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Fair Trading Act 1986

Consumer transactions and auctions - Layby sales

36I: Bankruptcy, receivership, liquidation, or voluntary administration of supplier: completion of layby sale agreement

You could also call this:

“What happens to your layby purchase if the shop goes broke?”

If you’re buying something through a layby sale agreement and the seller goes bankrupt, gets a receiver, goes into liquidation, or enters voluntary administration, this law protects you.

If the goods you’re buying are part of the assets affected by the seller’s financial troubles, you can still complete your purchase. You need to pay the remaining balance, if any, within a reasonable time. Then you can finish the agreement, own the goods, and take them home.

But if there aren’t enough goods for everyone who has a layby agreement, the sales will be completed in the order they were made. This means if you made your agreement earlier, you have a better chance of getting your items.

If you haven’t made any payments in the last three months before the seller’s financial troubles, you can’t use these rights.

If you make a payment after the seller’s financial troubles start, you can get that payment back in full. But if you complete your purchase as described earlier, you can’t get a refund for that payment.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6156630.

Topics:
Money and consumer rights > Consumer protection
Business > Fair trading
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36H: Effect of cancellation of layby sale agreement, or

“What happens when you end a layby agreement”

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36J: Bankruptcy, receivership, or liquidation of supplier: consumer priority, or

“What happens if a store goes out of business before you finish paying for something?”

Part 4A Consumer transactions and auctions
Layby sales

36IBankruptcy, receivership, liquidation, or voluntary administration of supplier: completion of layby sale agreement

  1. This section applies if—

  2. a supplier of goods under a layby sale agreement—
    1. is adjudicated bankrupt; or
      1. has a receiver or statutory manager or similar person appointed in respect of it or of all or any of its assets; or
        1. is put into liquidation; or
          1. is in voluntary administration under Part 15A of the Companies Act 1993; and
          2. the goods to which the agreement relates are part of the assets in the bankruptcy, receivership, liquidation, or administration, as the case may be.

            1. If this section applies, the consumer acquiring the goods is entitled, on payment of the balance (if any) of the price specified in the agreement and within a reasonable time, to—

            2. complete the agreement; and
              1. have property in the goods to which the agreement relates transferred to him or her; and
                1. take possession of those goods.

                  1. However, if there are insufficient goods to enable all consumers to complete their agreements in accordance with subsection (2), the agreements must be completed in the same order as they were entered into.

                  2. Subsections (2) and (3) do not apply to a consumer who has, in breach of the agreement, made no payments to the supplier during the 3 months immediately before the relevant event described in subsection (1)(a).

                  3. If a consumer makes a payment under the agreement after an event described in subsection (1), the consumer is entitled to have that payment refunded in full.

                  4. To avoid doubt, subsection (5) does not apply if the agreement is completed in accordance with subsection (2) or (3).

                  Notes
                  • Section 36I: inserted, on , by section 23 of the Fair Trading Amendment Act 2013 (2013 No 143).