Buying from private sellers

When a deal with another private individual turns sour, you have to rely on laws other than the Consumer Guarantees Act (CGA) to see you right.

Misrepresented goods

If a seller claims a product is in "top working order" but you're sold a dog, the Contractual Remedies Act (CRA) may help. This Act says that if the seller misrepresents the product and you're persuaded to buy it because of that misrepresentation, you can claim damages. If the misrepresentation leaves you seriously out of pocket, you have the right to cancel the deal.

Case study: the $11,000 campervan
A Toyota HiAce campervan was listed on Trade Me as "in perfect mechanical condition". The van sold for $11,000 but the buyer subsequently discovered it had an illegal warrant of fitness, uncertified modifications and needed $16,000 of repairs. The Disputes Tribunal held the seller had misrepresented the van's condition and the buyer was entitled to cancel the contract. The seller was ordered to repay the $11,000 and collect the van at his own expense.

Degree of influence

To succeed in a claim under the CRA, you have to do more than just prove the seller misrepresented the product. You also have to show the misrepresentation influenced you to make the purchase. The misrepresentation doesn't have to be the only factor you relied on – but it does have to be a significant one.

Case study: the $1500 car
A 1990 Honda CRX sold on Trade Me for $1500. The car subsequently failed to get a warrant and the buyer wanted to cancel the contract. Although the Disputes Tribunal found it was "more probable than not" that the seller had misrepresented the vehicle's condition, the buyer wasn't entitled to cancel. He had viewed the car on two separate occasions before buying and knew the vehicle had failed its last WOF inspection. As a result, the tribunal wasn't persuaded the seller's claims had induced the buyer to purchase and his case failed.

Repairs

The CRA also allows you to claim for damages if you've forked out for repairs on your auction purchase. But there are limits. The law says you have a duty to minimise your losses – so your claim's not likely to succeed if you've continued to repair some item with major faults.

Case study: the $6100 boat
The buyer of a second-hand boat went to the Disputes Tribunal claiming $7200 in repair costs. He'd paid $6100 for the boat, listed on Trade Me as in "excellent condition". The engine failed soon after the boat was delivered and required a series of major repairs. The tribunal was only prepared to award the buyer $1150 to cover the costs of the initial repairs. It held the buyer shouldn't have proceeded with the subsequent repairs when the costs became apparent.

Description errors

The Sale of Goods Act may also provide some comeback if you've bought a product that doesn't match its description. The Act says where goods are "sold by description" then they must correspond with that description. If they don't, you can reject them. "Description" usually means a statement about the kind or class of the good, rather than its condition or quality.

Case study: the $5500 motorbikes
Two Triumph motorbikes were sold on Trade Me for $5150. The buyer later discovered some of the parts were from a different make of bike (a Yamaha) and other parts were missing. The tribunal held the bikes didn't correspond with the description of a Triumph motorbike and ordered the seller to repay the $5150. The buyer was required to return the bikes once payment had been made.

Getting compensation

The Sale of Goods Act also gives you the right to keep the goods but claim damages for any financial loss resulting from the inaccurate description. The hitch is sellers can contract out of the Act – and if they do, these rights won't apply.