Brian Miller Solicitor's IP Law Blog

Thursday, 1 October 2015

A Guide to the Consumer Rights Act 2015 by Brian Miller Solicitor


(A downloadable version of this article in PDF format can be found here.)

The main sections of the Consumer Rights Act 2015 (“CRA”) came into force today (1 October 2015). This is a significant update and consolidation of consumer law, with the business-to-consumer aspects of long-standing pieces of legislation such as the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 being repealed.

The new law relates to business-to-consumer transactions only and makes it clear what should happen when goods or digital content are faulty, or when services are not provided with reasonable care and skill.

Some of the main points of the CRA are as follows:
  • Within thirty days of purchase, a consumer has a right to an immediate refund if the goods supplied are faulty
  • Within six months of purchase, if a faulty good cannot be repaired or replaced then the consumer will be entitled to a full refund in most cases
  • For up to six years, if purchased goods do not last a reasonable length of time, you may be entitled to some money back
  • If a business does not carry out a service with reasonable care and skill, the consumer has a right to request that the service be repeated or fixed.  If it cannot be fixed, the consumer will be entitled to some money back
  • If a consumer and business have not agreed a price before the service is delivered, the consumer must pay a reasonable price
  • If a timescale for the delivery of a service has not been agreed beforehand, then it must be carried out by the business within a reasonable time
  • If a consumer has purchased digital content which is faulty, then they are entitled to a repair or replacement
  • If a fault with digital content cannot be fixed, or if it has not been fixed within a reasonable time and without significant inconvenience, the consumer is entitled to either a full or partial refund
  •  If a consumer can demonstrate that the faulty digital content has damaged their electronic advice and that the business has not used reasonable care and skill, the consumer may be entitled to a repair of that device or compensation

  
The Sale and Supply of Goods
What can the consumer expect?

Under the CRA, certain standards apply for the sale and supply of goods (including hire purchase, hire, part exchange and contracts for work and materials).

The business/trader selling the goods must have the right to do so and the goods must:

  • Be of a satisfactory quality Goods must be of a standard that a reasonable person would regard as satisfactory. The quality of the goods covers a number of factors including:
    • fitness for purpose (in the context of the purposes for which the goods of that type are usually supplied)
    • appearance and finish
    • minor defects
    • safety
    • durability
In assessing the quality of the goods, all of the relevant factors must be considered, including price, description, and the advertising used by the business/trader.

  • Be fit for a particular purpose - When a consumer indicates that goods are required for a specific purpose, or where it is obvious that goods are intended for a particular purpose and a trader/business supplies them to meet that requirement, the goods should be fit for that specified purpose.

  • Match the description - When a consumer relies on a description (or perhaps a sample or display model) the goods supplied must match expectations. If the goods do not conform, an offence may have been committed.

  • Be installed correctly - This is where installation has been agreed as part of the consumer contract.
A consumer’s remedies for breach of rights

·         Short-term right to reject
o    If the goods do not meet the requirements above, there is a short period during which the consumer can reject them. This period is thirty days unless the expected life of the goods is shorter (e.g. highly perishable goods). This right does not apply where the only breach relates to an incorrect installation of goods
o    If the consumer asks for repair or replacement during the thirty day period, the period is paused so that the consumer has the remainder of the thirty day period, or seven days (whichever is longer) to check whether the repair/replacement has been successful and to decide whether to reject the goods
o    When the goods are rejected, the consumer is entitled to a full refund
o    The trader is responsible for the reasonable cost of returning the goods, unless the consumer is returning them to the place where he took possession of them (and assuming that this is a requirement under the contract in order to get a refund)

·         Repair or replacement
o    When there has been a breach of the sales contract and the customer has failed to exercise any right to reject the goods, then he or she will be entitled to claim a repair or replacement
o    This repair or replacement must be carried out with no cost to the consumer, and in a reasonable time and without causing significant inconvenience to the consumer
o    Where repair or replacement fail, the consumer is entitled to further repairs or replacements or he can claim a price reduction or the right to reject

·         Price reduction and the final right to reject
o    If repair or replacement is not available or unsuccessful, or is not provided within a reasonable amount of time and without significant inconvenience to the consumer, then the consumer can claim a reasonable price reduction or reject the goods by returning them to the trader.

The burden of proof
·        Regardless of the remedy being pursued, if the defect is discovered within six months of delivery, it is assumed that the fault was there at the time of delivery unless the business/trader can prove otherwise
·         If more than 6 months has elapsed, the consumer has to prove the defect was there at the time of delivery


The Supply of Services
What can the consumer expect?

