Question

You are working with Redwood and Associates. You represent Laura Smith who comes to your office for a consultation. Ms. Smith purchased a dishwasher from Scam Appliance Company. After the dishwasher was delivered and as it was being uncarted, Ms. Smith discovered that the dishwasher was scratched on the front.

In preparation for the meeting with Ms. Smith, your supervising attorney has asked you to conduct legal research on self-help as a dispute resolution process.

Your memorandum should address the following:

Discuss whether Ms. Smith had a statutory right to reject the delivery of the dishwasher. You are to include the applicable code you found when you conduct your research.

Explain Ms. Smith’s options if she rejects the dishwasher; discuss what she should do after she rejects it.

Discuss what Ms. Smith’s next step would be if she accepted the delivery.

Answer 1

Problems and faults with items you buy can be major or minor and there are different issues for particular products. A major fault is one where the item does not work as it is supposed to. For example, a new washing machine that fills up with water but doesn’t spin or empty, or a new toaster that doesn’t heat up, would be major faults in these items.

Generally speaking, if there is a fault with the appearance or finish of an item, or if the item has been scratched, this is a minor fault, since the item will still work and do what it is supposed to do.

Like in our case Mrs Smith dishwasher had a minor scratch which does not affect the working of dishwasher.

Remember:

You have no rights under consumer protection law if you change your mind about the goods you have purchased. However, some shops may offer you an exchange as a gesture of goodwillThe shop is entitled to request proof of purchase, but this doesn’t necessarily have to be the shop receipt. You could show your credit or debit card statement if you used one or any other documentation that proves it was purchased in that particular shop or retail chain. Read more on receipts.

When you buy something, no matter how big or small it is, you enter into a contract/legal agreement with the seller. Your rights don’t change just because you bought the item in a sale. But you don’t have a right to return something if the fault with it was pointed out to you before you bought it. If you have a complaint about faulty items, shop notices such as “No Refunds” or “No Exchanges” do not limit your rights. Some shops display these notices, particularly during the sales, but this does not take away your rights under consumer protection law if the goods are faulty.

As the consumer, you are the person responsible for noticing if there is a problem or fault with something you have bought, and you must act quickly to tell the seller that you have found this problem.

If you received the item as a gift, you will need to have a proof of purchase if you need to return it to the seller for any reason. This can take the form of a gift receipt, which you may need to request from the person who bought the item.

REMEDIES

The solution to the problem can depend on a number of things.

Have you examined the item and are happy that it is what you agreed to buy?Have you ‘accepted’ the item?Did you agree that the product is what you want and have used it without any issues for a period of time?Is the problem with the item major or minor?

If you bought an item that has a fault, either major or minor, you have different rights depending on different things. Your contract is with the retailer or supplier who sold you the product so if there is a fault, it is up to them to fix it. In all cases you should act quickly. We have given a few examples below of the most common problems callers to the Competition and Consumer Protection Commission have.

Reject item – Full refund

If you agreed to buy something and it simply does not work from the outset, then you are entitled to reject the goods and get a refund from the seller. Examples include a new washing machine which fills with water but does not spin or drain, or a new TV set which the audio doesn’t work on. In both of these examples, the consumer has discovered a major problem/fault with the item as soon as they go to use it for the first time. In the shop they agreed to buy it, but clearly there is something wrong with the one they were given. The consumer has not “accepted” the item – they brought the item home but it does not do what it said it would and the consumer had the right to reject it. They can return it to the shop and demand a full refund. This will terminate the contract they had for the item with the seller.

Repair

If you start using the item for some time then it is deemed that you have accepted the item. But if you discover a fault then you are entitled to have the item repaired or replaced free of charge – provided you did not cause the damage. If the fault occurs within the first 6 months of owning the item, it is accepted that the fault was there when you bought it. In general, the seller can offer to repair the item first. This should be a permanent repair and the problem should not reoccur. If the same fault occurs again, then you should be entitled to a replacement or refund. If you are not happy with the retailer’s offer to repair the item, you can say no – but if you do this, you may have to use the Small Claims process if you want to take the matter further.

Remember, the retailer may charge you for the repair if you have been responsible for the damage to the product.

Mrs Smith can follow this if she rejects the product.

Replacement

If it is impossible to repair the item, or if it is more convenient than repairing it, then the seller may replace it for you. For example, if you bought a laptop and it overheated, causing significant damage to itself, it may be very difficult or even impossible for the seller to have the laptop fixed for you, so they may offer to replace it instead. If you opt for a replacement, it should be the same as the item you bought, or of similar quality and price. You should not have to pay extra for a replacement and should be given the difference in price if the replacement costs less than the item you originally bought.
Mrs Smith can follow this if she accepted the product.

Price reduction

If the item has been repaired or replaced and it is still not doing what it is supposed to do correctly, you could look to have a reduction in the price you paid for it, if you are happy to put up with it. For example, if you bought a bicycle with 21 gears which develops a fault and needs to be repaired. After the repair you are told that the bike now only has 18 working gears. You may still be happy to keep it with 18 working gears but you could look for a reduction in the price you paid for it.