Know Your Rights And Wrongs

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The way we buy and sell goods is evolving more rapidly than at almost any other time. With that, comes some assumptions and grey areas in the law when it comes to rights and responsibilities.

There have been some significant changes to consumer protection law since we last wrote about it a few years back, so we thought it worth going over some of the more important things to know about the Consumer Guarantees Act (CGA), which covers consumers buying from businesses – not from private sellers.

The Act has the word “guarantees” in its title because it is expressed as a series of guarantees regarding: title, the quality of a product or service, whether a product is fit for the purpose stated and promised in advertisements or by a salesperson, whether the product is the same as the samples or photographs provided, whether the price is fair and reasonable where the price or a pricing formula is not agreed in advance, whether the product is able to be repaired if required, along with any other express guarantees that may be given.

The other word in the title is “consumer,” which is defined as a person who “acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption.”

In this context, “ordinarily” means it does not matter what each individual customer is buying the goods for. For example, if a business buys goods that are of a type ordinarily supplied for personal, domestic or household use (eg dishwashing liquid for the office kitchen), then it is covered. But if it buys from a trade supplier, it’s not.

Obvious examples of goods covered include personal items like clothes, food, appliances, furniture, and so on.

Motor vehicles are also covered, as are second-hand goods and consumer goods for hire or lease (including hire purchase goods). Electricity, gas, water, and telephone are all covered, as well as – from 17 June 2014 – goods sold by auction or competitive tender.

Goods not covered include houses and trading stock to be on-sold as part of a business activity.

Others things to keep in mind are:

Sellers are not able to avoid the Act by saying they do not make refunds or exchange goods. Nor can they say they are not liable for any “consequential” costs (the costs that you may have incurred as a result of the product being defective).

If the fault is minor, the retailer can replace, repair, or refund the value of the product. If the retailer refuses to make good the repair within a reasonable time frame, then the repair can be done elsewhere and the costs recovered from the original merchant.

If it’s a major fault, the consumer can claim a full refund, a replacement product, or claim compensation for the loss in value of the product.

Where a fault has been made known to the purchaser, e.g. blemished goods, that fault cannot be used as a basis for subsequent complaints.

Gifts are covered – you have the same rights as though it were you who made the purchase.

While changing your mind is not a legal ground for a complaint, if a firm makes this guarantee themselves in their promotional material, they are then bound by their statement.

Damage caused by using goods in a manner other than its intended purpose is also not covered. For example, using a power tool rated for domestic use on a commercial job is at your own risk.

Some readers will recall that a few years back Trademe required commercial sellers to disclose their “in trade” status. That was due to the law change in 2014. Trademe’s website states all professional sellers on their site must disclose their status to make it very clear that they will be subject to the CGA. They must also undertake that:
– The goods are safe, durable and of acceptable quality.
– The goods are fit for their intended purpose.
– The goods are accurately described.

Faults will be fixed within a reasonable time after the sale – or a replacement or a refund will be offered.

Delivery terms are clear, an estimated delivery time is given, and everything will be done to ensure the items arrive in an acceptable condition.

The site goes on to say, “In situations where the CGA does not apply, such as for private one-off sales, then the Sale of Goods Act 1908 (SOGA) will generally apply instead. The SOGA includes warranties that are comparable to the CGA guarantees…”

Trademe is of course a platform provider – they are not the seller so the obligations are with the “Seller in Trade” who sold the goods.

By Frank and Dr Muriel Newman. Read more here.

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