of representations made before and during the supply. It is possible for conduct to breach both Acts. For instance, if a manufacturer's advertising makes a misleading claim about a product's quality, that could be a breach of the FTA. If the product then fails to meet that implied or express standard of quality, it could also be a breach of the CGA.
When to Seek Independent Legal Advice
Understanding the specific responsibilities of retailers and manufacturers under the Consumer Guarantees Act 1993 and the Fair Trading Act 1986 can be complex. For personalised guidance on your specific situation and to understand your options, it is recommended that individuals contact official bodies such as the Commerce Commission or seek independent legal advice. Free legal assistance may be available through Community Law Centres.
Key Resources
- Consumer Protection Website: https://www.consumerprotection.govt.nz/
- Commerce Commission: https://comcom.govt.nz/
- New Zealand Legislation (Consumer Guarantees Act 1993): https://www.legislation.govt.nz/act/public/1993/0091/latest/whole.html
- New Zealand Legislation (Fair Trading Act 1986): https://www.legislation.govt.nz/act/public/1986/0121/latest/whole.html