When a business (in trade) supplies you with consumer services there are four consumer guarantees (promises) for services that apply under the Consumer Guarantees Act (CGA).
These service guarantees are that the services will be provided with:
reasonable care and skill
This generally means that any work done must be at least as good as the work of a competent person with average skills and experience for that type of work.
Reasonable skill is about applying their technical know- how. Reasonable care is how much care is taken to do the job properly.
fit for any particular purpose that you have told them about
When you’ve told the service provider what work you want them to do and they accept the job, they must make sure you get what you want.
If the service provider can’t guarantee the work they’ll do will give you the result you want, they have to tell you before they start the job. But they can’t simply get out of their responsibilities by warning you that the job may not be satisfactory if they are inexperienced in that trade.
Also if you are not clear about what you want then the trader may not be responsible, unless they don’t use reasonable skill and care.
When you are given a choice of options for the work at different prices, if you take the lowest price option it may be less fit for purpose. It is reasonable that you may have lower expectations due to the cheaper cost.
Sometimes it may not be appropriate for you to rely on discussions with an employee of that service provider, eg. the receptionist in a large service company.
Be aware: If you insist on a service that the service provider tells you won’t give you the result you want, you may not be able to rely on the ‘fit for any particular purpose’ or ‘reasonable care and skill’ guarantees.
within a reasonable time if no time frame agreed
If you and the service provider haven’t agreed on a time to finish a job, the provider must do so within a reasonable time. Reasonable time is judged on the time it takes a competent person who works in that type of job to complete the task.
charged a reasonable price when the price is not set
If you and the service provider haven’t agreed a price for the job, you only have to pay a reasonable price. You can work out what a reasonable price is by finding out what other providers in your area are charging for similar services.
If you get work done by a business or trader, that doesn’t meet any of these guarantees, you can seek a remedy from them. These guarantees apply automatically whether or not you have a contract with the business who provided the service to you.
Services covered by the CGA
Services include any rights, benefits or facilities that are provided by a supplier, even if they do so free of charge or you don’t have a contract with the supplier. The CGA also specifies a wide range of contracts that are services, eg contracts for the performance of work, contracts of insurance, banking contracts, care or service of others or animals and the supply of electricity, telecommunications, gas, water and the removal of wastewater.
Services don’t include:
- the payment of money without any other services
- the performance of work under an employment contracts (contracts of service).
The CGA applies to anyone in trade providing services such as:
- online traders
- finance companies
The CGA applies to consumer services supplied by businesses:
- received as a gift
- bought on credit
- bought at auction, online, door to door or other types of sales
- hired or leased.
It is the ordinary or common use that people would use that item or service for which determines whether the CGA applies or not.
Services not covered by the CGA
- Commercial services – services that are normally bought for business use or work normally carried out for a business. This includes products used for resupply in trade, use in production or manufacture, or repair of other products in trade.
- Businesses can also contract out of the CGA where personal or household services are bought for a business purpose, eg carpet cleaning in a shop.
- Private sales – when you buy from someone who is not in trade, eg private sellers online
- Products bought by auction or competitive tender (including those bid for online) before 17 June 2014.
- Work done or products donated by a charity for your benefit.
Remedies for faulty services
If you’ve received a faulty or incomplete service, your first point of call should be with the trader to fix the issues for free.
Services are different to products in that you can't return them if they are faulty. The Disputes Tribunal or the courts have additional powers for faulty services to make certain orders if it is just and practicable to do so including:
- transferring any land or personal property as part of the contract
- directing any party to pay any sum that it thinks just to the other party
- directing any party to do or not do something in relation to the other party.
When deciding whether or not to make such an order the CGA sets out various relevant factors such as:
- any benefit or advantage you obtained from the supply of the service
- the value of the services done
- any costs incurred by the supplier
- the extent to which the supplier or you would have been able to perform the contract as a whole
- any other matters it thinks fit.
Your consumer rights in action
The Consumer Guarantees Act (CGA) outlines what a consumer can expect when they buy a product or service from a business. Download an infographic of the CGA here. [PDF, 377 KB]
Business rights for services
Understanding a service provider’s rights will help you know what to expect when you purchase a service. It will also help you know if and when you should approach the service provider if something goes wrong.
Businesses who supply consumer services have a right to:
- contract out, ie opt out, of the CGA if the services they supply will be used for commercial or business purposes
- choose how to price their services
- refuse a consumer’s offer to buy a service, eg if the service can no longer be supplied
- ask questions about and inspect any service a consumer says does not meet the CGA guarantees
- decide to fix the problem with a service, if the problem can be fixed
- refuse to fix the problem if the fault was caused by the consumer or events outside of the service provider’s control
- payment for services that meet the CGA guarantees.
> Read more about Obligations under the Consumer Guarantees Act
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