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Navigating the complex area of consumer legislation can be tricky for consumer-facing businesses.
However, as consumers are protected by statutory rights that cannot be limited or excluded by terms and conditions, the consequences of non-compliance can be potentially very costly.
It is, therefore, imperative for businesses that supply goods, services or digital content to consumers to ensure that their terms and conditions are carefully drafted to ensure they are compliant with consumer rights legislation.
This commercial article explores some areas of consumer legislation businesses should be aware of when supplying to consumers.
Further information regarding terms and conditions of supply can be found on our website.
What protections are afforded to consumers?
Implied terms
The Consumer Rights Act 2015 (CRA) implies certain terms in all consumer contracts depending on what is being supplied: goods, services, digital content or a combination of all three.
- Goods - Where the contract is for the supply of goods, the CRA provides that the goods must be:
- of satisfactory quality;
- fit for purpose, and
- match their description, any sample or model.
- Services - Where the contract is for the supply of services, the CRA provides that the services must be:
- carried out with reasonable care and skill, and
- be carried out for a reasonable price and within a reasonable time.
- Digital Content - Where the contract is for the supply of digital content, the CRA provides that the digital content must be:
- satisfactory quality;
- fit for purpose, and
- as described.
The CRA provides consumers with different remedies should they receive defective goods, services or digital content. Some of such remedies include:
- Goods – Where a consumer receives defective goods, they have the right to:
- reject the goods within 30 days and request a full refund;
- a repair or replacement of the defective goods; and
- a price reduction and a final right to reject the defective goods.
- Services – Where a consumer receives defective services, they have a right to:
- require the service(s) to be repeated (at the supplier's cost);
- a price reduction.
- Digital Content – Where a consumer receives defective digital content, they have the right to:
- require repair or replacement of the defective digital content;
- a price reduction (potentially up to the full cost of the defective digital content) where the repair or replacement is not possible or has not been provided within a reasonable time;
- in addition, where the defective digital content causes damage to a device or other digital content, the consumer has the right to:
- a repair of the damage; and
- payment of compensation.
In addition to the remedies set out above, a consumer may also be entitled to bring a claim for damages where the goods, services and digital content do not conform with the implied terms set out above or the consumer suffers a loss or damage due to the goods, services and digital content.
Unfair terms
The CRA also applies a fairness test to all terms of a consumer contract.
A provision that causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer may be deemed unfair and subsequently invalid.
The risk this presents to businesses that supply to consumers is that they may be unable to enforce their terms and conditions against the consumer.
Additionally, consumer bodies such as Trading Standards can investigate unfair practices, which can lead to bad publicity for your business.
Distance selling
Where a business sells goods, services or digital content online, by phone, SMS or mail order (i.e. at a distance) or concludes the contract for the supply at a place other than its business premises, then additional rules and protections apply.
The additional rules for distance selling include requiring a business to:
- provide the consumer with the following:
- a prescribed list of information;
- a statutory cancellation period (or cooling-off period) of 14 days;
- a model cancellation form where the consumer has a right to cancel;
- obtain the consumer's express consent before taking any additional payments, and
- deliver the goods within 30 days of purchase unless agreed otherwise.
Next steps
This article has explored some of the consumer legislation in place that businesses supplying to consumers must be compliant with.
Businesses should ensure that their terms and conditions are well-drafted, unambiguous and legally compliant.
The Commercial Team at Myerson have extensive experience advising consumer-facing businesses and drafting terms and conditions that comply with such consumer legislation whilst remaining commercially pragmatic and business-friendly.