When a business (in trade) supplies you with consumer products and you find they don't work, break too easily or don't do what you expected them to do, you may be covered by consumer guarantees for products under the Consumer Guarantees Act (CGA).

The guarantees

Both new and second-hand consumer products must meet the guarantees of:

This means that products must be:

  • fit for their normal purposes
  • acceptable in finish and appearance
  • free from minor defects
  • safe
  • durable.

This is based on whether a reasonable consumer would find the products acceptable taking into account:

  • the nature or type of products, eg second-hand products are more likely to show signs of use and may be less durable than new products
  • the price paid -products that are expensive to be of better quality than products that are very cheap
  • any information on the products, in advertising or in the packaging
  • any statement the retailer or supplier made about the products including their history, quality or condition
  • the nature of the trader and how the products were supplied, ie more risky with online auctions
  • all other relevant circumstances, eg how soon they developed a problem after purchase.

If the retailer or manufacturer arranges the products to be delivered to you, the products must be of acceptable quality when you receive them.

Products must be fit for a particular purpose or special purpose that you tell to a trader or they tell you the products are suitable for and you are relying on the trader’s knowledge.

Claims that retailers or manufacturers make about what products can do may also be covered by this guarantee.

Many products are sold with a description. The products you receive must be the same as the description in a catalogue or online description/photo, or made by the manufacturer on packaging and labels. The products that you buy must be the same as any sample or demonstration model shown by the trader.

This guarantee only applies when there has been no agreement about the price and the products have not yet been paid for. Usually the price is agreed in advance -a price tag or on a sign displayed with the products. But if not, you only have to pay a reasonable price (i.e. what other traders charge for the same or similar products).

If you think the price is unreasonable and you pay it without disputing the price the law says you have agreed to the price and can’t dispute it (affirmation). So if you dispute the price make this clear before you pay and state that you intend to take future action.

The retailer or trader should be able to pass all the ownership rights or title in the products to you.

This means they guarantee:

  • they have the right to sell the products
  • no other person has a claim or right over those products,
  • you have the right to undisturbed possession of the products ,eg the products can’t be repossessed by a finance company if they have a registered security interest on those products.

Unless:

  • You buy consumer products on credit. The finance company may repossess products under certain conditions , eg payments not being made and you have been told that repossession is a possibility and given a copy of this in writing.
  • If you didn’t pay the full price for the products at the time you bought them and before you bought the products:
    • you were told about the possibility of the products being taken off you if you do not pay the balance within a certain time; and
    • you were given a copy, or the relevant part of a document telling you about this (Romalpa clause).

Traders can still sell second-hand products with a registered security interest, but they must disclose this to you, before you buy.

Read Loans and credit to find out more.

On delivery, the products must be of acceptable quality when you receive them. If products arrived damaged you can claim a remedy from the trader.

The delivery must also:

  • arrive on time
  • within the agreed period
  • within a reasonable time if no delivery time is agreed.

If products are late, or don’t arrive on time, you can reject them if the failure to deliver was substantial.

Manufacturers and importers can meet this guarantee by:

  • supplying parts and services themselves
  • making sure that parts and services are available through other traders.

Manufacturers or importers can legally opt out of this guarantee by giving you notice that spare parts and repairs will not be available or will be limited.

This guarantee only applies to the first person to buy products in New Zealand. This means that
the guarantee only applies to new products and to the first purchaser of imported second¬hand
products.

The Consumer Guarantees Act gives you the right to seek a remedy from the manufacturer whether or not the products come with a manufacturer’s warranty (referred to in the Act as an “express guarantee”). Manufacturers do not have to provide a written warranty with their products. However, if they choose to do so, the Act says they must meet their obligations under that warranty.

Read Warranties to find out more.


Products covered by the CGA

The CGA applies to consumer new or second-hand goods or products supplied by businesses that are:

  • received as a gift
  • bought on credit
  • bought at auction, online, door to door or other types of sales
  • hired or leased.

Goods are defined in the CGA to include personal property of every kind including intangible property, other than money or choses in action (the right to sue). This includes software, animals, plants and minerals.

It is the ordinary or common use that people would use that item or service for which determines whether the CGA applies or not.

The ordinary use may change over time, eg computers are now commonly used for personal use.  

Products not covered by the CGA

Include:

  • Commercial products  – products that are normally bought for business use (e.g. farm machinery) or work normally carried out for a business. This includes products used for resupply in trade, use in production or manufacture, or repair of other products in trade.
  • Businesses can also contract out of the CGA where personal or household products are bought for a business purpose, eg a vacuum cleaner for use in a shop.
  • Private sales – when you buy from someone who is not in trade, eg private sellers online and garage sales
  • Products bought by auction or competitive tender (including those bid for online) before 17 June 2014. 
  • Work done or products donated by a charity for your benefit.

Faulty products

Go to the retailer first

If you’ve a faulty product, your first point of call should be with the retailer. Every situation and product is different, but your options should include whether the product:

  • can be fixed and the fault is not serious or the retailer fails or refuses to act
  • is serious or cannot be fixed
  • has caused damage or extra loss (consequential loss).

> Read more about faulty products