The Consumer Rights Act 2015 (“the Act”) came in to force on the 1st October 2015. It will apply to contracts entered into on or after the 1st October 2015. It is a mixed bag of consolidating previous legislation into one statute and also some new law. It applies to contracts between traders/businesses and consumers, but not between businesses. This article summarises the main provisions of the Act.
Statutory Quality Standards (“SQS”) for the sale of goods
There are virtually identical SQS under the Act as previously, e.g. goods to be of a satisfactory quality, fit for purpose etc. In addition under the Act goods will need to:-
(i) Match any models seen or examined by the consumer, save where any differences are brought to the consumer’s attention before he enters the contract; and
(ii) Conform with pre-contract information.
Remedies in respect of sale of goods
The Act has changed the position on remedies for a consumer where goods are faulty. Previously a consumer had the right to reject and get a full refund provided he did so within a reasonable period of time subject to the right being lost if the goods were accepted by the consumer. Now under the Act the consumer, save for very limited exceptions (e.g. perishable goods) will have 30 days within which to reject and claim a refund.
If the right to reject is not exercised then the consumer has the right to a repair or replacement. The trader/business will only have one chance to repair/replace. If the goods are not repaired/replaced within a reasonable time or it is not possible or is unsuccessful, then the consumer has the right to a price reduction or a final right to reject.
The statutory remedies are in addition to other rights, e.g. to claim damages but obviously a consumer cannot recover twice for the same loss.
Prior to the Act, there was no specific statutory right regarding digital content. Now if any digital content supplied on or embedded in goods does not conform with the SQS under the Act, the digital content with be deemed faulty and the statutory remedies as above will be available.
Rules on Delivery
Rules on delivery have changed. Unless a business and a consumer agree a time or period for delivery before the contract is made, goods must be delivered without undue delay and within 30 days. Furthermore the goods remain at the trader’s risk until they come in to the physical possession of the consumer or the consumer’s nominated agent.
Prior to the Act, consumers had no statutory rights when services were of poor quality or defective, although there were common law remedies (e.g. damages) if the services were in breach of any expressed or implied clause that the trader would use reasonable skill and care. The Act provides as follows:-
(i) Every service contract includes a term that a trader must perform the services with reasonable skill and care. Liability can only be excluded/limited if it can be limited to the price paid by the consumer;
(ii) Pre-contract statements or information about the services will become contractual terms if they are taken into account by a consumer when he decides to enter into a contract;
(iii) If the contract price has not been paid and is not fixed, then the consumer has to pay a reasonable price. A reasonable price will be a question of fact;
(iv) If the time for performance is not fixed by the contract, the trader must perform the contract within a reasonable period of time.
Remedies for Defective Services
If (i) or (ii) above is breached then in addition to other remedies the consumer can require repeat performance at the trader’s costs unless impossible. The consumer can also seek a price reduction (which also applies to (iv) above) where repeat performance is impossible or the trader has failed to perform in conformity with the contract within a reasonable time and without significant inconvenience to the consumer. The price reduction can be the full amount.
Terms that seek to exclude or limit a consumer’s statutory rights and remedies in respect of goods are not allowed.
All written terms must be in plain and intelligible language and legible.
Most contract terms and any notices will be subject to a fairness test. Terms that are unfair will be void and unenforceable.
Terms that relate to the amount to be paid, or define the subject matter of the contract will be exempt from the fairness test provided they are transparent and prominent.
The Act is virtually identical in this regard to pre-existing legislation. A consumer will have however a new right to require a copy of any guarantee.
Grant Shackleston, head of our Litigation Team has commented as follows:-
“The Act consolidates much of the old law, which will be helpful to us lawyers! As for the changes, traders/businesses need to be on their guard! They will need to:-
(i) Review consumer contracts and notices (including website terms) to ensure compliance with the fairness rules;
(ii) Review all advertising/additional materials provided in the run up to selling as such matters referred to therein are likely to be contractually binding;
(iii) Brief all sales staff on the new tiered remedies, reviewing cancellation and return policies in the process;
(iv) For traders in digital content, to ensure that terms and conditions of business reflect the new law;
(v) Review terms and conditions of business to ensure that they are compliant with the new tiered remedy system.”
If you are a trader or a consumer and require advice on anything relating to the Consumer Rights Act 2015 or any other consumer type issue, then please contact Daven on 01775 722261 or email firstname.lastname@example.org or visit or attend at our offices for an appointment at 23 New Road Spalding Lincolnshire PE11 1DH.