Who Does the Consumer Guarantees Act Apply To?

The Consumer Guarantees Act protects consumers in New Zealand. It is designed to help consumers seek reprieve and keep retailers accountable. This article will unpack the Consumer Guarantees Act and who they apply to in New Zealand.

Key Sections of the Consumer Guarantees Act

Product Guarantees

One of the main benefits of the Consumer Guarantees Act is that it guarantees that products have to meet a specific standard. Thus, purchasers can rely on the requirement that products must be:

• acceptable quality;
• fit for a particular purpose;
• match description or sample;
• reasonable price;
• right to sell products;
• products arrive on time and in good condition;
• spare parts and repair facilities available; and
• manufacturers guarantee/warning.

Both new and second-hand items must meet all these standards.

Service Guarantees

There are also certain service guarantees that suppliers must meet when they are providing services to customers. Services include rights and benefits even if suppliers do not charge for these. Certain contracts for services are also included in the definition under the Consumer Guarantees Act. These are:

• contracts for the performance of work;
• contracts of insurance;
• banking contracts;
• care or service of others or animals; and
• supply of electricity, telecommunications, gas, water, and wastewater removal.

The Consumer Guarantees Act outlines a supplier’s standards when supplying services. These are that the services must be:

• carried out with reasonable skill and care;
• fit for a particular purpose you told the seller about;
• carried out within a reasonable time, if no timeframe is agreed; and
• charged for at least a reasonable price when the price is not set.

Rights of Businesses

Under the Consumer Guarantees Act, businesses have certain rights. These rights include businesses being able to opt out of the Act if they can prove that the products or services they sell are being purely used for a business or commercial purpose. They can also choose how they price their products and refuse to sell a good or service to a customer.

Businesses can also refuse to refund a product if a consumer changes their mind or damages a product after it has been sold. However, businesses are not knowingly able to sell faulty products or provide sub-standard services. Suppose a customer complains about a particular product. In that case, the business must not delay in responding to the customer. Furthermore, the business must also deal with products damaged during delivery. Nevertheless, they can seek compensation from the delivery or courier company.

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Right of Redress 

Consumers have a right to redress under the Act. This means they can get some sort of result if they can prove their complaint is legitimate.

Accordingly, as the business owner, you must give the affected customer a remedy through either a:

• repair;
• replacement; or
• refund.

Who Does the Consumer Guarantees Act Apply To?

The Consumer Guarantees Act is designed to protect consumers. Therefore it applies to all those who sell goods for personal or household use. Accordingly, it can apply to businesses selling: 

• businesses selling new products;
• businesses selling secondhand products; 
• temporary or pop-up shops;
• auctions; and 
• TradeMe sellers. 

However, you will not be subject to the Consumer Guarantees Act if you hold a one-off sale.

Key Takeaways

The Consumer Guarantees Act protects New Zealand consumers. It is designed to hold businesses to certain standards so they cannot sell or provide substandard products and services. The Act applies to all businesses and individuals who sell goods for personal or household use. However, it does not apply to those who have one-off sales. 

If you need help understanding how the Consumer Guarantees Act impacts your business operations, our experienced consumer lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

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