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.
Background
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.
Consumer contracts
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.
Unfair terms
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).
Summary
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.