Goods Must be of Acceptable Quality

Where a person supplies goods to a consumer in the course of business, there is an implied condition that the goods supplied are of acceptable quality Section 54.

This means that the goods must be as;

(a) Fit for all the purposes for which goods of that kind are commonly supplied; and
(b) Acceptable in appearance and finish; and
(c) Free from defects; and
(d) Safe; and
(e) Durable;

As a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the following:

(a) The nature of the goods; and
(b) The price of the goods (if relevant); and
(c) Any statements made about the goods on any packaging or label on the goods; and
(d) Any representation made about the goods by the supplier or manufacturer of the goods; and
(e) Any other relevant circumstances relating to the supply of the goods.

These criteria provide a flexible test that caters for different circumstances.

Second-hand goods, for example, cannot be expected to be in the same condition as one would expect for brand new goods.

One question to ask is whether a reasonable person who wanted goods of that type would be prepared to accept the goods in that condition.

It will not always be sufficient that the goods are fit to perform the purpose for which goods of that sort are normally used.

For instance, if a consumer purchases a new car and the car arrives with scratched paintwork, then a reasonable person would not accept the car.

The car is therefore not of acceptable quality, even though it is fit for the purpose for which cars are used.

The guarantee of acceptable quality will not apply in the following situations:

• Where defects in the goods have specifically been drawn to the consumer’s attention before a contract is made; or
• If the consumer examined the goods before the contract was made, and a reasonable examination ought to reveal that they were not of acceptable quality; or
• The goods were bought at auction.

Goods must be fit for a particular purpose (unfit for purpose issues)

Under Section 55 of the ACL goods need to be fit for any disclosed purpose.

Obviously, people can not just buy items for purposes they’re not supposed to be used for and then return them saying they don’t work.

However, if an item is advertised as being capable of fulfilling a certain use and it does not, the ACL provides the consumer with a course for legal action.

Usually this takes the form of a refund, or a return.

In some circumstances an item may not be advertised as being fit for a particular purpose but the expert advice of seller can mean this area of law is brought into play.

One example of this is were someone goes to a specialist equipment store and asks for advice from a shop attendant about which products are suitable for a particular purpose.

In this scenario the seller is made aware by the consumer of the purpose for which goods are required.

By providing advice the store-person, or the seller, has represented that the goods are reasonably fit for a particular purpose.

This applies whether or not the goods are commonly supplied for that purpose.

This guarantee does not apply where the consumer has not relied on the skill and judgment of the person selling the goods or where it would be unreasonable to do so.

Nor does it apply if the goods are bought at auction.

For people purchasing goods from a seller in the course of the seller’s business, the purchaser must show that:

• The particular purpose for which the goods are required was made known to the supplier, either expressly or by implication, or the supplier volunteered that the goods were suitable for a particular purpose; and
• The purpose was made known to the supplier in such a way as to show that the supplier’s skill and judgment was relied upon.

Although at first sight these requirements appear rather onerous, the courts have taken a liberal approach which is favourable to consumers. In the case of goods which only have one particular purpose, requirement (1) will be satisfied by merely placing an order for the goods.

In consumer cases, requirement (2) will be satisfied, for example, by the fact that the consumer went into the supplier’s shop. In effect the consumer is said to rely on the seller’s skill in selecting the goods.