Consumer Guarantees Act

 To protect consumer interest, ensure business compete effectively, consumers/business participate effectively
 Scheme: guarantees in respect of supply of goods, rights of redress against suppliers of supply, redress against
manufacturers in respect of supply, supply of services, misc. provisions
 Supplier – supply of goods must be in trade (excluded charitable org) building or attached to land not included
 Consumer – acquires goods ordinarily supplied for personal use, is end user (not for resale)
 Nesbit v Porter: N buy Nissan from P, found defects. Complaint rejected on basis vehicle classed as commercial,
not covered by warranty. Court of Appeal: Issue - whether N are consumers, held: N were consumers, about 20%
of buyers buy Nissan for private use, purchase not uncommon. CGA apply, lost right of rejection N took longer
than reasonable time to take action
 Guarantees w/ respect to supply of goods: As to title (S5): must pass to buyer, (hire-undisturbed possession
during hire period), Delivery (S5A): goods received at agreed or reasonable time (failure entitles remedies),
Acceptable quality (S6): failure to comply gives rights of redress against supplier (Acceptable – fit, acceptable,
free from defects), redress for breach against supplier/manufacturer
 MCM v FSC Ltd: sale of 2nd hand mower, advertised good condition, buyer inspected. FSC sell as agent, broke
down, cost of repair more. 2 issues: was agent a supplier? (yes, supplier supplies by transferring ownership) Was
mower of acceptable quality? (no, series of defects, not individually substantial, may amount to failure of
substantial character)
 Supply of gas/electricity (S7A/7B): acceptable means safe, reliable, appropriate quality
 Fit for particular purpose (S8): must be known to supplier, rely on supplier’s skill/judgment – guarantee not exist
if not rely or if unreasonable to rely. Failure to comply gives redress against supplier (must inform seller if put to
unusual use, only suppler can be held liable)
 Comply with description (S9): must comply with supplied description (redress for breach: supplier/manufacturer)
 Comply w/ sample (S10): by reference to sample (redress supplier only)
 As to price (S11): Consumer not liable to pay more than reasonable price when price not stated (right of redress
is refusal to pay more
 As to repair/ spare parts (S12): manuf ensure availability of spare parts for repair after goods supplied, redress
only against manuf, permit supplier to notify consumer manuf does not supply parts for repair or only avail for
limited period
 Redress against supplier: fail to comply: can be remedied (supplier remedy or customer can have goods
remedied elsewhere and charge supplier or reject goods, cannot be remedied (reject, claim damages for loss) or
is of substantial character (goods would not be acquired by reasonable consumer aware of extent of failure,
depart from description, unfit for purpose made known to supplier, cannot be remedied to make fit within
reasonable time)
 Cooper v Ashley Johnson: series of minor defects accumulate – constitute substantial defect – can reject
 Buyer entitled to reject (S22): must notify supplier goods being rejected, grounds of rejection
 Right to reject lost (S20): not exercised within reasonable time, goods disposed or lost (not in supplier
possession), damage after delivery (not related to supply), attached to real property (cannot be detached)
 Option when reject (S23): refund or replacement; Rights of donees (S24): same rights as if donee was purchaser
 In respect to supply of services
 Reasonable care/skill (S28): cannot be w/o reasonable care/skill
 Fit for particular purpose (S29): rely on supplier’s skill/judgment – guarantee not exist if not rely or if
unreasonable to rely
 Time of completion (S30): reasonable time or usual course of dealings
 Redress against supplier w/ respect to services (same as goods), except given option to remedy defects unless
cannot be remedied or is of substantial character
 Services is substantial if: service would not be acquired by reasonable consumer aware of extent of failure, unfit
for purpose, cannot be remedied easily, unsafe
 Contracting out generally not permitted except for business transaction or else contracting out an offense and
ineffective
 If contract out permitted: must be in writing, acquired in trade, parties in trade, all agree to contract out,
fair/reasonable
 Rights of rejection: only if of substantial character (failure), all cases have right to damages arising from failure
 Effect of cancellation: customer entitled to recover refund except when court says supplier can retain, if contract
performed so far no party should be deprived of money transferred, no party shall be obliged to perform any
unperformed obligation further