Consumer Rights Act 2015: what businesses need to know and do to ensure they remain compliant

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Consumer Rights Act 2015: what businesses need to know and do to ensure they remain compliant

01 Oct 2015

The Consumer Rights Act 2015 came into force on 1 October 2015. Its main aim is to simplify existing consumer legislation by grouping it all in one place, allowing consumers better access to information about their rights. The Act has also introduced a number of important changes that businesses need to know about.

Sale of Goods

In relation to the sale of goods, all terms implied under the Sale of Goods Act 1979 are now included in the new CRA. Implied terms provide the consumer with basic guarantees regarding the goods they are buying, regardless of whether the seller includes such terms in the sale agreement. They include, for example, that the seller has the right to sell and that the goods correspond with any description provided.

Some new implied terms have now also been added by the CRA, including the guarantee that all pre-contract information will form part of the contract, regardless of whether this is specifically stated by the seller. The requirement for certain information to be provided prior to the contract’s entry was introduced by last year’s Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, and includes information regarding pricing, delivery, description of the goods and various other requirements.

What should I do now?

This means sellers should ensure the accuracy of such information and make it sufficiently clear at the correct point in the ordering process, in order to avoid purchasers seeking remedies for non-compliance. For further information regarding the 2013 Regulations, please see our previous update here or contact our commercial law team.

Non-Conforming Goods

The CRA has also created new rights in respect of faulty goods, to provide further protection for consumers. A 30-day “short-term” right to reject has been introduced (replacing the previous uncertainty of the right to reject within a “reasonable period”). This allows a consumer to reject faulty goods and claim a refund within 30 days of receipt, without needing to give the seller a chance to repair or replace. After this initial 30-day period has passed (or if the “short-term” right is not exercised), then the consumer has a right to repair or replacement, at the seller’s option.

Finally, consumers are entitled to a full refund or reduction in price if the goods remain faulty following repair or replacement. A full refund would be appropriate where the goods are returned, and a price reduction due where the consumer keeps the goods. If repair or replacement is not a viable option for the seller – for example, if it would be more expensive than the cost of the goods – the seller can opt to provide a refund without attempting to repair or replace.

Another key change introduced by the CRA, which could spell trouble for businesses unless addressed, is a new default position relating to faulty goods. The consumer only has to make such goods “available for collection” by the seller, and has no obligation to return them. This can however, be addressed in supply terms by placing an obligation on the consumer to return faulty items to the seller, to ensure businesses do not have to go to unnecessary lengths to retrieve their goods.

A further change is the introduction of a default delivery time of up 30 days. If businesses know they cannot deliver within this 30-day period, they should expressly provide for an alternative delivery time in their terms, to avoid consumer claims for late delivery.

What should I do now?

As these standard remedies represent a change to the previous law, businesses will need to update their terms and returns procedures in order to remain compliant with these new rights.

Services

The CRA has also introduced new rights in relation to the provision of services. Information provided by the seller to the customer, prior to the contract being formed, can now be binding on the seller if the customer took this into account when deciding to purchase the service.

Non-Conforming Services

Services will be non-conforming if they are not performed with reasonable care and skill, are not provided in accordance with information given pre-contract or are not performed within the agreed time limit (or, if not agreed, a reasonable time).
Where services are non-conforming, the customer can demand repeat performance or a price reduction. Repeat performance cannot be demanded where the service is not performed in time – in which case the customer’s only available remedy would be a price reduction.

What should I do now?

Service providers should ensure that they do not provide the consumer, pre-contract, with any information about the service which they cannot fulfil. They should also think realistically about how long it will take to provide the service to avoid being in breach of any time limits.

Digital Content

The CRA has brought the law into the 21st century by providing that consumers purchasing digital content (which includes anything from a downloaded MP3 or film, to the technology included in a hi-tech washing machine) will have similar rights to those that apply when purchasing goods – for example, correspondence with description, satisfactory quality, etc. Similar remedies as for those relating to non-conforming goods have also been created for consumers when businesses do not comply with these new laws.

What should I do now?

Given that this protection is conceptually new, then the existing terms and conditions of content providers should certainly be reviewed without delay in order to ensure that they comply with the CRA.

Fairness

The existing law surrounding unfair terms has also been affected by the CRA.

The CRA has restated many previous rights in relation to unfair terms, and also developed them further to increase consumer protection. Terms relating to the price of the goods will now only be excluded from the fairness test (that is, whether a term is contrary to good faith and causes a significant imbalance between the parties to the consumer’s disadvantage) if they are in plain and intelligible language, and prominent. Whether a term is prominent will depend on whether it is fairly brought to the consumer’s attention. This means sellers cannot include additional charges in small print without there being a risk of these being deemed unfair.

What should I do now?

These fairness provisions now apply to all agreements, not just standard form terms and conditions. Also, more terms have been added to the “grey list” of terms, which is a list of example terms that are deemed likely to be unfair by their very nature. This means previously acceptable clauses could now be unfair and no longer binding on customers and should therefore be checked by a lawyer.

How Kuits can help

As a result of these changes, businesses should ensure that their terms and conditions of supply are up-to-date and comply with the changes introduced. If you would like Kuits’s Commercial Team to review your terms in light of these changes, or for further information regarding the changes, please contact us or call 0161 832 3434.

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