Businesses - Guarantees applying to Businesses

Business Information
The Ministry of Consumer Affairs provides information for retailers, manufacturers, importers and service providers, to help achieve a fair and informed marketplace.

You have obligations under certain Acts. Information about your obligations under these Acts is explained in everyday language in this section. These pages are specifically written for retailers, manufacturers, importers and service providers. There are also two other sections on our website carrying specific information for business:
  • Measurement covering a wide range of topics and issues on weights and measures
  • Product Safety covering information on Product Safety Standards, the Fair Trading Act and carrying out a product recall.

Consumer Guarantees Act 1993
The Consumer Guarantees Act (CGA) is about the quality of goods and services. It offers protection to customers who have had poor quality work carried out for them by a tradesperson or purchased goods, from a person in trade, that do not meet reasonable expectations. The Act came into effect on 1 April 1994. It covers goods and services provided from that date on.

You cannot choose to opt out of this Act. The only exception is if you are providing a service or selling goods to a business. If you try to contract out, you will be breaching the Fair Trading Act. The Fair Trading Act says you cannot mislead a customer about their rights. The penalties for doing so are substantial - up to $60,000 for an individual and up to $200,000 for a business.

Goods Covered by the Act
The Act applies to all goods normally bought for personal or household use - eg, clothes, food, appliances, and furniture.
It includes goods used in a house - e.g. roofing iron, wall boards - but not an entire house. Vehicles, pets, plants and trees, and second hand goods are also covered.

The Act applies to goods sold by hire purchase and goods hired out for use.
If you sell goods that are not normally bought for household use - eg, a hardware shop may sell tools that only professional tradespeople use -sales of these goods will not be covered by the Act even when they are bought by a consumer for household use.

The test is ...

  • what do customers usually do with the goods?
  • are they normally bought for personal use?
  • you do not have to consider what each individual customer is buying the goods for.

From 8 July 2003, the Consumer Guarantees Act applies to

  • Electricity
  • Gas
  • Water
  • Computer software

This means that from 8 July 2003 you must meet the guarantees contained in the Consumer Guarantees Act when you supply those goods to consumers.