When you have asked for a service and it is poorly done, taking too long, or isn't working how you expected you may be covered by the Consumer Guarantees Act (CGA).
Did you know
You can ask businesses to fix the problem, even if you bought the service at auction, from an online trader, or from an agent or broker who sells on behalf of someone.
Your rights and remedies under the Consumer Guarantees Act can be divided into three categories:
- the problem can be fixed and is not serious (minor)
- the problem is serious or cannot be fixed (serious)
- the problem has caused damage or extra loss (consequential loss).
If the services are not covered by the Consumer Guarantees Act, your rights and remedies exist either in the terms of the contract or the common law rules for contracts, ie rules made by judges.
Services bought for personal or household use
Services normally bought for personal or household use are covered by the CGA if supplied by a business. You don't need to have a contract with the supplier. This also includes services where you have contracted a trader to sell an item on your behalf, eg a boat dealer, a car dealer or a recycled clothing trader.
Services covered include work done by:
- tradespeople and subcontractors who are contracted by the main contractor
- professionals, eg lawyers, accountants, doctors
- services relating to (but not for) the supply of gas and electricity, eg meter reading, disconnection
- services relating to and for the supply of telecommunications, water and wastewater removal
- other service providers, eg banks, repairers, insurance companies and much more.
Tradepeople and the CGA
Services for business use
The only time the CGA guarantees can be excluded (also called contracting out) is if you use consumer services for business use. The clause must be written and specifically state that the CGA is excluded.
It also has to be fair and reasonable to do so, which depends on:
- type of services
- their value
- the ability of the parties to negotiate, or if it is a ‘take it or leave it’ standard form contract
- legal advice received.
It’s an offence to contract out of the Act in any other circumstances under the Fair
Trading Act. See the Commerce Commission's factsheet on Your obiligations as a business(external link).
Services not covered by the CGA
- commercial services
- work done by a charity
- services paid for with a statutory fee such as rates.
If things go wrong
Contact the service provider
Go back to the service provider as soon as you discover the problem. Explain what the problem is and how you would like it to be resolved. Bring proof of purchase such as a receipt, bank statement or the contract for services.
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: Faulty products and services
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Business use not covered by the Consumer Guarantees Act
Mandy employs a cleaning company to clean her business premises. Mandy is not happy with the standard of cleaning after a month. Mandy is not covered by the Consumer Guarantees Act as the service contract specifically excludes the Consumer Guarantees Act since this is for commercial premises. Mandy will have to rely on the terms and conditions of the contract in the first instance to decide if there is a breach of contract. She should contact the cleaning company and make a complaint.
Work done incompetently
Rob has his work suit drycleaned. When he collects it, the trousers have shrunk and the colour is patchy. This is a serious problem. Rob can ask for a refund of the drycleaning fees plus compensation for the extra damage caused to his suit, under the CGA guarantee of services being carried out with reasonable skill and care.