The Consumer Guarantees Act 1993 ("CGA") applies to the supply of goods and services to consumers and offers considerable rights and remedies in the case of faulty goods and/or
inadequate services.

Who does it protect?

The CGA applies to any supply of goods or services to a consumer. A consumer is anyone acquiring goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption (except where goods are purchased for re-supplying in trade, using to manufacture or process goods or to repair in trade other goods or fixtures on land).

If you acquire goods or services of a type normally purchased for personal, domestic or household use, you are a consumer. Providing the goods or services fall into the personal, domestic, or household use category, the CGA applies even if you purchased them for business purposes.

Individual contracts for business suppliers

You can contract out of the CGA only when supplying to a business. If you have not contracted out, the CGA will apply to the purchase of the office computer, work vehicle or tearoom microwave.

What must a vendor do to comply?

The CGA provides a number of guarantees to protect the consumer and regulates the standard of goods or services in the marketplace. The vendor must:

  • have the right to sell the goods
  • ensure goods are of an acceptable quality
  • provide services using reasonable care and skill
  • ensure the goods or services are fit for the consumer's purpose for acquiring them or any purpose represented by the seller
  • ensure the goods comply with any description and/or sample supplied
  • supply goods or services at a reasonable price, and provide services in a reasonable time
  • make sure that repairs to goods and spare parts are available.

Is the price right?

Where a price has not been previously agreed for goods or services, the consumer does not need to pay more than a reasonable price. If the price has not been discussed, the consumer can order goods from a supplier, without the fear that the supplier will charge more than what is reasonable for those goods.

How long should I wait?

A common complaint is that the time of delivery of goods or services does not meet a customer's expectations. Under the CGA, goods must be provided, and services completed within a reasonable period of time.

Consumer remedies

Where there has been a minor breach or defect, the supplier may elect to either repair, replace or refund the goods, or rectify the services. If this remedy is not completed within a reasonable period of time, the consumer can reject the goods, and in the case of services, either cancel the contract, or have the failure remedied elsewhere and recover all reasonable costs involved.

Where there is a substantial defect, the consumer can either have the goods replaced or demand a refund. In the case of services, the consumer can cancel the contract or obtain damages for any reduction in value. The consumer can also obtain damages for any losses that are reasonably foreseeable. Losses can include the cost of re-installing goods, restoration of premises, loss of use of goods, emotional stress, loss of wages and business losses (where the supplier has not contracted out of the CGA).

Compliance for businesses

If you are in business, the cost of non-compliance under the CGA can be very high – ensure you comply! Please talk to us if you need assistance.

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Published: Mon, Mar 1st, 2004

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