The Consumer Guarantees Act 1993 (CGA) protects consumer rights by ensuring guarantees when you buy goods and services. While we often focus on how the CGA applies to goods, its application to services is equally important and can significantly affect you and service providers alike. This article will explain what consumer guarantees are, the requirements they place on service providers, and the remedies available to you when services do not meet these guarantees.
What Are Consumer Guarantees?
In New Zealand, businesses that provide services to you automatically must follow the Consumer Guarantees Act (CGA). This act ensures that the services you get meet certain standards:
- they should match their description;
- be fit for purpose; and
- be reasonably priced.
When it comes to services, the CGA covers various areas, including:
- professional services (such as legal or medical services);
- repairs;
- maintenance; and
- entertainment services (like concerts or tours).
Knowing how these guarantees affect services is crucial for both you and service providers to understand your rights and responsibilities better.
How Do Services Comply With the Guarantees?
Below are examples of how services must comply with consumer guarantees.
Carried Out With Reasonable Care and Skill
Service providers must perform their services with reasonable care and skill. In similar circumstances, a reasonable person would expect them to perform their services to a standard competently.
Fit for Purpose
The service provider should ensure that the services they offer fit the specific purpose you communicate, whether you say it directly or imply it. Before starting any work, the service provider must let you know if they can’t promise the result you want.
If you do not give clear instructions and the service provider does their job well, but the work still does not meet your expectations, you cannot hold the service provider responsible.
Charged for at a Reasonable Price
Service providers must ensure they offer you reasonable prices and provide accurate estimates, especially when you have not agreed on the cost upfront. Misleading you about the cost of services is not acceptable.
Completed Within Reasonable Timeframes
Service providers must complete services within a reasonable timeframe unless you and the service provider agree on a specific timeframe.
Continue reading this article below the formRemedies for Breach of Guarantees
If a service does not meet the guarantees set out in the CGA, consumers have several options available to them:
- right to remedy: consumers have the right to ask the service provider to remedy the issue. This could involve fixing the problem, providing compensation, or redoing the service to meet the required standard.
- right to reject: in cases where the service’s failure is substantial and cannot be remedied within a reasonable time, consumers have the right to reject the service and seek a refund.
- right to cancel: consumers may also have the right to cancel a contract for services if the provider cannot remedy a substantial failure within a reasonable time or where the nature of the failure is such that it would have prevented the consumer from entering into the contract had they known about it.
- compensation for loss or damage: you can claim compensation for any loss or damage resulting from a service provider’s breach of the CGA guarantees.
When Do Guarantees Not Apply to Services?
The CGA does not apply to:
- commercial services: services typically bought for business use or work normally carried out by a business for a business.
- private sales: when you buy from someone who is not in the trade.
- contracts of service: such as the performance of work under an employment contract.
To protect your business, ensure supplier contracts meet your business’ needs. Our free Commercial Contracts Checklist will help.
Key Takeaways
Overall, the Consumer Guarantees Act in New Zealand provides protections for consumers when it comes to services. The Consumer Guarantees Act (CGA) ensures that services are performed with care and skill and offers remedies for breaches of guarantees. It establishes a framework that promotes fairness and accountability in transactions between businesses and consumers like you. Both consumers and service providers should be aware of their rights and responsibilities under the Act to foster transparent and compliant service delivery.
If you need help with consumer guarantees for your services, our experienced regulatory and compliance 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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