You are buying a shiny new top-of-the-range television with a 2 year warranty. The salesperson asks if you would like an extended 5 year warranty for only $249.95 extra. Sounds sensible, right?
Many consumers do not realise that the Consumer Guarantees Act 1993 (‘Act’) already provides most of the extra protection that they have been offered under an extended warranty. If you purchase consumer goods or services for personal, domestic or household use, the Act imposes several warranties or guarantees on the vendor. In particular, the vendor guarantees that the goods sold:
Similarly, any services you purchase must be:
Consider your new television. Would the ordinary, reasonable consumer consider that a shiny new top-of-the-range television would be free from defects or suitably durable to last 5 years? 10 years? If so, it’s possible that the additional warranty you have been offered is not as valuable as it appears.
As an example, let’s say you bought a television and chose not to buy an extended warranty. 3 years later it stops working, and the vendor wants to charge you to replace the failed LCD controller because the television is out of warranty. What now?
You may need to demonstrate that it is reasonable for you to expect your television to last more than 3 years (and that the failure was not caused by you). It should then follow that the television could not reasonably be considered durable enough – a breach of a warranty implied by the Act. You should then be entitled to require the vendor to remedy the failure.
If it can be fixed, the vendor must repair or replace the product within a reasonable time, or provide a full refund. If a remedy is not timely, if the failure is of a substantial nature or if the product is not fit for its stated purpose (or not fit for the purpose you specifically discussed with the salesperson), then you may be entitled to reject the product and require a full refund, replacement, or obtain damages in compensation from the vendor.
If a vendor does not agree with you, you may need to present your case at the Disputes Tribunal to enforce your rights under the Act.
While each case is decided on its particular facts, set out below are 2 noted examples: