Buying Defective Goods (Script 257)

From Clicklaw Wikibooks

This script discusses what you can do if you’ve bought a product or items (called “goods”) that are defective.

When you buy and receive goods, you are making a contract

Your contract is with the person or company who provides the goods. (If a person is an employee of a company, your contract is with the company only.) Your rights and obligations depend on BC law and the terms of the contract. A contract does not need to be in writing. It can be a verbal contract.

The terms of a contract can be express or implied

  • An express term is one that you and the seller agreed on—either verbally or in writing, or both. A term is binding only if you have a contract. If the seller doesn’t give you what you agreed on, then you have certain rights to get the goods you agreed on, or to get your money back.
  • An implied term is one that the law says is part of a contract, even though you and the seller haven’t discussed it or agreed to it.

Express terms are best

To avoid misunderstandings and arguments, it’s best to have express terms, not implied terms. Implied terms are broad, and different people can interpret them to mean different things. Also, include in the contract what will happen if the seller doesn’t live up to the contract.

Guarantees and warranties are common express terms

Look carefully at guarantees and warranties in your purchase contract. Guarantees and warranties are often so vague, or buried in so many qualifications, that they may not be of any value to you. Often, you must follow certain operating or cleaning instructions for a guarantee or warranty to be valid. For example, if you buy a car, the warranty may require you to get the car regularly serviced at an authorized dealer. And some goods are sold for certain purposes or uses only. Using the goods for other purposes will cancel the warranty. If the seller makes any promises or guarantees, get them in writing—before you sign the contract—and make sure you understand any limits on them.

Implied warranty of habitability for housing

There is an implied warranty that a building bought to live in will be habitable. That means it will be free of latent defects, built in a good and workmanlike manner, built with suitable materials, and fit to live in. Examples of defects that would make a building hard to live in and breach the warranty include a plumbing problem that floods a house, or a roof that leaks and causes water damage.

This warranty applies only to buildings that were not complete when bought. It does not last indefinitely. Courts have suggested it will apply for at least a couple of years after the building is completed. The buyer and seller can contract out of this implied warranty, but they must be clear and specific to do that. A broad exclusion clause is not good enough.

If there’s a breach of this warranty, the buyer will be entitled to get back any money they paid to repair defects and make the home habitable.

Four implied terms when you buy new goods

In BC, the Sale of Goods Act (sections 17 to 19) requires four implied terms, called “conditions,” to be in some contracts for the purchase and sale of new items. The goods must:

  1. match the description or the sample.
  2. be reasonably fit for your purpose for them.
  3. be of merchantable quality.
  4. last for a reasonable time.

If the seller breaks the condition or doesn’t carry out a condition of the contract, then you (the buyer) can reject or return the goods and cancel the contract. You are entitled to get back the money you paid, plus payment for any extra expenses the defective goods caused.

1. The goods must match the description or sample

If the seller showed you a sample of the goods, there’s an implied condition that the goods will match their description or match the sample. An example of goods sold by sample is carpeting. If the carpet delivered to you isn’t the same as the sample in the showroom, you don’t have to accept it. Similarly, if the goods are sold by description, there’s an implied condition that the goods will match the description. Catalogue sales are a good example of a sale by description. If you ordered something from a catalogue, you can send it back if it isn’t the same as the description.

2. The goods must be reasonably fit for your purpose for them

The goods must be reasonably fit for the buyer’s purpose. But there are two catches to this condition:

  • First, this condition applies only if it’s the seller’s business to sell things, and the goods are things they usually sell. So a private sale between two people isn’t covered, or if your hairdresser orders you a computer, that also isn’t covered.
  • Second, this condition applies only if you told the seller how you planned to use the goods and explained that you were relying on their skill and judgment. For example, if you go to a hardware store and tell the salesperson you want a saw to cut metal pipes, and they sell you a saw that cuts only light wood, the saw isn’t reasonably fit for the purpose you bought it for. But if you just picked up the saw yourself (thinking it should work for metal pipes) and took it home without any discussion, you wouldn’t have the right to cancel the contract, because you didn’t explain to the seller why you needed the saw. Also, if the seller gave you notice of the intended use (for example, a label says, “this is a saw for cutting wood only”) and you used it differently, for cutting metal, then you couldn’t rely on this condition to get your money back.

3. The goods must be of merchantable quality

The product cannot have any defects if you buy it by description from someone who sells that type of goods. So, it applies to catalogue sales and most mail order sales. But it wouldn’t apply if you bought something privately through an online ad, for example. It also wouldn’t apply if you examined the goods first and had a chance to discover any defects before buying.

4. The goods must last for a reasonable time

This implied condition applies only if you use the product as intended. It doesn’t apply if you use the goods for something they weren’t made for. For example, you can’t say that an ordinary vacuum cleaner designed for household dust hasn’t lasted for a reasonable time if it breaks down as you use it for heavy construction debris.

What can you do if the goods you bought are defective?

Immediately return the defective goods to the seller. Ask the seller to replace them. If a replacement isn’t available, ask for a refund. If the product isn’t suitable for its use, then ask for a refund. Don’t keep using the defective product until you return it or after you demand a refund or exchange. If you keep using it, you could (and probably will) lose the right to return it.

What if you can’t return the goods?

Tell the seller in writing that you’re rejecting and returning the defective goods. Act fast. If the seller won’t give you a replacement or refund, leave the defective goods with the seller, and get a dated receipt for them. Then make your complaint to the store’s customer complaint department. If you still don’t get a solution, complain to the president of the company and tell the company in writing that you will sue. To do that, you can see a lawyer for legal advice.

Suing

You can consider suing for defective goods if you can’t get a refund. If your claim is for $5,000 or less, you can go to the Civil Resolution Tribunal. If your claim is between $5,001 and $35,000, you can sue in small claims court. Scripts 165 to 169 have more on suing in small claims court.

To sue for more than $35,000, you must go to BC supreme court. There are fast track options in BC supreme court: a summary trial under supreme court rule 9-6 and fast track litigation under rule 15-1. But you should get legal advice before suing in supreme court.

Research your purchase

Your best protection as a consumer is to be well informed. If a seller makes promises or guarantees that you’re relying on, get those promises and guarantees in writing and make sure you understand them.

More information

  • Contact the Better Business Bureau. They may suggest mediation or arbitration as informal ways to resolve your dispute. You and the seller must both agree to this. With mediation, a third-party mediator helps both sides reach a solution. With arbitration, an arbitrator hears both sides of the story and then makes a decision that is legally binding. The phone number for the Better Business Bureau for mainland BC is 604.682.2711. The Vancouver Island Better Business Bureau is at 250.386.6348.
  • If the goods you bought aren’t defective, but they don’t live up to the glowing promises made by the seller, check Script 260 on “Dishonest Business Practices and Schemes”.


[updated October 2017]

The above was last reviewed for accuracy by Mona Muker and Dean Davison, and edited by John Blois.



© Copyright 2017, Canadian Bar Association British Columbia Branch. Dial-A-Law is a registered trademark owned by Canadian Bar Association British Columbia Branch, a non-profit membership corporation.


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