Understanding Consumer Rights Law: Navigating the Consumer Rights Act 2015
Any business which supplies goods or services to a “consumer” must comply with statutory consumer rights law, regardless of whether their trade is physical or digital in nature. It is therefore essential to understand the relevant legislation.
The Consumer Rights Act (CRA) 2015 stipulates the legal responsibilities that a business has towards its consumers, in relation to the goods and/or services it provides them. The Act is relevant to all B2C contracts, but excludes trading contracts made with other businesses, such as your suppliers. We will provide a comprehensive breakdown of the legislation, to ensure your business’ goods and services are compliant.
Quality of Goods/Services
Many of the statutory rights afforded to consumers are self-explanatory and will seem obvious to the average business. However, it is worthwhile knowing some specific points about their interpretation within consumer law.
“Satisfactory Quality”
Whether goods or services meet this standard is subjective, but will depend especially on the descriptions relied upon by the consumer, and the cost which they were required to pay for them.
The CRA 2015 refers explicitly to: “appearance and finish; freedom from minor defects; safety; durability.”
“Fit for (a particular) purpose”
If a buyer has gained assurance that the paint he is buying for his children’s art supply shop is non-toxic, he believes the goods will be suited for the particular task they are purchasing it for. However, if the paint turns out to be toxic and unsafe for children, it is unfit for the particular purpose, and the seller will be in breach of this implied (fit-for-purpose) term.
“Match descriptions”
The requirement covers not only written and verbal descriptions, but also any samples which the consumer has been sent, or any display models which they have seen or experienced.
“Reasonable price to be paid for a service”
The law DOES NOT seek to regulate whether the consumer is striking a good bargain with your business. Where no price has been paid or agreed for a service up-front, a consumer contract implies a term that the price payable is no more than is reasonable, as a matter of fact.
Remedies
It is equally important to understand the rights of the consumer if the goods or services sold by a business breach the requirements of the CRA 2015. The consumer, in this instance is entitled to various remedies, depending on the nature of the defect and the time that has elapsed.
Goods
Rejection of the goods within 30 days, in return for a full refund.
Also referred to as the “early-right-to-reject”
A business may choose to extend the period beyond 30 days, for customer benefit.
OR (If the 30 day period has lapsed) ...
Repair or replacement of the faulty goods, with the trader incurring the costs.
IF goods are still faulty after a single attempt at repair or replacement…
Final right to reject the goods, and be refunded.
Refunds may be reduced to reflect the extended time the consumer has had to enjoy and benefit from the goods.
Services
Right to receive a “repeat performance”, of the poorly conducted service.
OR
Right to request a price reduction on the contract price (may extend to a full refund)
Burden of Proving that Goods are Defective
If your consumer discovers a defect within 6 months of receiving the goods, there is an assumption they were defective when delivered. The trader bears the burden of proving that the defect arose otherwise; e.g. from misuse by the buyer.
If a defect is discovered more than 6 months after receipt, the position switches, and the consumer has to prove that it was already present at the point of delivery (albeit hidden and undiscovered).
Goods or Services Purchased in a Store
If a consumer has made a purchase at the physical premises of a business, they are NOT legally entitled to a refund simply because they have changed their mind about the purchase. The right to replacement, repair or refund only exists if the goods or services sold were faulty.
You may be surprised at this as many businesses choose to operate a returns policy that allows consumers to return a purchase for a refund, simply because they have changed their mind. Such policies tend to be implemented as they are beneficial for customer relations, but they are NOT a statutory entitlement for sales made from a physical store.
“Distance Purchases” and “Off-Premises” Contracts
A business is involved in “distance purchases” if it sells products or services through an online channel, over the phone, or by mail-order. If you are considering having an online-only business, it would fall into this category.
Your business is involved in an “off-premises” contract, if it was entered into away from your business's main place of trade, such as by a sales person visiting a customer’s home. If you sell door to door, this would apply to you.
Consumers of either type of contract benefit from the additional protection of a cooling-off period. They have 14 days, in which to reconsider and cancel the contract they have entered into with your business. The relevant period begins from the date of delivery, for the supply of goods; whereas it is from the moment the contract was formed, for the supply of services.
There are a few exceptions to an entitlement for a cooling-off period; this includes contracts for perishable or personalised goods.
Unfair Terms
If you are a business trading with consumers, be wary of including any terms that could be construed in law as “unfair”; such terms will not be legally binding upon the consumer.
For consumer contracts, a term will be considered unfair under the CRA 2015, "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".
The rationale is that consumers are generally deemed to be in an unequal bargaining position with traders. The law affords them a higher degree of protection than it does for businesses that enter into contracts with other businesses.
As well as the requirement for fairness, all terms within a consumer contract must also be “transparent”; meaning, that the terms are expressed in a plain and intelligible manner.
Product Liability
The Consumer Protection Act 1987, imposes liability upon “Producers”, for any damage which is caused by defects in the goods they have produced.
Although a business may have outsourced the manufacturing of a good, it will still be liable as a “producer”, if it has held itself out as being the producer, for example by placing its branding on the packaging, or upon the goods themselves.
Crucially, the person suffering damage and making a claim may be anyone and not just the purchaser of the product. For example, a person who has received the product as a gift from the purchaser.
The “damage” caused to the claimant by the “defective product”, can include personal injury, death, or damage to property (valued in excess of £275).
The type of liability imposed on producers is known as “strict liability”: this means there is no requirement for the claimant to prove the producer was negligent in allowing the defective product to be created and distributed for sale.
Statute
Author - Edward Bennet-Gibbon -
Author - Edward Bennet-Gibbon -
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DISCLAIMER
This article has been written by law students for the sole purpose of providing informative insight. The information in this article is intended for educational purposes only and does not constitute legal advice, nor should the information be used for the purpose of advising clients. You should seek independent legal advice before relying on any of the information provided in this article.
Sources
Product liability | Westlaw UK
Sale and supply of goods | Business Companion
Consumer rights: what new business owners need to know | Start Up Loans
What is the Consumer Rights Act? | FSB, The Federation of Small Businesses
The Consumer Rights Act 2015 - Citizens Advice
How the Consumer Rights Act 2015 affects your business (which.co.uk)
The Consumer Rights Act: consolidating UK consumer protection laws (pinsentmasons.com)
