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Legal Articles


Consumer Rights


If conventional wisdom is to be believed, we are all supposed to indulge in a frenzy of shopping before we retire. As we embark upon a new and more relaxed lifestyle we should have a new car and be surrounded with shiny new household appliances and toys that might just “see us out”, or at the very least, reduce our future household repair bills.


What happens if the new car turns out to be a lemon and the shiny appliances do not live up to the sales pitch delivered at the mega store? The good news is that there has never before been a time in history when so much statutory protection has been available to the consumer. The trick is to know your basic rights and not be afraid to advocate them.


Our main rights are found in The Fair Trading Act 1986 and The Consumer Guarantees Act 1993. Although there is some overlap between the Acts, in general terms, The Fair Trading Act deals with rights connected with how business is carried out (pre-sale rights) and The Consumer Guarantees Act deals with issues of quality (post-sale rights).


Under the Fair Trading Act anyone engaged in business must not indulge in misleading or deceptive conduct, make false representations, or engage in unfair practices. These terms are defined quite widely and refer to both the sale of goods and the provision of services. The Act also has provision for safety standards and the recall of unsafe products. Furthermore, activities such as pyramid selling, bait advertising, and some types of prize competitions, are forbidden.


If you have been the victim of unfair trading you can seek redress in the Court, or the Disputes Tribunal, if the amount claimed is under $7,500.00. An action needs to be brought within three years of the matter arising. Remedies available include: the refund of money and return of goods, monetary awards of damages and orders for repairs. For major breaches of the Fair Trading Act, where there is a public interest element, the Commerce Commission can seek injunctions, require corrective advertising to be undertaken and launch prosecutions.


The Consumer Guarantees Act, as the name suggests, is primarily concerned with providing statutory guarantees to domestic consumers of goods and services in the ordinary course of their dealings with suppliers. Guarantees extend both to issues of title and of quality. For example, if you buy a new television set from your local appliance store, there is a statutory requirement that the shopkeeper can pass full legal title in the goods to you and that they are of an acceptable quality and reasonably fit for any purpose made known by the you to the supplier. In addition, the goods must correspond with any description given or sample displayed. In the case of the supply of a service it must be carried out with reasonable care and skill, be reasonably fit for its particular purpose and achieve the normal expected result. The service must also be supplied in a reasonable time frame and at a reasonable price, if timing and price have not been agreed at the outset.


There are a number of remedies for breaches of the Consumer Guarantees Act. Where a defective item can be repaired, the consumer can require the supplier to repair it within a reasonable time. If the supplier does not do so, the consumer can arrange repairs elsewhere at the supplier’s expense. The supplier can replace the repairable item with identical goods instead of repair. If the defect cannot be reasonably remedied then the consumer has the choice of receiving a replacement or obtaining a full refund of the purchase price. Damages for foreseeable loss are also available.


In the case of defective services the supplier is required to remedy the failure in a reasonable time and if there is failure to do so, the consumer has a choice either to get the services provided elsewhere at the original supplier’s cost or to cancel the contract. There are also rights to seek compensatory damages for loss. The Courts and Disputes Tribunals have wide-ranging discretions as to the types of orders they can make to remedy a breach of a consumer guarantee.


For your “lemon” motorcar there is an additional remedy available. If it is worth less than $50,000.00 in value and was purchased from a licensed motor vehicle dealer, the specialised Motor Vehicle Disputes Tribunal is available to resolve your dispute.


It can be seen that there are a whole raft of legal remedies available for the disgruntled consumer. You are entitled to ignore any restrictions imposed by a manufacturer’s warranty or guarantee and insist upon your statutory rights under our consumer legislation. We consumers are now empowered and should not hesitate to demand honest service and good quality merchandise.



Disclaimer: The information contained in this article is of a general and summarised nature only. It should not be used as a substitute for obtaining personal legal advice.


©Terry Carson 2008


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