It has been said that shoppers vote with their feet and this statement proves true in most situations. When a shopper has a bad experience the end result quite often is a decision not to support the retailer or service provider again, to write a letter of complaint, and to tell their story to a willing audience.

... an open-heart surgeon's duty included a duty to inform a patient of all relevant risks ... This required the surgeon to inform the patient of the known risk of blood clots forming on the mechanical valve.

Most business owners are acutely aware of the damage an unhappy customer can do to their reputation and will try to remedy the situation.

However, when the problem is not fixed it is likely that both the consumer and business owner will turn to the Consumer Guarantees Act.

The Act is designed to provide consumers with service and product guarantees and suppliers of such services and products with the legal standard by which their service or product will be measured.

The remedies under the Act are in addition to those available under the law of negligence and breach of contract. Whenever services are supplied to a consumer the Act provides a guarantee that the service will be carried out with reasonable care and skill. What does this mean?

When the courts apply this guarantee the test used is the standard of care and skill an ordinary supplier of that kind of service would apply. In other words, how the service measures up to that which a customer may reasonably expect from others providing the same service.

When a special skill is involved, the supplier is likely to be judged against someone having that special skill. For instance, a medical service provider's duty of care and skill may include having to inform a consumer of all potential risks involved with their service.

The courts have said that an open-heart surgeon's duty of reasonable care and skill included a duty to inform a patient of all relevant risks attached to surgery, prior to patient consent.

Nature of the service

This required the surgeon to inform the patient of the known risk of blood clots forming on the mechanical valve.

The obligation to the consumer under the reasonable care and skill guarantee is related to the nature of the service to be supplied and a supplier can limit their liability under this guarantee by careful definition of the service to be provided.

The Act provides a further guarantee that services, and any products resulting from them, must be fit for the particular purpose that the consumer makes known to the supplier as being the purpose for which those services are required.

The supplier guarantees that the service, and every product resulting from the service, will be of a nature and quality that can reasonably be expected to achieve the result that the consumer specifically desires.

The only exceptions are where it is apparent from the circumstances that the consumer does not rely on the supplier's skill or judgment or that it would be unreasonable to do so.

As with the guarantee of reasonable care and skill, the supplier can minimise liability to the consumer by carefully defining the parameters of the service to be supplied before the time of making the contract of supply. In practical terms this means fully informing the consumer of the likely outcomes before the decision to buy is made.

If the consumer's purpose is common or familiar, being the end result one would ordinarily expect from the service then there may be no need for express notification to the supplier of the consumer's expectation.

A duty to refuse

The service supplier may in some circumstances have a duty to refuse to perform a service according to a customer's specifications or requirements if the service or the product of the service would otherwise breach safety regulations or other statutes.

The Act sets out the remedies available to a consumer where a breach occurs of the guarantees that services will be supplied with reasonable care and skill, will be fit for a particular purpose, and will be completed within a reasonable time.

If the failure can be remedied, the supplier may be required to remedy it within a reasonable time.

If the failure cannot be remedied, or it is of a substantial character, the consumer may cancel the contract, and may obtain damages from the supplier as compensation for any reduction in value of the product of a service below the charge paid or payable by the consumer for the service.

Whether or not the failure can be remedied, the consumer may also obtain damages from the supplier for any reasonably foreseeable loss or damage resulting from the failure.
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This e-mail address is being protected from spambots. You need JavaScript enabled to view it is a commercial lawyer with Rodgers-Law in Dunedin and advises small and medium sized businesses on all aspects of commercial law.

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