New Zealand Legislation: Acts

5 Guarantees as to title

• (1) Subject to section 41, the following guarantees apply where goods are supplied to a consumer:

  • (a) that the supplier has a right to sell the goods; and

  • (b) that the goods are free from any undisclosed security; and

  • (c) that the consumer has the right to undisturbed possession of the goods, except in so far as that right is varied pursuant to—

    • (i) a term of the agreement for supply in any case where that agreement is a hire purchase agreement within the meaning of the Income Tax Act 2007; or

    • (ii) a security, or a term of the agreement for supply, in respect of which the consumer has received—

      • (A) oral advice, acknowledged in writing by the consumer, as to the way in which the consumer's right to undisturbed possession of the goods could be affected, sufficient to enable a reasonable consumer to understand the general nature and effect of the variation; and

      • (B) a written copy of the agreement for supply or security, or a written copy of the part thereof which provides for the variation.

  (2) A reference in subsection (1)(a) to a right to sell goods means a right to dispose of the ownership of the goods to the consumer at the time when that ownership is to pass.

  (3) An undisclosed security referred to in this section means any security that was neither disclosed to the consumer in writing before he or she agreed to the supply nor created by or with the express consent of the consumer.

  (4) Nothing in subsection (1)(a) or (1)(b) shall apply in any case where the goods are only hired or leased.

  (5) Where the goods are only hired or leased, the guarantee set out in subsection (1)(c) shall confer a right to undisturbed possession of the goods only for the period of the hire or lease.

  (6) Part 2 gives the consumer a right of redress against the supplier where the goods fail to comply with any guarantee in this section.

  Compare: 1908 No 168 s 14; 1971 No 147 s 11

  Section 5(1)(c)(i): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).