Project Description

The purpose of the Consumer Guarantees Act 1993 (the “Act”), is to protect the interests of consumers while balancing the rights of businesses and consumers.

The Act provides consumers with certain guarantees when buying goods and services from a supplier together with the right to claim some form of compensation from suppliers and manufacturers if the goods and services fail to comply with guarantees within the Act. This article outlines the key areas of the Act with specific reference to suppliers and consumers.

The Act outlines certain guarantees that suppliers must provide to consumers when exchanging domestic goods (second-hand or new) and services. These guarantees include that (but are not limited to):

  • Where goods are to be delivered to a consumer by the supplier, the supplier guarantees that the goods will be received by the consumer within a reasonable time or at the time agreed between the parties. 
  • The goods are of an acceptable quality. 
    • “Acceptable quality” provides that the goods:
      • Are safe and durable.
      • Are fit for all purposes for which they are commonly used.
      • Match their advertised description.
      • Are reasonably priced.
      • Are free from minor defects.
      • Are acceptable in appearance and finish.
  • With regards to services, suppliers guarantee that the services provided are:
    • Completed within a reasonable time.
    • Reasonably priced (if the price is not already agreed).
    • Carried out with reasonable skill and care.
    • Fit for the particular purpose.

The Act allows consumers to seek repairs, refunds, or replacements where the above guarantees are not followed by a supplier. However, the supplier or business has the right to decide which of the above remedies it will provide a consumer, which will largely depend on the circumstances of the claim.

It is important to note that the Act does not apply to goods normally bought for commercial business use, i.e. to trade, re-supply or use in the ordinary course of business. The Act covers goods and services generally used for domestic and personal purposes. Where businesses are purchasing domestic goods for use at the business premises, such as desks or telephones for example, they can agree that the Act does not apply. However, to contract out of the Act for this purpose, the businesses must record this in writing. Businesses that sell consumer goods and services cannot contract out of the Act unless the above exemption applies.

The Act also does not apply to private transactions, so where you are involved in a private deal, it is important that thorough due diligence investigations are conducted before engaging the services or purchasing goods from a private seller.

The following government website https://www.consumerprotection.govt.nz/general-help/consumer-laws/consumer-guarantees-act/ is a great tool to gain further information about your rights and obligations under the Act as either a consumer, supplier, or manufacturer. If you do own a business, it may be worthwhile to review the terms and conditions of trade with your lawyer. If you have any other concerns or queries about how the Act applies to you, we suggest getting in touch with your lawyer for further guidance.