Your rights

Find out what your rights are when you’re buying second-hand, from a private seller or an online retailer. This information comes from the Citizens Advice Bureau and is intended as general information only. 

Private sales

Private sales aren’t covered by the Consumer Guarantees Act or the Fair Trading Act so make sure you check out what you are buying - and from whom - before you commit. You have far less protection than if you are buying from a trader.

If you can get a receipt from the seller and record anything they tell you about the item, you may later be covered by the Contractual Remedies Act if it turns out you have been misled. There is more information about the Contractual Remedies Act on the Consumer Protection (Ministry of Business, Innovation and Employment) website.


How to protect yourself in a private sale 

Be suspicious of any deal that sounds too good to be true:

• Some people use Facebook pages to sell stolen goods, from hi-tech gear to weaponry. If the seller says it “needs to be gone”, there may be a dodgy reason behind it.

• For more expensive items (e.g. a car), check on the Personal Property Securities Register (PPSR) that the seller really owns it, and whether the goods are being used as security for a loan.

• If the deal’s a real “steal”, ask them why. Could the designer watch be a fake? Or, maybe the seller has no intention of sending you anything in return for your payment. 

• If possible, inspect the goods in person before you buy.

• Ask questions about the goods so you are clear on what to expect.

Look for feedback from other customers and consider using an escrow service (e.g. Safe Trader if buying through Trade Me, or SafeKiwi) where you pay the money to an independent third party who doesn’t release the money to the seller until you’ve received the goods.

If you're not using an escrow service, pay by credit card, internet banking (if to a New Zealand bank account), cheque or money order instead of cash or telegraphic transfer – so your payment can be tracked.

Make sure you get a receipt and the name and address of the seller, and record anything the seller has told you about the item. If anything goes wrong you can use this information to track down the seller and / or make a claim at the Disputes Tribunal.

If you’re unhappy with a private sale

It’s best to start by contacting the seller directly and telling them what the problem is. The two of you may be able to agree on a solution (e.g. you return the goods and they return your money).

If this doesn’t work, your next option is to make a claim to the Disputes Tribunal. If you believe the seller misrepresented the goods to you, you can make a claim under the Contractual Remedies Act. Alternatively, if the goods don’t match the description supplied by the seller, you can claim under the Sale of Goods Act.

Your rights when buying from an online retailer

If you buy from a New Zealand retailer you are protected by New Zealand consumer law just like an over the counter sale. The retailer is required to provide clear and easy to find information about their terms and conditions, and it's worth checking these to find out what to expect regarding returns, warranties and how long delivery might take.

Verbal agreements

Your agreement is a contract if something of value is to be exchanged and it meets the four main criteria for a legally binding contract, namely:

• Both parties intended to enter into the contract

• Both parties agree on what’s in the contract

• The contract is not to buy or sell something that is illegal

• Both parties to the contract must be “legally capable” (for example minors or people of unsound mind are not legally capable.

A contract doesn’t have to be written down; it can just be a verbal agreement. In the case of an agreement to buy a lawnmower then something of value is being exchanged (in this case money for a lawnmower) so it might be a contract.

One key factor in determining whether something is a contract is whether both sides intended it to be a legal relationship or not (i.e. they intended to enter a contract), which is one reason verbal contracts can be so hard to enforce (see our question below about enforcing a private contract).

A verbal contract which meets the above criteria is legally binding but it is best to have it in writing and signed by all parties involved, in case there is any dispute over it later.

Note that some types of agreements (e.g. about relationship property, to buy or sell real estate) have additional legal requirements. Also, contracts between a consumer and a trader (someone in the business of providing the relevant goods or services) are covered by consumer law.

What should be in a written contract?

The contract should state:

• who the parties to the contract are

• what goods or services will be sold or provided

• what the price is and how and when payment will be made

• when the goods will be delivered or the service started

For example if you have agreed to lend a family member a large sum of money, you might have a written loan agreement which states the names of the lender and borrower respectively, the amount of the loan, the date the loan starts, how much interest (if any) will be charged, when and how repayments will be made etc. You might also agree to some form of security.

It might also state under what conditions the contract can be cancelled (e.g. if both parties agree to it).

Depending on the value of what’s being exchanged under the contract, it might be a good idea to ask a lawyer to check the contract before it is signed, to ensure the terms are fair to both parties and legally enforceable.

Once it has been signed by both parties, each party should have a written copy to keep.

Drawing up a written contract

One option is to ask a lawyer to draw up a written contract, or you could draw up a contract yourself and get a lawyer to check it.

Another is to purchase and download a contract template from one of a number of online providers. Templates cost from around $20 to $60 or more, depending on the provider and the type of contract it is for. Providers include:

• Lawlive

• Legal documents New Zealand

• Netlawman

If you need a flat/house sharing agreement you can download a template from the Tenancy website for free. 


Enforcing a private contract

Contracts for goods or services between private individuals (as opposed to those between a consumer and someone in business) aren’t covered by consumer law. However you do have some options if the other party does not fulfil their obligations under to the contract.

Your first step might be to write a letter to the other person, outlining what they agreed to and asking them to fulfil their obligations, e.g. pay any money they owe, or provide the goods they promised.

Include a deadline which gives them a reasonable time in which to do this. You might also state what action you’ll take if they don’t. If you have a record of the agreement between you and the buyer, include a copy of it.

If they respond by disagreeing with what you are saying, then you can make a claim at the Disputes Tribunal to settle the dispute. Take along any evidence you have to support your case.

Where it’s not appropriate to apply to the Disputes Tribunal (e.g. because there is a debt which is not in dispute) you might consider taking legal action to recover the amount owed to you. Start by asking your lawyer to write them a letter, as this might be enough to motivate the buyer into settling their debt.

If a lawyer’s letter does not have this effect, the next step would be to apply to the District Court to sue the buyer for breach of contract. Going to court can be an expensive and time consuming option though, so think about it carefully before you proceed. You can read more about recovering debts on our debt recovery page. You can also read about your rights when buying or selling a privately, on the CAB’s Private sales page.