Legal Updates

Consumer Rights – The New Law

Written by David Marchese
03/09/2015

The Consumer Rights Act 2015 (“CRA”), which comes into full force on 1st October 2015, revises and restates UK law relating to the sale and supply of goods and the supply of services to consumers, and for the first time provides separate rules relating to the supply of digital content to consumers.

The CRA also updates the investigatory powers that the regulators, who are the enforcers of consumer law in the UK, have at their disposal, and contains special provisions about letting agents, and secondary ticketing.

The effect of the CRA is such that all traders dealing with consumers will be well advised to review their terms of business, contract forms, and procedures, to ensure they comply with the new law.

Goods

For goods (whether sold, hired, supplied on hire purchase, or otherwise transferred), the CRA sets out the following rights of the consumer, where the goods do not conform to the contract:

  • a new 30 day “short-term right to reject
  • a right to repair or replacement
  • a right to a price reduction, and
  • a “final right to reject” the goods.

If the goods are found not to conform to the contract at any time within 6 months from the day of delivery, they will be taken not to have conformed to it on that day, unless the trader can show otherwise.

In addition, unless there is an agreed time or period for delivery, the trader must deliver the goods without undue delay, and in any event within 30 days from the day when the contract is made.

Digital content

The CRA sets out, for the first time, rules for the supply of digital content to consumers, whether on a physical medium (such as a CD) or supplied online (including apps).

Contracts for the supply of digital content to consumers are treated as including terms that the digital content:

  • is of satisfactory quality
  • is reasonably fit for any particular purpose made known by the consumer to the trader
  • will match any description given for it by the trader
  • complies with any information given by the trader pursuant to the Consumer Contracts Regulations (for which see below), including information about the main characteristics, functionality and compatibility of the digital content

Where the digital content is accessed by means of any facility initiated by the trader, it must be made available for a reasonable time, unless a time is specified in the contract.

If the digital content does not conform to the contract, the consumer will have a right to repair or replacement, or a price reduction or refund. Where the digital content is supplied on a physical medium, the consumer will also have the short term right to reject and the final right to reject the goods. In addition, there is a new remedy for damage caused by the digital content to a device or other digital content.

Services

Contracts for the supply of services to consumers are treated as including terms that:

  • the trader will perform the services with reasonable care and skill
  • the service will comply with any information given by the trader pursuant to the Consumer Contracts Regulations
  • the service will comply with anything else said or written by or on behalf of the trader to the consumer about the trader or the service, if it was taken into account by the consumer when deciding to enter into the contract, or when making any decision about the service after entering into the contract, except to the extent that what was said or written was qualified.

The consumer’s remedies for faulty provision of services include the right to require repeat performance, and price reduction.

  • Unfair Contract Terms

The CRA sets out (in a much clearer way than before) the rules about unfair terms in consumer contracts. As before:

  • unfair terms in contracts between a trader and a consumer will not be binding on the consumer
  • written terms of contracts with consumers must be drafted in plain, intelligible language.

The rule about unfair terms will now apply even if the terms of the contract have been individually negotiated with the consumer.

In addition to the requirement that consumer terms should be in plain, intelligible language, the CRA adds a new requirement that they should be legible.

The assessment of unfairness will not apply to terms that specify the main subject matter of the contract, or the appropriateness of the price payable, but only in so far as they are transparent i.e. in plain, intelligible language, and are prominent, i.e. brought to the consumer’s attention in such a way that an average consumer (that is, one who is “reasonably well-informed, observant and circumspect”) would be aware of the term in question.

As before, the CRA sets out a list of “greylisted” terms that may be unfair, in addition to certain “blacklisted” terms that will always be unfair (such as attempts to exclude or restrict liability for death or personal injury resulting from negligence).

The Competition and Markets Authority has issued a revised draft Guidance document, to assist in interpreting the new unfair terms provisions of the CRA, and this will need to be taken into account when drafting consumer terms of supply.

Although non-compliance with the unfair contracts rules is not in itself a criminal offence, under the Consumer Protection from Unfair Trading Regulations 2008, unfair commercial practices are prohibited, and may result in a criminal offence, and this may include giving false information about the consumer’s rights.

Consumer Contracts Regulations

Reference has been made above to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“Consumer Contracts Regulations”), which came into force in the UK on 13th June 2014. These require certain information to be given to a consumer before the contract is entered into, and a right to cancel in the case of “off premises” contracts and “distance” contracts. The Consumer Contracts Regulations continue in force separately from the CRA, but (as indicated above) the information required to be supplied will be relevant to the consumer’s rights under the CRA.

Implications for traders

Traders who deal with consumers should by now have already reviewed their business procedures to ensure that they comply with the Consumer Contracts Regulations. What is said pre-contract will in many cases automatically become part of the contract.

The CRA will require traders to review the procedures that apply to complaints about faulty goods, digital content and services, including the repair and replacement of goods and digital content, and price reductions and refunds. For goods, traders will need to consider how the difference between the short term right to reject and the other remedies (including the final right to reject) will affect them. For suppliers of services, the remedies of repeat performance and price reduction will need to be considered, although this will often be reasonably clear in practice.

Traders will also need to review their written standard terms of business generally to ensure that none of the “blacklisted” terms are included, that any “greylisted” terms can be justified, and that the terms in general are in plain, intelligible language, are legible, and properly brought to the consumer’s attention.

A fuller guide to the Consumer Rights Act 2015 is available on request.

 

Contact the Author

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David Marchese

I graduated from Oxford University before qualifying as a solicitor at Herbert Smith. I went on to work at Richards Butler and then Davenport Lyons, before joining Gordon Dadds in 2014. I have extensive experience advising on the law of intellectual property, information technology and commercial contracts. I am the author of Business Licensing Agreements (Longman, 1995), the section on Supply of Goods and Services in Practical Commercial Precedents (Sweet & Maxwell) and several published articles including Joint Ownership of Intellectual Property (EIPR, 1999) and Warranties and Covenants in IP Licences (OUP, 2009).

Gordon Dadds