As a seller in New Zealand, you must understand their obligations under the Consumer Guarantees Act 1993 (CGA). This key legislation sets out various guarantees that goods must comply with when sold to a consumer. It is designed to help consumers seek recourse when they receive faulty goods and keep retailers accountable. But do the same rules apply when a business sells used or second-hand items?
The short answer is yes. The CGA guarantees generally extend to second-hand goods sold by businesses to consumers. There are a few important exceptions and additional considerations, but overall, businesses selling used or second-hand products have similar responsibilities as those selling brand-new items. This article outlines the requirements and exceptions for second-hand goods.
Download our free guide to understand your legal obligations for health and safety in the workplace.
What are the CGA Guarantees?
The CGA outlines several key guarantees that goods must meet, regardless of whether they are new or used. These include that goods must:
- be of acceptable quality, taking into account things like age, price and condition;
- be fit for their particular purpose;
- be a reasonable price; and
- match any description or sample model shown.
Consumers are entitled to expect reasonable quality for the goods, considering the product’s age and price. An older, second-hand item won’t be held to the same standard as a brand-new item, but it should still work properly with no undisclosed defects or issues.
Exceptions for Private Sales
Importantly, the CGA guarantees generally only apply when goods are sold in a consumer transaction—that is, when sold by businesses to individual consumers. Private sales between two consumers are excluded from the Act.
If you are a private individual selling used goods in your capacity as an individual, such as through an online marketplace like Facebook or TradeMe, then the CGA guarantees do not apply. However, it is still best practice to accurately represent the condition and specifications of the goods sold.
Continue reading this article below the formSecond-Hand Sales “As Is”
When selling used goods commercially, businesses often attach an “as is” disclaimer on the sale. This notifies the consumer that the product is being sold in its current condition without any guarantees.
However, such clear disclosure around the product’s condition limits the seller’s liability if any subsequent issues arise with the used goods, provided the “as is” statements are accurate, and all faults or errors are disclosed before purchase.
Key Takeaways
The CGA protects New Zealand consumers. It is designed to hold businesses to certain standards so they cannot sell or provide substandard products. While the CGA does not apply to private sales between individuals, it applies to all businesses and individuals who sell goods for personal or household use, including second-hand goods. This thoroughly represents the condition of these second-hand goods and the protections offered to consumers by the CGA. This ultimately allows for a smoother and fairer transaction for all parties.
If you have further questions regarding consumer guarantees, 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.
Frequently Asked Questions
“Acceptable quality” means that second-hand goods should function properly and have no undisclosed defects, considering their age, price, and condition.
No, the CGA does not apply to private sales between individuals. It only applies to goods sold by businesses to consumers.
We appreciate your feedback – your submission has been successfully received.
