Guide · Buying things · 5 min read
Faulty goods
What the law implies about the goods you buy, and what you can claim when they fall short.
In plain English · by bruneilaws · not legal advice· Law as at 30 Sep 2026
On this page · 8 parts
The short answer
When a seller sells goods in the course of a business, there is an implied condition that the goods are of merchantable quality. There is no such condition for defects specifically drawn to your attention before the contract is made, or, if you examined the goods before the contract, for defects that examination ought to have revealed.
If the seller breaks a warranty, or you treat a breach of condition as a breach of warranty, you can set the breach against the price to reduce or cancel it, or sue the seller for damages.
Goods that are not up to standard
Goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect, having regard to any description applied to them, the price if relevant, and all the other relevant circumstances.
The quality of goods includes their state or condition.
Goods bought for a particular purpose
When a seller sells goods in the course of a business and you make known to the seller, expressly or by implication, a particular purpose for which you are buying the goods, there is an implied condition that the goods are reasonably fit for that purpose, whether or not it is a purpose for which such goods are commonly supplied.
That condition does not apply where the circumstances show that you did not rely on the seller's skill or judgment, or that it was unreasonable for you to rely on it.
Goods that do not match their description
In a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description.
A sale is not prevented from being a sale by description only because the goods were exposed for sale and you selected them yourself.
Rejecting the goods or claiming damages
Whether a term of a contract of sale is a condition, whose breach may give a right to treat the contract as repudiated, or a warranty, whose breach may give a claim for damages but no right to reject the goods, depends in each case on the construction of the contract. A term may be a condition even though the contract calls it a warranty.
Where the contract is not severable and you have accepted the goods or part of them, a breach of a condition by the seller can only be treated as a breach of warranty, not as a ground for rejecting the goods, unless an express or implied term of the contract says otherwise.
If goods are delivered to you and you have not examined them before, you are not taken to have accepted them until you have had a reasonable opportunity to examine them to see whether they conform with the contract.
Unless otherwise agreed, when the seller tenders delivery, the seller has to give you, on request, a reasonable opportunity to examine the goods for that purpose.
How damages are measured
Damages for a breach of warranty are the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach.
For a breach of a warranty of quality, that loss is, at first sight, the difference between the value of the goods when they were delivered to you and the value they would have had if they had met the warranty.
Setting the breach against the price does not stop you from also suing for the same breach if you have suffered further damage.
Nothing in the Act affects your right to recover money you paid where the consideration for the payment has failed.
When the contract says otherwise
Subject to any other law to the contrary, a right, duty or liability that the law implies into a contract of sale can be negatived or varied by express agreement, by the course of dealing between the parties, or by usage that binds both of them.
An express condition or warranty does not negative a condition or warranty the Act implies unless it is inconsistent with it.
Taking it to a small claims tribunal
Subject to the Small Claims Tribunals Act, a small claims tribunal can hear a claim about a dispute arising from a contract for the sale of goods or the provision of services.
Small Claims Tribunals Act s 5(1)
Except where the Act expressly provides otherwise, a tribunal cannot hear a claim for more than the prescribed limit, or a claim brought after one year from the date the cause of action accrued.
Small Claims Tribunals Act s 5(3)
A tribunal can order a party to pay money to another party, or make a work order against a party.
Small Claims Tribunals Act s 38(1)
A work order is an order to fix a defect in goods, or to make good a shortfall in the performance of services, by doing the work it specifies, which can include replacing goods or parts of them.
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