Consumer Law Reform – Part 2

The centrepiece of the UK’s consumer law reform programme – the Consumer Rights Act 2015 (“CRA”), became law on 1 October 2015. The CRA consolidates and updates an existing framework of consumer law that has, up until now, been contained in over 100 separate pieces of legislation.

As our introductory bulletin set out last week, a single set of rules now applies to all contracts where goods and services are supplied to consumers and, for the first time, introduces specific rules relating to the provision of digital content such as computer system software, downloaded music and mobile apps.

This blog looks at:

1. Who a ‘consumer’ is for the purposes of the CRA
2. The key changes relating to the supply of goods and how businesses can ensure compliance; and
3. Consumer remedies

1   Who is a consumer?

The CRA applies to all contracts made by a trader with a consumer. The new, wider definition of a “consumer” is an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession. Where a consumer presents himself as a business (for example, by buying goods for personal use from a trade outlet on a trade account) the law will not consider him to be a consumer. If a trader wants to claim that an individual is not a consumer (and therefore unable to claim protection under the CRA), the burden will be on that trader to prove this is the case.

2   The sale and supply of goods

The CRA broadly restates the statutory implied terms under the Sale of Goods Act 1979 that goods must be of satisfactory quality, be as described and be fit for purpose. Specifically, the CRA now says as follows:

• Goods must match a model seen or examined by the consumer, other than where the trader has brought differences to the consumer’s attention before the contract is made.
• Goods must be installed correctly where installation has been agreed as part of the contract (for example, the supply of a kitchen).
• Any digital content supplied with the goods must also be of satisfactory quality, fit for purpose and as described (see our last bulletin for details in relation to digital content).

3   Consumer remedies

Short-term right – 30 days

If goods do not meet the above requirements then the consumer has a short-term right to reject them lasting for a period of 30 days (unless the expected life of the goods is shorter as with highly perishable items). The right does not apply in cases where the only breach relates to an incorrect installation of the goods.

If the consumer asks for repair or replacement during this initial 30 day period, the clock is paused so that they have the remainder of the 30-day period, or 7 days (whichever is longer) to check whether the repair or replacement has been successful and to decide whether to reject the goods.

If a consumer rejects the goods and requests a refund, the trader must re-pay any cash within 14 days of it receiving those goods. The trader is responsible for the reasonable cost of returning the goods except where the consumer is returning them to the place where he took possession of them – for example, the retail shop where be brought them. However, note that the consumer is not required to return the goods to this place unless this was agreed at the outset as part of the contract. Terms and conditions should therefore be checked in this respect.

Final right

Once the short-term right to reject is lost, the consumer has the right to a repair or replacement. The trader has one opportunity to repair and can offer one replacement but must do this at no cost to the consumer. This must take place within a reasonable period of time and without causing significant inconvenience to the consumer.

If repair or replacement are impossible, the trader’s one attempt at repair fails or the first replacement is also defective, the consumer has the right to a price reduction or final right to reject and receive a refund. Such refund may be reduced to take account of the use the consumer has had of the goods in the period since they were delivered if more than 6 months have elapsed, except in the case of motor vehicles where a reduction can be made during the first 6 months.

Burden of proof

If a defect is discovered within 6 months of delivery, it is assumed that the defect was there at the time of delivery unless the trader can prove otherwise or unless this assumption is inconsistent with the circumstances (for example, there are obvious signs of misuse).

If more than 6 months have passed, the consumer has to prove the defect was there at the time of delivery. He must also prove the defect was there at the time of delivery if he exercises the short-term right to reject goods.

SUMMARY – GOODS

 ACTION POINTS:

• Businesses supplying goods to consumers should familiarise themselves with the new provisions of the CRA and put training in place to educate their staff. Guidance is available on the website of the Trading Standards Institute and includes suggested point of sale wording and commonly asked questions.
• Terms and conditions of supply should also be reviewed and amended as necessary to ensure compliance with the provisions of the CRA, especially in relation to the tier of remedies available to a consumer in the event of breach. The importance of pre-contract information should also not be forgotten.

If you require any further information, please contact Emily Sadler.

COMING SOON:

PART 3: in our next blog, we examine how the CRA affects traders in their supply of services to consumers.