The Law Handbook 2024

710 Section 7: Consumers, contracts, the internet and copyright must not insist that they take a credit, credit note or rain check. The seller must also refund any other form of payment the consumer made (e.g. a trade-in). If this is not possible (e.g. the trade-in has been sold), the seller must refund the value of the payment in another way. • If there is a major failure with the goods, a consumer can keep the goods and recover compensation for any reduction in the value of the goods below the purchase price (s 259(3) ACL). A consumer may not reject the goods where: • the consumer has lost, destroyed or disposed of the goods; or • the ‘rejection period’ has ended – the rejection period runs from the date of supply until the date it would be reasonable to expect the particular failure to become apparent (s 262 ACL). If a consumer is no longer entitled to reject the goods, they are still entitled to compensation for any reduction in the value of the goods. To reject goods, a consumer must notify the supplier of the reasons for the rejection and return the goods. If the goods cannot be returned without significant cost to the consumer, then the supplier must collect the goods at its own cost. It can be difficult to assess whether a consumer is entitled to reject faulty goods. Consumers should get independent expert evidence about the defects in the event of any legal action, particularly in complex matters (e.g. car disputes). Minor failures If the failure to comply with a consumer guarantee can be remedied within a reasonable time and is not a major failure, the consumer may ask the supplier to fix the problem (s 259(2) ACL). The supplier must remedy the failure (free of charge and within a reasonable period) by choosing to either: • repair the goods; • replace the goods with goods of an identical type; • refund the value of the goods; or • cure any defect in title, if applicable (s 261 ACL). If the supplier refuses or fails to remedy the problem within a reasonable time after the consumer’s request, the consumer may: • have the failure remedied elsewhere and recover all reasonable repair costs from the supplier; or • reject the goods (subject to s 262 ACL). Consequential loss and damage In addition to the above remedies for major and minor failures, a consumer may also take action against a supplier of goods to obtain compensation for any reasonably foreseeable consequential loss or damage they have suffered due to the supplier’s failure to comply with a guarantee (s 259(4) ACL). When a consumer may not be entitled to a remedy A consumer may not be entitled to a remedy if: • the consumer has changed their mind, decided they do not like the purchase, or has no use for it; • the consumer has damaged or used the goods in an unreasonable or unintended manner; • the consumer has discovered they can buy the goods or services more cheaply elsewhere (unless the seller guarantees that the goods cannot be purchased more cheaply elsewhere); • the consumer examined the goods before buying them and should have seen any obvious faults; • the consumer has had a defect drawn to their attention before buying (e.g. goods labelled as ‘seconds’ with their faults clearly marked); • the consumer is not happy with a service that the seller insisted on having carried out in a particular way; • the consumer did not make it clear what service they wanted and what they wanted the service to achieve; • the consumer did not rely on, or reasonably rely on, the seller’s skill or judgment when choosing a product or service. A consumer is not entitled to claim against a seller where the failure to meet a consumer guarantee is: • due to something someone else said or did, unless it was their agent or employee; • due to an event that was beyond the seller’s control (e.g. bad weather or delays in delivery). Remedies against suppliers of services A consumer can take action against a supplier of services where there has been a failure to comply with a consumer guarantee (s 267 ACL). The available remedies depend on: • whether the failure can be remedied; and