Commercial goods bought for commercial or business use - eg, farm equipment, plant and machinery
Commercial goods used for personal or household use - eg, a commercial washing machine used for a large family
Household goods used in a commercial place -eg, dinner-ware used by a catering company.

The Consumer Guarantees Act

The Consumer Guarantees Act says that goods must meet the guarantee of acceptable quality when sold by someone in trade. It also says what your rights and remedies are if a guarantee is broken.

The Act does not apply to commercial goods - eg, catering equipment, farm irrigation system, plant and machinery.

The Act also does not apply to domestic goods bought for resale or re-supply, or goods bought for use in a manufacturing or production process.

The Consumer Guarantees Act may not apply if you buy goods normally bought for personal, domestic, or household use (eg pens, paper, kitchen supplies) to use in your business. This is because traders can contract out of the Act.

Contracting out of the Consumer Guarantees Act

Many sellers contract out of the Act when the goods are being used for a business purpose.

eg, a marae hires out its facilities and equipment such as kitchenware. When the marae replaces some plates, the shop says the plates won't be covered by the Consumer Guarantees Act because they will be used commercially.

The Sale of Goods Act

You may have rights under the Sale of Goods Act if you have bought

commercial goods
personal, household goods to use in your business and the seller contracted out of the Consumer Guarantees Act
goods for re-supply or resale
goods to use in a manufacturing process.

From 8 July 2003 the Sales of Goods Act applies to computer software.

Remedies under the Sale of Goods Act

If the goods are faulty, you may be entitled to all your money back (a full refund) or some of your money back (compensation).

You may be entitled to a full refund when:

the goods are not of merchantable quality (so faulty that most people wouldn't want them)
the goods are not fit for their purpose
the goods are of poorer quality than a sample you were shown
you told the seller what you wanted to use the goods for and relied on their knowledge but the goods don't do the job
the goods don't match the description
the seller did not have the right to sell the goods.

The Sale of Goods Act is not clear about:

how bad a fault must be before most people would not want the goods
how long is a reasonable time to inspect and use the goods before a fault shows up.

You will need to negotiate with the seller on these points.

In determining whether you are entitled to a refund or compensation you should consider:
how long you would expect goods of this kind to last
how long you used them before the fault appeared
the price you paid
whether the fault means that the goods don't work properly
whether the fault affects the looks of the goods and how important the look is.

If you are entitled to a refund, you are entitled to your money back in cash. You do not have to accept a credit note. You can choose to accept a replacement or repair, if that is more practical for your purposes.

Compensation

Compensation is a sum of money the seller offers you because there is a fault with the goods. If the trader offers a repair or replacement instead of compensation, you can accept that if you wish.

You may be able to get compensation when:

the fault is minor and doesn't affect the usefulness of the goods
you have had more than a reasonable time to inspect and use the goods before a fault appears
you are entitled to your money back but you want to keep the goods
the fault cost you money.

eg, if your washing machine breaks down you can ask the seller to fix the washing machine AND pay the cost of using a Laundromat while the machine is being repaired.

If the goods were expensive or if you stand to lose a lot of money because of the fault with the goods, get advice from your lawyer.

Be Aware

A seller can contract out of the Sale of Goods Act.

Contracting out of the Sale of Goods Act

To check if the seller has contracted out of the Act, look at:

any warranties or guarantees given with the goods
your contract
any receipts or invoices.

eg, if there is a statement that says "No other warranties either express or implied by law are made with respect to these goods" your rights will be limited to whatever the seller has provided in the contract.

The contract may state that the seller will:

repair but not replace goods
repair some parts but not others
limit the time that they will provide any remedy
limit their responsibility to the goods and not to any other damage or loss caused by the fault.

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