By Geoff Hardy - 7 Sep 2018
- 2 comments
What the Consumer Guarantees Act (the
CGA) does is insert some basic guarantees
into every contract for the supply of consumer goods or services,
and those guarantees override anything that the written contract
might say to the contrary. However, the CGA only applies if you are
supplying goods or services to "consumers". And consumers are
individuals, companies, Councils, clubs or other legal entities who
acquire goods or services "of a kind that are ordinarily acquired
for personal, domestic, or household use or
consumption".
Consequently, the CGA can equally apply to business-to-business
sales as long as the product or service is one of those described
above. However the business seller and buyer are allowed to
contract out of the CGA, as long as they do so in writing, and it
is "fair and reasonable" to do so.
Notwithstanding the CGAs' broad coverage, there are some
transactions that are never going to be covered by it. They are
sales of goods or services to customers who acquire them for the
purpose of re-supplying them in trade, or consuming them in the
course of production or manufacture, or (in the case of goods)
carrying on a business of repairing or treating other goods or
fixtures on land. Those customers are excluded from the definition
of "consumer".
In the CGA there are guarantees relating to goods and guarantees
relating to services. The goods guarantees relate to fitness for
purpose, acceptable quality, prompt delivery, compliance with
description or sample, and availability of repairs and spare parts.
The services guarantees relate to care and skill, fitness for
purpose, and completion time.
The definition of "goods" excludes a whole building, or part of
a whole building. However it is generally accepted that "part of a
whole building" means something like an apartment in an apartment
block. So it is questionable whether it includes a building
component such as a deck, a conservatory, a hot water cylinder, or
a spa bath.
In any event, builders are bound by the services guarantees
because building is a service. So one way or another, every
building contract contains CGA guarantees, unless the customer
isn't a consumer, or the customer is a business and the building
contract excludes the CGA guarantees.
In addition to enforcing the CGA implied guarantees against the
builder, the client can also enforce the CGA guarantees as to
acceptable quality, compliance with description, and availability
of repairs and spare parts against the manufacturer of the building
materials that the builder uses on the project. And anyone who buys
those building materials (assuming the materials come within the
definition of "goods") from a consumer inherits the same rights
against the manufacturer, as long as they are an end-user of the
materials.
Of course if the building materials come with product
warranties, the client can also enforce those directly against the
manufacturer. Interestingly, the term "manufacturer" includes not
only the maker of the building materials but also the importer and
distributor of overseas-sourced goods, and anyone whose brand or
mark is on the materials.
If the goods or services supplied to a consumer fail to comply
with a CGA guarantee, then the CGA states what remedies the
consumer has. Those remedies depend upon whether (a) the failure
can be remedied, or (b) the failure cannot be remedied or is
"substantial". For a full explanation of those remedies, contact Geoff Hardy or any
member of our construction law team.