The Consumer Rights Act 2015 (the “Act”) received Royal Assent on 26 March and it is currently proposed that its main provisions come into force on 1 October this year. The Act is relevant to all consumers and any person or organisation that sells goods or services directly to consumers. If you are an organisation providing goods or services, the implementation of the Act provides a good opportunity for you to review your current terms and conditions and ensure that they are compliant.
Before the Act, consumer law in the UK was very complicated and difficult to navigate for lawyers and even more complex for the average consumer to understand. There were no fewer than ten pieces of legislation relating to domestic consumer law ranging from the Sale of Goods Act 1979 to the Enterprise Act 2002. Consumer law was also not up to date with technological changes in the market place and did not sufficiently address issues arising from internet shopping and downloading of digital content such as apps, music, and films.
The Act seeks to amalgamate in one place the rules governing consumer rights in the UK. The Act is split into three parts: Part 1 Consumer contracts for goods, digital content and services; Part 2 Unfair Terms; and Part 3 Miscellaneous and general provisions. Below is a summary of the key provisions.
In relation to goods, the Act sets out the standards that must be met (e.g. that goods must be of satisfactory quality, as described, fit for a particular purpose and so forth) and the remedies available to consumers for goods supplied under different types of contract (previously such remedies were inconsistent). Consumers now have thirty days in which to reject substandard goods and if they reject goods within this time period, they will be entitled to a full refund. Limits have been placed on the number of times replacement goods and repairs can be offered before the provider must offer money back to the consumer and on the extent to which a provider can reduce the amount of a refund where the goods are not initially rejected (for example, if the final right to reject is exercised by the consumer in the first six months, no deduction to the refund can be made).
The Act also sets out consumer rights in relation to the provision of services. A service must be performed with reasonable care and skill, a reasonable price is to be paid for it and it must be provided within a reasonable time. The consumer has statutory remedies of repeat performance and price reduction if a service does not comply with the contract. In addition, information about the service provider or service is now binding. For example, if a salesperson says something about the service and the consumer then relies on that statement, that information will be binding (even if it is not included in a written contract).
The Act introduces a new category in consumer law namely, digital content, and sets out the statutory remedies available to consumers if their digital content rights are not met.
The rights and remedies which are available to consumer cannot be excluded or limited.
The second part of the Act consolidates, but also adds to, the current laws on unfair contract terms. If a term of a consumer contract is deemed to be unfair, it will not be binding on the consumer. A term is considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. Schedule 2 of the Act also sets out a non-exhaustive list of terms which may be regarded as unfair (for example, a term which has the object or effect of excluding or limiting the trader’s liability in the event of the death of or personal injury).
Certain terms in a consumer contract are excluded from the “fairness” test. Terms which specify the main subject matter of the contract or relate to the price of the contract cannot be assessed for fairness provided that they are transparent (in plain and intelligible language and (in the case of a written term) are legible) and prominent (if brought to the consumer’s attention in such a way that an average consumer would be aware of the term).
So if your organisation is providing a service or selling goods directly to the consumer, we would urge you to review your terms and conditions of sale to check that they are compliant with the relevant provisions of the Act before it comes into force later this year.
BrianMiller is a solicitor and partner and Lauren Mitchum a trainee solicitor at Stone King LLP, providing specialist advice in the fields of intellectual property, IT, data protection and commercial law.
If you would like further information about the Regulations or if you have any concerns or queries in relation to them, please contact Brian.
Disclaimer: This article may not be reproduced without the prior written permission of the author. This article reflects the current law and practice. It is general in nature, and does not purport in any way to be comprehensive or a substitute for specialist legal advice in individual circumstances.