The trader/business supplying the service must ensure that the following standards are met:
·    The service must be carried out with reasonable care and skill
·         Where it has been relied upon by the consumer, information that has been relayed to the consumer (either orally or in writing) is binding
·         Where the price is not agreed before the service is carried out, the price must be a reasonable one (and will be judged against the prices that similar businesses/traders have charged)
·         Where there is no agreement in relation to time, the service must be carried out within a reasonable timeframe


A consumer’s remedies for breach of rights
·         A repeat performance of the service
o    This remedy can be requested when the service has not been carried out with reasonable care and skill
o    This work must be done at no cost to the consumer, within a reasonable time and without causing significant inconvenience to the consumer
·         Price reduction
o    The consumer can claim a price reduction where a repeat performance is impossible or cannot be done within a reasonable time and without causing significant inconvenience to the consumer
o    A reduction in price can also be claimed where the service has been carried out to a good standard, but where it has not been carried out in a reasonable time
o    The price reduction can be anything up to 100% of the amount paid, depending on how serious the breach has been
·         Exceptions
o    If the service has been carried out using reasonable care and skill and in a reasonable amount of time, a consumer cannot make a claim if the service did not achieve the consumer’s desired outcome, unless that outcome was agreed first
o    A consumer cannot make a claim where they are responsible for things going wrong (e.g. they requested that the trader use cheaper materials, short-cuts, etc)


The Sale of Digital Content
What is digital content?

With digital and downloadable products becoming an ever-growing and prominent part of the consumer market, the CRA ensures that consumer law makes specific requirements in relation to such content. Digital content can include products such as the following:
  • Computer games
  • Television programmes
  • Films
  • Music
  • E-books
  • Computer software
  • Phone and tablet apps


What can the consumer expect?
The trader/business supplying the digital content must ensure that the following standards are met:
·         The digital content is of satisfactory quality
o    When deciding whether digital content is satisfactory, three factors are taken into account: any description that was attached to the digital content, the price paid and all other relevant circumstances such as public statements made in advertising and labelling
o    Quality of the digital content is to be considered in terms of safety, durability, the product being free from minor defects and the fitness for all the purposes for which digital content of that kind is usually supplied

·         Fit for a particular purpose
o    If, before a contract is made, a consumer makes known to the trader a particular purpose that he intends to use the digital content for, this becomes a term in the consumer contract. The consumer may make this particular purpose known to the trader directly or by implication
o    An exemption to this requirement is if it can be shown that the consumer did not rely on, or it was unreasonable for the consumer to rely on, the skill or judgement of the trader
·         The digital content is as described
o    The content must match the description that has been given to it by the trader
o    The content must match the description regardless of how it compares to any trial version that had been examined prior to the completion of the contract

A consumer’s remedies for a breach of rights
·         Repair or replacement
o    If there is a quality defect in the digital content, the consumer can request that the content is replaced or repaired
o    This must be done by the trader within a reasonable amount of time and without significant inconvenience to the consumer. The trader must bear any costs that are involved in replacing/fixing the content
o    The consumer does not have a right to repair or replacement if it would be impossible to do so, or it would be disproportionate in comparison to any other remedy
o    If the consumer shows that the digital content is defective within six months of its supply, it is to be taken as being defective on the day it was supplied
·         Price reduction
o    This remedy is only available where replacement/repair is not possible, or replacement/repair has been requested by the consumer, but not carried out within a reasonable time or not without significant inconvenience to them
o    The agreed reduction must be refunded without undue delay, and no more than fourteen days after the reduction has been agreed between the trader and the consumer.

Free digital content
The rights and remedies available to consumers under the CRA are still available when digital content has been given away for free, provided that the free digital content has been supplied under a contract where the consumer has to pay for goods, services or other digital content in order to get the “free” content. For example, if a consumer is given free anti-virus software when purchasing a laptop computer, the consumer would have the same rights as described above in relation to the software.

Damage caused to a device or other digital content
Where digital content has been supplied and causes damage to a device or to other digital content belonging to the consumer (and the damage is of a kind that would not have occurred if the trader had exercised reasonable care and skill), the consumer can request:

  •          Repair of the damage

o    This must be carried out within a reasonable time, without significant inconvenience and without cost to the consumer
  •          Payment of compensation

o    This must be given by the trader to the consumer without undue delay, and in any event within fourteen days of the trader agreeing to pay the compensation

Unfair Terms
The CRA has built upon the Unfair Contract Terms Act 1977 (“UCTA”) in relation to protecting consumers against unfair contract terms.

The test for 'unfair terms' in the CRA is the same as that in UCTA: it provides that a term is "unfair" if "contrary to the requirements of good faith, it causes a significant imbalance in the parties' rights and obligations to the detriment of the consumer".

The most significant change as now embodied in the CRA relates to 'relevant terms' (these are terms specifying the key elements of the contract, i.e. the main subject matter of the contract or setting the price). These relevant terms are not subject to the fairness test provided that they are both:

  •          Transparent – in plain language, and legible (if in writing)
  •          Prominent – brought to the consumer’s attention in a way that an average consumer (who is well informed and observant) would be aware of the term(s)

This test goes further than existing law, which includes the 'transparency' requirement but not the 'prominence' requirement. Businesses should now be even more wary of ensuring that relevant terms are clearly brought to a consumer's attention.

Stone King LLP
1 October 2015

If you require any further information or advice on how the Consumer Rights Act 2015 will affect your business, please get in touch.

BrianMiller is a solicitor and partner and Richard Jones a trainee solicitor at Stone King LLP, providing specialist advice in the fields of commercial law, intellectual property, IT, and data protection.


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.

No comments:

Post a comment

Note: only a member of this blog may post a comment.