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Your rights if there’s a problem with something you buy for your business, including faults, substandard work, or being misled before or during the sales process.

When making purchases, businesses can only rely on the Consumer Guarantees Act (CGA) if something goes wrong with a product, service or vehicle that’s usually for household or personal use, eg stationary or a domestic oven.

Even then, retailers, manufacturers and service providers are not bound by the CGA when:

  • the seller and business buyer agree the CGA does not apply — also known as contracting out of the CGA — and put this in writing 
  • it’s fair and reasonable to both seller and business buyer to contract out.

Even if you don’t sign a sales agreement that contracts out of the CGA, if the sale goes ahead, it’s taken to mean you agree. 

Contractual rights

The only rights a business will typically have is what’s written in the warranty, contract or sales agreement. You may still have some rights through common law — rules made by judges when deciding cases — and some specific Acts.

So carefully research any commercial contract before signing it. It’s a good idea to get legal help, especially for expensive items or services.

If something goes wrong once you have bought a product or service for your business, check the contract to see if the fault means:

  • any terms have been broken
  • compensation or another remedy is available. 

If it’s a serious problem — and terms have been broken — you may be able to cancel the contract and get your money back. If the contract doesn’t include a cancellation clause, you can still raise it with your supplier.

Other reasons to cancel a contract include:

  • making a mistake about what’s in it
  • being given false or misleading information
  • it can’t be completed due to events outside anyone’s control, eg an earthquake.

Read more about Changing or cancelling contracts or quotes


Laws that might apply if something goes wrong

A commercial product is anything usually used for a business purpose. Examples include:

  • food ingredients bought by a cafe
  • industrial or agricultural machinery
  • photocopiers
  • products bought for resale, resupply in trade, or use in manufacturing and production.

What you can do

A few products might be covered by the CGA, eg stationery, computers and desks. These are bought by the general public too, and are therefore seen as “consumer products”.
Otherwise you can make a claim under the Sale of Goods Act (SGA) if either:

  • It doesn’t match the sample shown or description given by the seller.
  • It’s not fit for the purpose you told the seller you wanted it for — and the seller normally sells this type of product.
  • It’s not of reasonable quality, eg it doesn’t do what it should — and the seller normally sells this type of product.
  • The seller doesn’t have the right to sell it, eg if money is still owed on it to someone else.

If any of the above apply, you can claim either:

  • a full or partial refund
  • compensation under warranties implied in the Sale of Goods Act.

What to put in sales agreements(external link) — business.govt.nz

What to watch out for

Some sellers contract out of the Sale of Goods Act (SGA). This will be either in the contract or sales agreement, or in the terms and conditions on their website.

If they have contracted out, you’ll see a phrase like this: “No other warranties either express or implied by law are made with respect to these products.” This means your rights might be limited to either:

  • what’s in the manufacturer’s warranty
  • any warranties in the contract itself.

Businesses have few legal protections when buying a commercial vehicle. Unlike vehicle sales to the general public:

  • Those who only sell commercial vehicles do not have to be registered motor vehicle traders
  • The Consumer Guarantees Act doesn’t apply
  • Used commercial vehicles do not have to display a Consumer Information Notice, or a notice about any money still owing on the vehicle.

What you can do

If the problem is due to the trader’s misleading statements, you can make a claim under the Fair Trading Act.

You may have rights to a remedy under the Sale of Goods Act if either:

  • The vehicle doesn’t match the description given by the seller
  • It’s not fit for the purpose you told the trader you wanted it for — and they normally sell this type of vehicle
  • It’s not of reasonable quality — and the trader normally sells this type of vehicle
  • The trader doesn’t have the right to sell the vehicle, eg because money is still owed on it to someone else.

If any of the above apply, you can claim either:

  • a full or partial refund
  • compensation under warranties implied in the Sale of Goods Act.

What to put in sales agreements(external link) — business.govt.nz

What to watch out for

Check the contract or sales agreement to see if the seller has contracted out of this Act. If they have, you’ll see a phrase like this: “No other warranties either express or implied by law are made with respect to these products.” This means your rights might be limited to either:

  • what’s in the manufacturer’s warranty
  • any warranties in the sales agreement.

If you bought the vehicle at auction, contact the Auctioneers Association(external link).

If you bought it from an overseas trader, that country’s consumer agency might be able to help.

Member countries’ consumer agencies(external link) — eConsumer.gov

This could be anything from your broadband provider to your plumber, your courier service to your electricity supplier.

