The Sale of Goods Act

You may have rights under the Sale of Goods Act if you have bought

  • commercial goods
  • personal, household goods to use in your business and the seller contracted out of the Consumer Guarantees Act
  • goods for re-supply or resale
  • goods to use in a manufacturing process.

From 8 July 2003 the Sales of Goods Act applies to computer software.

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Remedies under the Sale of Goods Act

If the goods are faulty, you may be entitled to all your money back (a full refund) or some of your money back (compensation).

You may be entitled to a full refund when:

  • the goods are not of merchantable quality (so faulty that most people wouldn't want them)
  • the goods are not fit for their purpose
  • the goods are of poorer quality than a sample you were shown
  • you told the seller what you wanted to use the goods for and relied on their knowledge but the goods don't do the job
  • the goods don't match the description
  • the seller did not have the right to sell the goods.

The Sale of Goods Act is not clear about:

  • how bad a fault must be before most people would not want the goods
  • how long is a reasonable time to inspect and use the goods before a fault shows up.

You will need to negotiate with the seller on these points.

  • In determining whether you are entitled to a refund or compensation you should consider:
  • how long you would expect goods of this kind to last
  • how long you used them before the fault appeared
  • the price you paid
  • whether the fault means that the goods don't work properly
  • whether the fault affects the looks of the goods and how important the look is.

If you are entitled to a refund, you are entitled to your money back in cash. You do not have to accept a credit note. You can choose to accept a replacement or repair, if that is more practical for your purposes.

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Compensation

Compensation is a sum of money the seller offers you because there is a fault with the goods. If the trader offers a repair or replacement instead of compensation, you can accept that if you wish.

You may be able to get compensation when:

  • the fault is minor and doesn't affect the usefulness of the goods
  • you have had more than a reasonable time to inspect and use the goods before a fault appears
  • you are entitled to your money back but you want to keep the goods
  • the fault cost you money.

eg, if your washing machine breaks down you can ask the seller to fix the washing machine AND pay the cost of using a Laundromat while the machine is being repaired.

If the goods were expensive or if you stand to lose a lot of money because of the fault with the goods, get advice from your lawyer.

Be Aware

A seller can contract out of the Sale of Goods Act.

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Contracting out of the Sale of Goods Act

To check if the seller has contracted out of the Act, look at:

  • any warranties or guarantees given with the goods
  • your contract
  • any receipts or invoices.

eg, if there is a statement that says "No other warranties either express or implied by law are made with respect to these goods" your rights will be limited to whatever the seller has provided in the contract.

The contract may state that the seller will:

  • repair but not replace goods
  • repair some parts but not others
  • limit the time that they will provide any remedy
  • limit their responsibility to the goods and not to any other damage or loss caused by the fault.

This information is brought to you by Ministry of Consumer Affairs