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Communtity Law Manual | Consumer protection | Automatic guarantees when buying from a business

Automatic guarantees when buying from a business

Introduction

The Consumer Guarantees Act 1993 gives you some automatic guarantees whenever you buy goods or services from a business for personal or household purposes.

Who is a consumer?

You are a “consumer”, so you are protected by the Consumer Guarantees Act when you buy goods or services from a business and you’re using them for personal or household purposes. (You are not protected by this Act if what you are buying is not the sort of thing that is ordinarily used for personal or household purposes – for example, a photocopier.)

If you receive goods as a gift from the person who bought them, you have the same rights against the seller and the manufacturer as if you bought the goods yourself.

Can a seller contract out of the Consumer Guarantees Act?

Consumer Guarantees Act 1993, s 43

No. A seller can’t contract out of their obligations to you under the Consumer Guarantees Act if you’re buying goods or services for personal or household purposes.

Sellers can only contract out of the Act if:

  • both buyer and seller are traders who are making the transaction for business purposes, and
  • the agreement to exclude the Act is in writing, and
  • it’s fair and reasonable that buyer and seller should be bound by it. What is fair and reasonable will depend on the particular context, including the value of the goods or services, any difference in bargaining power, and whether either or both sides had a lawyer.

In general, traders who try to contract out of the Act (for example, by displaying signs such as “No refunds”) are committing an offence under the Fair Trading Act 1986 by misleading consumers about their rights. Such traders can be fined (see “Protections against misleading or unfair trading” in this chapter).

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