Consumer Guarantees Act
Issue
The issue at hand is that a client purchases a washing machine from a retailer but discovers upon attempting to use it that it is faulty. It is unclear whether a similar test was conducted at the time of purchase of the commodity. However, the buyer decides after discovering that the machine is faulty that she needs a full refund. This implies that she has decided to terminate the contract and wants a full refund of her money. The second issue is that the seller denies her the choice of terminating the contract. The seller sites a notice of ‘No refunds’ that has been pinned on the wall to justify his decision to deny the client her request. Therefore, the case points to two issues of law under the Consumer Guarantees Act. The first issue is whether a buyer is legally allowed to terminate a contract upon discovering that goods sold to them are faulty and demand full refunds. The second legal issue is whether a seller has the right to deny a buyer termination of a contract and a full refund thereof based on a notice pinned on the wall of the business premise suggesting that refunds are not allowed
Law
The Consumer Guarantees Act of 1993 sought to provide legal solutions to such issues. Moreover, the Consumer Guarantees Act was drafted with the interest of the consumers at heart. The law recognizes the challenges that consumers go through in the hands of unscrupulous business people (Consumer Guarantees Act | Consumer Protection, 2020). Therefore, the Consumer Guarantees Act of 1993 introduces numerous regulations defining the engagement between the buyers and the sellers. One of the laws asserts that it is illegal for merchants to contract outside the rules of the Consumer Guarantees Act (Tokeley, 2015). One of the activities that are considered to contravene the Consumer Guarantees Act of 1993 is the use of public notices within business premises (Twigg-Flesner, 2010). Examples of such statements are ‘no refunds’ and ‘no returns.’ The law, therefore, does not recognize such activities hence are null and void. Additionally, the act asserts that in the event that a commodity is faulty, the retailer has an opportunity of a reasonable time to replace or fix the faulty good if; the seller does not show any interest in fixing or replacing the commodity, the consumer reserves the right to terminate the contract in its totality and request for a full refund from the seller.
Application
In the case of Audrey, where she purchases the washing machine only to realize it is faulty when attempting to use it at home, the Consumer Guarantees Act provides the legal framework which should help in resolving the case. Based on the case, the seller is in contravention of the Consumer Guarantees Act. One of the ways through which the seller breaks the law is by basing his refusal to guarantee refund on a notice of ‘no refunds’ pinned on the business premise. The argument does not fly since the law Consumer Guarantees Act stipulates that such notices are illegal hence not applicable when dealing with a client. Secondly, when the buyer raises the concern about the machine being faulty, the seller had two options under the law. The two options were either conducting a repair of the machine or offering the buyer a replacement (Weeks, 1995). However, the seller has contravened the law by ignoring the two options. Furthermore, the buyer’s request for a refund is within the law. The law gives a buyer the discretion of terminating a contract and requesting for a full refund. In this case, the decision of Audrey to demand for a refund is legal as the buyer has not committed to either repair the machine or replace it with a functioning one. The seller, therefore is in violation of the Consumer Guarantees Act.
Conclusion
In conclusion, the issues at hand relates to the Consumer Guarantees Act. Therefore, in solving the problem, the Consumer Guarantees Act will be used. Moreover, the seller is in contravention of the law. If the matter it taken before a court of law, the seller is likely to be on the losing end hence will be subjected to more losses. For instance, if the court finds the seller on the wrong, they may be ordered by the court to pay for the damages that the buyer has incurred in sustaining the suit such as the legal fees. It will be therefore more appropriate for the seller to find a solution of the situation and settle it before it gets to the court. Court cases impose adverse effects to businesses as they are expensive to sustain. Furthermore, when found to be on the wrong as is likely to be the case for the seller in this situations, there are far reaching financial implications. Moreover, it is critical for every individual involved in business to be conversant with the relevant laws such as the Consumer Guarantees Act to avoid actions that may cause massive financial implications to their businesses.
References
Weeks, C. L. (1995). The Consumer Guarantees Act 1993: has this act changed the extent of manufacturer’s liability for defective products?.
Tokeley, K. (2015). Unprotected Consumers Under the Consumer Guarantees Act 1993.
Twigg-Flesner, C. (2010). The law on guarantees and repair work. Longer Lasting Products: Alternatives to the Throwaway Society, 195-214.
Consumer Guarantees Act | Consumer Protection. (2020). Retrieved 29 August 2020, from https://www.consumerprotection.govt.nz/general-help/consumer-laws/consumer-guarantees-act/