What you can do

If work is not done to a reasonable standard, check the terms of the contract. If any have been broken, you might be able to claim compensation or cancel the contract.

It’s a good idea to get legal advice first — especially if you want to cancel the contract.

You might also have rights under common law rules for contracts and negligence. These are similar to the CGA’s guarantees for the general public:

  • Work must be done with due care and skill.
  • Work must be done in a reasonable time if a timeframe has not been agreed in advance.

What to put in sales agreements(external link) — business.govt.nz

The Fair Trading Act (FTA) covers pricing, advertising, other claims about a product or service, and unfair sales practices. If your supplier breaks the FTA, you can ask them to:

  • vary or cancel all or part of the contract
  • do repairs free of charge
  • give you a refund
  • pay compensation if you suffered loss or damage.

Read more about False or misleading advertising or trading

Under the Contractual Remedies Act (CRA), contracts can be canceled if the supplier:

  • gives incorrect information
  • forces you into signing a contract.

Read more about Changing contracts or quotes

Example:

An accounting firm buys a photocopier, but after six months it no longer works well. Office manager Sarah contacts the supplier, who services the machine. But it’s still not working as it should. Sarah checks the sales agreement and finds the supplier has contracted out of the Sale of Goods Act. But the terms also state that the sale can be cancelled if the supplier can’t repair a fault. So Sarah cancels the contract and gets the firm’s money back to buy a new photocopier.

How to minimise risks

Since your main source of protection is what’s in the contract or sales/service agreement, make sure these documents are clear and legally safe. Even if you leave this type of document unsigned, if the sale goes ahead, it’s taken to mean you agree to the terms and conditions.

It’s a good idea for these documents to include:

  • buyer’s and seller’s details 
  • brief description of product or service 
  • price and terms of payment
  • any delivery deadlines
  • other timeframes, eg start and end dates for services.

If your supplier contracts out of consumer laws when selling to businesses, this must be in writing. If they only do it verbally — or don’t mention it — the laws apply.

What to put in sales agreements — business.govt.nz

Both sides must also be able to decide:

  • any changes to important terms
  • if terms have been breached
  • if the contract should be cancelled.

Cancelling a contract can be tricky and it’s expensive to get wrong. It’s a good idea to get legal advice before taking this step.

How to approach a supplier about a problem

If you have problems with commercial products or services, you may have rights to:

  • cancel the sale and get a refund
  • get repairs done
  • ask for compensation under the Sale of Goods Act, if the seller has not contracted out of it.

Step 1. Check your contract or sales agreement

Look for any terms that have been broken, and what you may be able to claim. Examples include:

  • Price — were you overcharged?
  • Timeframes — did it take longer than agreed?
  • Is the work complete or are there still tasks left undone?
  • If the supplier promises to repair faults, have they done this?

If the breach is serious, you may be able to cancel the contract and claim your money back.

If you want to cancel a contract, think about getting legal advice first. It can be quite complicated — and expensive if you get it wrong.

Step 2: Contact your supplier

Once you are sure it’s a problem you can rightfully claim for, talk to the supplier about what’s gone wrong. Bring paperwork from the sale, proof of the problem and any other information that might help. Be polite but firm.

If the problem is due to accidental damage, or you tried to repair a fault before approaching the supplier, they do not have to put it right.

Step 3: If you need to take it further

Disputes tribunal or district court

If you can’t reach an agreement with the supplier, you may be able to make a claim to the Disputes Tribunal or District Court for:

  • breach of warranties under the Sales of Goods Act if it’s a faulty product
  • breach of contract for commercial services.

If the ruling goes your way, you’ll be able to get your money back. You can also ask the Tribunal or Court to order the supplier to complete their contract obligations.

The Disputes Tribunal is for claims up to $15,000. The District Court is for claims above $15,000.

This is a complicated area. Get legal advice to make a claim.


Read more about Going to the Disputes Tribunal

Read more about Consumer problems caused by suppliers


Commerce Commission

If the problem is due to the supplier’s false or misleading statements, you can make a formal complaint to Commerce Commission. It’s responsible for enforcing the Fair Trading Act and making sure sellers stick within these rules.

The Commission does not investigate every complaint. And the action it takes against sellers who breaks the rules often doesn’t result in financial compensation for buyers. But you can take a claim to court yourself.

Reporting a business or person — Commerce Commission

If you want your money back, it’s best to take action against the supplier yourself.

Need more help?

Contact our Consumer helpline.