The reform will affect many different types of contracts where goods or services are supplied and given the substantial fines that could be imposed on traders, the new legislation does need to be taken seriously. The legislation is in force now.
The following list is not exhaustive but highlights what I think are the most important provisions.
CONSUMER GUARANTEES ACT
§ Guarantee of acceptable quality - applies to goods delivered to the consumer from the time that the consumer receives the goods. This means that the consumer can claim remedies from the supplier for delivery damage. A supplier can seek to contract out of this guarantee in B2B deals, but not where their customers are non traders.
§ Guarantee as to delivery - there is a new guarantee that where the supplier is responsible for delivery or arranging delivery to a consumer, the goods will be delivered within the time agreed or otherwise within a reasonable time. The consumer can reject the goods for breach if the failure is of a substantial character and/or sue for damages. The consumer may be awarded damages even if they choose to keep the goods. Businesses need ensure that promised delivery times are realistic and need to monitor their deliveries. A supplier can seek to contract out of this guarantee in B2B deals, but not where their customers are non traders. In the latter case, the supplier would want to ensure that they have recourse under their delivery contracts and/or check their insurance cover.
§ Electricity and Gas - except for non reticulated gas, electricity and gas are no longer goods and are covered by a new specific guarantee as to acceptable quality. Suppliers will have limited rights of indemnity against providers of line function services. A supplier can seek to contract out of this guarantee in B2B deals, but not where their customers are non traders.
§ Collateral Credit Agreements arranged by Suppliers - where the is a collateral credit agreement e.g. supplier sells goods and arranges for the buyer to enter into a finance arrangement with a third party, if the buyer rejects the goods, the supplier can be ordered by the court to pay the financier. This is designed to ensure that where a consumer has the right to reject the goods, they can seek to have the supplier made liable to meet the finance commitments.
FAIR TRADING ACT
§ Unsubstantiated Representations - a trader mustn't make an unsubstantiated representation in trade (unless it's a representation that a reasonable person wouldn't expect to be substantiated). A representation will be unsubstantiated if the trader didn't have reasonable grounds for making it at the time (doesn't matter if they later could substantiate it). Where a trader seeks to rely on information, representations etc provided by any supplier or manufacturer further up the line, they will need to show that it was reasonable to rely on them. They may need to make inquiries to satisfy themselves that any reliance would be reasonable. Traders can't contract out of liability for making unsubstantiated representations.
§ Extended Warranties - have to be justified and explained, in accordance with the requirements of the Act. There is a 5 working day cooling off period. On cancellation, the supplier must refund all consideration received for the warranty.
§ Online Auctions including Competitive Tenders - the definition of "auction" is modernised, to include auctions that take place on the internet, on the phone, or by any other means. If the vendor of an auction is selling goods that consumers usually acquire for personal, domestic or household purposes, and the vendor is selling those goods in trade as a supplier, the notice must include that information.
§ Product Safety – there is a regime dealing with voluntary product recalls, as well as compulsory recalls.
§ Unsolicited Goods - the sender of unsolicited goods must inform the recipient of their rights and obligations, including the fact that the recipient does not have to pay for the goods, and that they must make the goods available for collection by the sender during the period of ten working days after the goods are received. If the sender does not provide the relevant information to the recipient, or does not collect the goods within 10 days, the goods will be treated as being an unconditional gift to the recipient. Recipients of unsolicited services are not liable to pay for those services (except for reticulated gas and electricity).
§ Layby Sales - from now on, layby sales will be governed by the Fair Trading Act. The Fair Trading Amendment Act has changed the definition of a 'layby sale' slightly, and has increased the maximum price for purchases that will constitute layby arrangements from $7,500 to $15,000. Businesses must now provide customers with a clear written agreement, and are required to provide individuals with certain information, including details about the individual's right to cancel the sale. Any cancellation charge must not be more than reasonable costs incurred by the seller.
§ Uninvited Direct Sales (like the old Door to Door Sales) - customers will have 5 days in which they can cancel uninvited direct sales agreements if they are approached by a vendor selling goods or services while they are at home, work or over the telephone. Any uninvited direct sales agreement must be a clear written agreement, including details such as a description of the product, and the full purchase price. The seller must tell the buyer about their cancellation rights before the contract is entered into.