Your rights when a tradesperson or other service provider does not finish the job or you are overcharged.

Breaking an agreed price or completion date

If you have a contract or quote with a tradesperson or other service provider and they don’t complete the work, this is a breach of the contract. Similarly, if you have agreed a price for the work, then this is the price that you pay.


No agreed price or completion date

However, if you haven’t agreed a price or a completion date in the contract and the services are for ordinary personal or household use, you only have to pay a reasonable price for that type of work and the job needs to be done within a reasonable time.

Services covered by the guarantees in the Consumer Guarantees Act include work done for you by:

  • tradespeople – eg painting, plumbing, car servicing or building work
  • professional people such as doctors, lawyers and dentists
  • other service providers – eg appliance repairers, insurance companies, banks, dry-cleaners, hairdressers and movie theatres
  • utility providers supplying electricity, gas, telecommunications, and water or removing wastewater.

It’s a good idea to get a range of quotes from trustworthy businesses before you decide on a service provider to do the job. It’s also important to read the terms and conditions of the contract carefully before you sign it.

See also:

 

Know your rights

You have two sets of legal rights for work not completed or being overcharged:

The relevant consumer guarantees for services include:

  • Any service must be carried out with reasonable care and skill. Arguably if the job is not done fully then it is not meeting this standard. What is reasonable is measured against what other competent people of the same profession or trade or occupation would do in that situation.
  • A job must be completed within a reasonable time if no completion time or date was agreed. This is judged on the time it takes a competent person who works in that type of job to complete the task.
  • Services must be fit for a particular purpose that you made known to the service provider.
  • Services must be charged at a reasonable price when the price is not set. You can work out what a reasonable price is by finding out what other providers in your area are charging for similar services.

Minor problems

If you have minor problems with the services or the materials provided, you can ask the supplier to remedy the fault first. If they refuse or fail to do so within a reasonable time, you can:

  • go elsewhere and claim the costs of those services from the first supplier, or
  • cancel the contract and pay a reduced price for the work already done.

Serious problems

If the failure is serious or substantial, then you may:

  • cancel the contract for services and claim all of your money back, or
  • claim a partial refund if some of the work is fine or the materials already supplied are suitable.

You also have the right to claim for compensation for reasonably foreseeable extra losses arising from any breaches of the service guarantees.

Read Faulty or unsatisfactory services to find out more.

When the supplier is not liable for work not completed

Events beyond the supplier’s control

Under the CGA, service providers are not liable if they don't comply with two of the guarantees for services (fitness for purpose and time of completion) where the failure is:

  • a cause independent of human control
  • because of an act or omission by a third party who is not the supplier or their agent.

This means that the supplier is not liable for a failure to complete the work or that it is not fit for a particular purpose if the breach is completely beyond their control. This is similar to a force majeure or ‘act of god’ clause that is common in most contracts. But it doesn’t include strikes.

Failure by third parties such as subcontractors

There is some uncertainty whether subcontractors are liable under the CGA if they don’t complete their work or the products of their service are unfit for a particular purpose.

Their liability depends the actual contract terms and what services the main contractor agreed to supply. If they only agreed to arrange the services of a subcontractor, they have to use reasonable care and skill to choose a subcontractor.

However, if the builder as the main contractor agreed to supply the whole service (for example renovating a bathroom), but uses subcontractors such as plumbers or electricians, then the builder is still liable for the whole service including any plumbing or electrical work.

Ultimately the courts may try to ensure both subcontractors and main contractors are liable for the consumer guarantees, otherwise it would be easy to avoid liability under the Act.

Breach of contract

If the contract sets out a completion date and a fixed price, then it is a breach of contract to not comply with either or both those terms.

You may use the Contract and Commercial Law Act (CCLA) when the CGA doesn’t apply, eg to cancel a contract for breach or misrepresentation involving commercial services or private sales. This is useful when the service provider fails to complete the job or tells you something that is untrue to get the work.

If you’re cancelling for this reason, the completion of the job must be essential to you and the breach must either increase your obligations or decrease the benefits you should have been getting.

If a statement was untrue, you can claim damages based on the position you would have been in if the statement had been true and cancel the contract.

A service provider can also contract out of the CCLA, so that it doesn’t apply by a clause in the contract.

Force majeure and other natural disasters

This clause excludes or limits a business’s responsibility if a service is or will be affected by some external event, eg fire, flood, earthquake, storm or other natural disasters that prevent a party from performing the contract. Usually both parties then don’t have to do anything further under the contract, which ends. You can get a refund if you have paid in advance.

The supplier will have to show that the event has, made it impossible to continue to operate the business. They can’t use extra cost or inconvenience as a reason not to complete work or provide a service.

Lastly, a business may argue that the contract is frustrated under the CCLA. A contract is frustrated when it is impossible to carry out the contract or it becomes significantly different to what you agreed to. Then the business doesn’t have to provide the service, and you don’t have to pay anything or you get a refund if you have paid already.

Some situations where frustration has been used include:

  • the subject matter of the contract ceases to exist or is destroyed
  • one of the parties dies or becomes incapacitated
  • external events delay or prevent performance
  • the work is illegal.

Contact the supplier

Go back to the supplier as soon as you discover a problem. Explain what the problem is and how you would like it to be resolved. You should take along proof of purchase, such as your receipt or bank statement or the contract for services.

If the problem is minor, the business can choose to repair, replace or refund your money. If the business fails to act or is unable to fix the minor fault or the fault is serious, you may then reject the products or services and ask for a full refund. You need to give your reasons for doing so, preferably in writing. You may refuse to pay any invoice for services if you have not already paid.

See also:


Next steps

If you are unable to resolve your issue directly with the retailer, manufacturer or service provider, our Resolve It tool has information to help you take the next steps. These may include going to the Disputes Tribunal or District Court.

Resolve it: Contracts


Need more help?

Contact us for more guidance.

Common situations

Overcharged for a service

Janet agrees to a painter painting her fence over a week in the school holidays. The painter estimates the total cost will be $1,200 but in fact bills her $1,600. She is surprised, as the work was completed much more quickly than he originally estimated. Janet then asks for some quotes from other exterior painters and finds out the going rate is closer to his original estimate. She will have to discuss the bill with the painter first and see if the he will reduce his bill. If they can’t agree, she’ll have to go to the Disputes Tribunal to decide what a reasonable price for the job is.

Work not completed due to earthquakes

Cindy runs a food catering service that delivers meals and catering to office workers at lunchtime and for private functions. She is unable to do so for a few months after an earthquake damages her kitchen, until the repairs are done. Cindy is not liable to any of her clients for the failure to deliver meals or catering functions already booked in that month. As the earthquake was an event beyond her control, she can rely on the force majeure exception under the Consumer Guarantees Act or the force majeure clause in her catering contracts with businesses.