Reading time: 5 minutes

Throughout everyday life, it is common to hear the phrase ‘goods and services’. However, it can be unclear what things fall within this phrase, and what should be considered a ‘good’ or a ‘service’. This distinction can be challenging when it comes to matters such as electricity or software. This article will outline what:

  • a ‘good’ is;
  • a ‘service’ is; and
  • category software falls into.

It will also discuss:

  • why this distinction between ‘good’ and ‘service’ matters; 
  • your rights when buying a good; and
  • your right to redress against suppliers of goods. 

What is a ‘Good’?

A ‘good’ refers to personal property, regardless of whether it is tangible or intangible. This definition of goods includes: 

  • vehicles;
  • animals;
  • plants and crops, regardless of whether they are on, under or attached to land; 
  • appliances; 
  • clothing; and
  • food. 

Money is excluded from the definition of goods. 

Software as a ‘Good’

Under this definition, computer software is a good. Further, software is a piece of intangible personal property.

What is a ‘Service’?

A ‘service’ is any right, benefit or facility provided or granted by a supplier. A contract will likely govern this transaction. Types of services include:

  • the performance of work;
  • the provision of facilities for recreational activities, accommodation or entertainment; 
  • insurance; or
  • the lending of money. 

Why Does This Distinction Matter?

With something intangible, like computer software, it may seem odd to refer to it as a ‘good’. However, whether it is a good or service may seem completely arbitrary.

The reason that the distinction between a good and a service is important is that it affects the:

  • rights you are entitled to when you are supplied that good or service; and
  • remedies available to you if these rights are impinged by the supplier. 

Software is classified as a good because the rights and remedies related to goods are more relevant and applicable than services. 

Your Rights When Buying Goods

All suppliers of goods in New Zealand are subject to certain rules, known as product guarantees. Product guarantees apply to all new and second-hand goods sold within New Zealand. When you buy these goods, such as computer software, it entitles you to have these guarantees complied with. The following sections outline some of these guarantees.

Acceptable Quality

A good will be of acceptable quality if it is:

  • fit for its normal purpose. This purpose will vary depending on the type of software you are purchasing;
  • free from minor defects; 
  • safe and durable; and
  • acceptable in both finish and appearance. 

This criterion is also subject to: 

  • the nature of the product;
  • the price paid;
  • any statements made on the packaging or by the retailer; and 
  • how the items were supplied.

For example, a second-hand or very cheap good would have a different acceptable quality compared to a new or expensive product.

Fit for Purpose

The good that you purchase must be suitable for its particular or special purpose. This purpose is either what:

  • you asked the seller for; or
  • the supplier informed you the product was suitable for. 

Match the Description

When purchasing goods, this purchased product must match the description of that product. Furthermore, the product must coordinate with any sample or demonstration models it was advertised alongside.

If, for example, you were shown how the software operated on a computer in-store, the software must operate to the same effect once you have bought it. 

Service Guarantees

The guarantees for the provision of services differ from goods. These guarantees include:

  • services are to be carried out with reasonable care and skill; 
  • the service is to be fit for the particular purpose that you were informed about; 
  • (if no timeframe is specified) that the service is to be carried out within a reasonable time; and
  • you are to be charged a reasonable price.

Right to Redress 

If these guarantees are not complied with, you, as a consumer, are entitled to certain act or acts of redress. These vary slightly between goods and services. 

You are entitled to get a repair, a replacement or a refund (where necessary) if the good or service:

  • does not do what it is meant to;
  • differs from its description; 
  • does not match the model shown to you; or
  • does not fit the purpose that you were informed of.

Key Takeaways

The distinction between a good and a service may seem arbitrary. However, this difference informs your rights to quality and redress. When you purchase software, like any other good, you are entitled to both product guarantees and redress, if these guarantees are not complied with. 

If you are unclear on your rights as a consumer, contact LegalVision’s New Zealand business lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What are goods in business?

A ‘good’ in business refers to personal property, regardless of whether it is tangible or intangible.

What are services in business?

A ‘service’ in business is any right, benefit or facility that is provided or granted by a supplier.

What are goods and products? 

Product is another term that can be used to refer to a good.

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2019 Top 25 Startups - LinkedIn
  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards