Every New Zealand tradie has faced it: a customer calls back weeks after the job, unhappy with the finish, demanding a free redo — or threatening to "go to Consumer Affairs." Knowing your rights (and theirs) under the Consumer Guarantees Act 1993 and the Fair Trading Act 1986 is essential. Get it wrong and you face fines, forced remediation work, or a Disputes Tribunal order — sometimes years after the job is done.
This guide breaks down both laws in plain language, explains what you are — and aren't — legally required to fix, and shows you how to structure your quotes and contracts to protect yourself.
What Is the Consumer Guarantees Act?
The Consumer Guarantees Act 1993 (CGA) applies when you do work for a consumer — broadly, a person who hires you for personal, domestic, or household purposes. That covers most residential work: renovating a kitchen, building a deck, fixing a hot water cylinder, painting a lounge.
The CGA does not apply to commercial contracts — for example, a landlord hiring you to maintain a rental property as part of their business, or a company having their office refitted. In those cases the contract terms govern, and you have far more flexibility to limit your liability.
Under the CGA, your services must be:
- Carried out with reasonable care and skill — the standard a competent tradesperson in your field would meet
- Fit for the purpose — if the customer told you what they needed the work for, it must achieve that
- Completed within a reasonable time — if no specific timeframe was agreed
- Priced at a reasonable amount — if no price was agreed upfront
These are automatic guarantees. They cannot be contracted out of for residential consumers — even if your contract includes a clause trying to limit them, that clause has no legal effect.
What Happens If Work Doesn't Meet the Guarantee?
If your work doesn't meet the CGA's guarantees, the customer is entitled to a remedy — but the type of remedy depends on the severity of the failure.
For a minor failure: the customer must give you the opportunity to fix the problem first. You have the right to remedy before they can go elsewhere and send you the bill. A customer who hires another tradie to fix a minor defect without contacting you first generally cannot recover those costs.
For a major failure — work that can't be fixed, was done so badly a reasonable person wouldn't have agreed to it, or doesn't substantially achieve its intended purpose — the customer can: - Cancel the contract and get a refund (less an amount for the value already received), or - Keep the contract and claim compensation for the reduction in value
If you refuse to fix a legitimate minor problem, the customer can have it fixed by someone else and recover the reasonable cost from you. The Commerce Commission — the government agency that enforces consumer law in New Zealand — takes complaints about tradespeople seriously, particularly where businesses repeatedly refuse to honour remediation obligations.
Fair Trading Act: Don't Make Claims You Can't Back Up
The Fair Trading Act 1986 (FTA) prohibits misleading and deceptive conduct in trade. For tradies, the most common breaches are:
- Claiming skills or qualifications you don't hold — for example, representing yourself as a licensed building practitioner (LBP) or registered electrician when you're not
- Low-balling quotes to win work — giving a quote you know is materially lower than the likely final cost is deceptive conduct under the FTA, not just bad practice
- Advertising prices that exclude GST — GST must be included in advertised prices or clearly disclosed separately; burying a "+GST" in fine print does not satisfy the requirement
- Making promises about timeframes you have no intention of meeting — "I'll have it done by Friday" said to close a deal, when your schedule means it'll be three weeks, is an FTA risk
MBIE enforces the FTA and can issue infringement notices of up to $30,000 per breach for businesses. The Commerce Commission can take civil proceedings with penalties up to $600,000 for companies and $200,000 for individuals. These are not just theoretical — the Commission actively investigates tradie sector complaints, particularly in Auckland and Wellington where volumes are highest.
How to Protect Yourself: Quotes and Contracts
The best defence against a consumer law dispute is a clear, written quote or contract. Before you start work:
1. Specify the scope precisely. A vague scope ("renovate bathroom") is an invitation for disputes. List what's included and what isn't — tile supply, removal of existing fittings, compliance certificates, painting, making good around new fixtures.
2. Price clearly, including GST. If you're GST-registered, your quote must show the GST-inclusive price, or clearly state it's GST-exclusive with the GST amount shown separately. Our GST calculator can help you break it down correctly on every quote.
3. Reference the standard you're working to. Citing NZ Standards, the Building Code, or manufacturer installation guidelines in your quote makes it far easier to demonstrate reasonable care and skill if a dispute arises later.
4. Include a defects liability period. Specifying "we will return to fix defects notified within 90 days of completion at no charge" is professional practice and sets a clear boundary — after 90 days, a call-back is a new job. Without a defined period, the CGA's "reasonable time" standard applies indefinitely for latent defects.
5. State when the CGA doesn't apply. For genuine commercial contracts, you can include a clause limiting your liability. Get legal advice if you're unsure — a standard tradie contract template from a NZ solicitor typically costs $300–$500 and is worth every cent.
See our guide to writing quotes that win jobs and our NZ tradie contract guide for practical templates and clause examples.
Disputes: What Actually Happens
Most tradie-customer disputes in NZ end up at one of two places:
Disputes Tribunal (formerly the Small Claims Tribunal): handles claims up to $30,000. Filing costs $45–$180 depending on the amount claimed. No lawyers are permitted, so it's genuinely accessible to both parties. Decisions are binding and enforceable. Customers can — and do — file against tradies for remediation costs, refunds, or consequential losses like alternative accommodation during a delayed project.
District Court: for larger or more complex matters, typically where amounts exceed $30,000 or where legal questions are involved.
The Disputes Tribunal is increasingly active in the tradie sector, particularly for bathroom and kitchen renovations, roof repairs, and landscaping jobs where expectations weren't clearly set. Most cases come down to three questions: Was the scope clear? Was the standard of work reasonable? Did the tradie get a genuine opportunity to fix the problem?
If a customer files against you, your quote, written communications, and timestamped photos of completed work are your evidence. Managing jobs through an app like Fastcrew means every job note, client message, and site photo is logged and searchable — invaluable if a dispute surfaces two years after the job is done.
Key Numbers to Know
| Item | Amount |
|---|---|
| FTA infringement notice (business) | Up to $30,000 per breach |
| FTA civil penalty (company) | Up to $600,000 |
| FTA civil penalty (individual) | Up to $200,000 |
| Disputes Tribunal filing fee | $45–$180 |
| Disputes Tribunal maximum claim | $30,000 |
| Standard defects liability period (industry norm) | 90 days |
The IRD Connection: Pricing Transparency
There is a practical link between consumer law compliance and your IRD obligations. MBIE and IRD both focus on cash transactions in the trades sector. Quoting one price verbally (cash, no invoice) and another in writing raises FTA issues as well as tax compliance concerns. A transparent pricing practice — written quotes, GST clearly shown, invoices issued for all work — satisfies both regulators at once. IRD's myIR portal makes it straightforward to issue compliant GST invoices from your phone on-site.
Download Our Free Templates
Download our free NZ tradie templates at tradietools.nz/templates/ — including a consumer vs commercial contract checklist, defects liability clause wording, and a quote template that meets FTA disclosure requirements.
NZ Tradie Tools provides free calculators, templates and guides for New Zealand tradies. Visit tradietools.nz.