The Supreme Court of Appeal upheld the validity of extended warranties in respect of goods sold on credit under the National Credit Act 2005 despite the fact that the warranties were filled in incompletely or inaccurately.
The evidence was that, despite the inaccuracies, the extended warranties were correctly applied and gave extended warranty cover for two years beyond the initial twelve month supplier’s warranty.
A written document constitutes evidence of the contract concluded. If a dispute arises between the parties relating to the terms of the written document, either party can rectify the document to reflect the true agreement, which is not a variation of the contract. The disputed documents were, despite the errors, warranties allowed by section 102(1)(b) of the National Credit Act.
The court rejected the contention of the National Credit Regulator that in the circumstances the extended warranties contained unlawful terms for the purposes of the NCA or that there was a breach of section 93 of the NCA requiring the credit provider to deliver to the consumer a copy of the document recording their credit agreement. Even where there was an unlawful term, section 90(2) entitles the court to alter the offending provision so as to render it lawful, provided it is reasonable to do so. In view of the evidence in this case that the warranties were effective it would clearly be reasonable to amend the extended warranties to reflect what was actually provided to the consumers.
This law applies to any agreement where there are no specific statutory requirements as to what has to be in the agreement to make it valid.