How to exercise your rights under the Consumer Guarantees Act

Introduction

The CONSUMER GUARANTEES ACT 1993 sets out a number of guarantees designed to protect consumers of goods and services.

You cannot contract out of your rights under the Act – that is, you are still protected even if the terms of the sale say that the Act will not protect you.

What kinds of transactions does the Act apply to?

The Act protects you if you buy the goods or services as a "consumer". You will come within this definition if:

• you acquire, from a supplier, goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption, and
• you do not acquire the goods or services, nor give the impression that you are acquiring them:
• to be re-supplied (on-sold) in trade, or
• to be consumed in a manufacturing process, or
• in the case of goods, for the purpose of repairing or treating in trade other goods or fixtures on land

This does not mean that goods or services sold to a business are never covered by the Act; they will be covered if they are of the type normally supplied for personal, domestic or household use.

Further, the Act applies only to goods and services bought from someone who supplies them as part of his or her trade. The Act does not cover goods or services:

• bought privately
• bought through an auction
• bought by way of competitive tender

The Act also does not cover real estate (land and buildings). It also does not cover goods or services bought before 1 April 1994.

What does the term "goods" include?

In the CONSUMER GUARANTEES ACT 1993, "goods" means:

• personal property (that is, not land) of every kind, whether tangible or intangible, other than money and "choses in action" (a chose in action is a property right that can only be enforced by going to court, rather than by taking physical possession of something; examples of choses in action are debts, insurance policies, cheques and company shares).

The definition of "goods" also specifically includes:

• goods attached to or incorporated in any land or personal property (but "goods" doesn't include a whole building, or part of a whole building, attached to land unless it's a structure that can be easily removed and isn't designed to be lived in)
• ships, aircraft and vehicles
• animals (including fish)
• minerals, trees and crops (whether they're on, under or attached to land or not)
• gas and electricity
• water
• computer software

What does the term "services" include?

In the CONSUMER GUARANTEES ACT 1993, "services" includes:

• any rights, benefits, privileges or facilities that are (or are supposed to be) provided, granted or conferred by a supplier (including rights in relation to, and interests in, personal property)

Without limiting the general definition just given, "services" also specifically includes rights, benefits, privileges or facilities that are (or are supposed to be) provided, granted or conferred by a supplier under any of the following types of contract:

• a contract for, or in relation to, the performance of work (including professional work), with or without the supply of goods
• a contract for, or in relation to, the provision in trade of facilities for accommodation, amusement, the care of persons or animals or things, entertainment, instruction, parking, or recreation:
• a contract of insurance (including life assurance and life reassurance)
• a contract between a bank and a customer
• a contract for, or in relation to, the lending of money or granting of credit, or the making of arrangements for the lending of money or granting of credit, or the buying or discounting of a credit instrument, or the acceptance of deposits:
• a contract for, or in relation to, the supply of electricity, gas, telecommunications or water, or the removal of waste water

But "services" does not include:

• any rights, benefits, privileges or facilities that are (or are supposed to be) provided, granted or conferred by a supplier by simply paying or crediting any money to the consumer without the supplier performing any other task (other than tasks that are merely incidental to the payment or credit), and
• rights or benefits in the form of the supply of goods or the performance of work under an employment contract

What guarantees apply to goods under the Act?

Any goods bought from a supplier must:

• be of "acceptable quality", which includes being fit for all purposes that they are normally used for, and being safe and durable (the test is whether a reasonable consumer who is fully aware of the state of the goods, including any hidden defects, would find the goods acceptable)
• be fit for any particular purpose that you tell the supplier you want the goods for, or that the supplier has advertised the goods as being fit for
• match the description of the goods, as well as the samples or demonstration model shown
• be a reasonable price

There is also a guarantee that the supplier is the owner of the goods. The goods must also be free from any undischarged security (for example, a finance company having title to the goods under a secured loan agreement).

What guarantees apply to services?

The Act guarantees that services must:

• be provided with reasonable care and skill
• be reasonably fit for any particular purpose (this includes any product resulting from the service)
• be completed in a reasonable time
• not cost more than a reasonable price

What can I do if goods do not comply with the Act?

• Problems that can be fixed – If the problem with the goods can be fixed, you can require the supplier to fix the problem within a reasonable time. The supplier has the option of either repairing the goods or replacing them. If the supplier refuses to fix the problem or fails to fix it within a reasonable time, you then have the option of:
• getting a cash refund
• getting a replacement, or
• fixing the goods at your own expense and claiming the cost back from the supplier
• Serious problems and problems that can’t be fixed – If the goods can’t be fixed or if the problem is substantial, you have the option of:
• getting a cash refund
• getting a replacement, or
• keeping the goods but getting some of the purchase price back as compensation for the reduced value of the goods

Note that your rights in the case of substantial problems apply even if the problem is capable of being fixed. Examples of where the problem is "substantial" are if the goods are unsafe, or are substantially unfit for their normal purpose or the particular purpose for which you bought them, or are significantly different from their description.

Although you have rights against the manufacturer (see below), it is usually easier to deal first with the supplier (the place from which you bought the product). You should keep a record of all your correspondence and phone calls with the supplier. In your complaint be clear and accurate about all the relevant details, such as when you bought the item and the defects you have now come across.

What about services that don’t comply with the Act?

• Problems that can be fixed – If the failure to provide services according to the guarantees under the Act is capable of being remedied, you can require the supplier to fix the problem within a reasonable time. If this is not done, you can:
• have the problem fixed at your own expense and recover the cost from the supplier, or
• you can cancel the contract, in which case you can claim back the money you paid under the contract
• Serious problems and problems that can’t be fixed – If the failure can’t be remedied, or is substantial, you can:
• cancel the contract, in which case you can claim back the money you paid, or
• claim damages from the supplier as compensation for the reduced value of the product of the service

Do I have any rights against the manufacturer?

Yes. If goods are not of acceptable quality, are not fit for a particular purpose or do not match the description, you have rights against the manufacturer as well as against the supplier.

The manufacturer is also bound by a guarantee that it will ensure that repair facilities and parts for the goods are available for a reasonable period.

The supplier cannot avoid its responsibilities under the Act by telling you to take action against the manufacturer: your rights against the manufacturer are additional to those you have against the supplier.

How do I enforce my rights under the Act?

If a supplier or manufacturer refuses or fails to fulfil its responsibilities under the Act, you can enforce your rights through the Disputes Tribunal (see How to take a claim to the Disputes Tribunal). You can take action through the normal courts, but the Disputes Tribunal provides a cheaper and faster option.

Cautionary notes

• The time limit for making a claim under the Act is six years after discovering the problem. You should take action promptly as a long delay may present difficulties in proving that there was a problem with the goods or services.
• It is advisable to obtain legal advice if you have a concern about a problem with goods or services. Your lawyer can advise you of your legal rights and the best way of enforcing them.