The new Consumer Rights law coming into force on 1st October 2015 is significant: it introduces new rights for consumers as well as consolidating a lot of existing legislation, and it applies to almost all contracts between traders and consumers.
A ‘consumer’ is an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.
A ‘trader’ is a person acting for purposes relating to that person’s trade, business, craft or profession and it includes public sector authorities and government departments.
‘Goods’ are ‘tangible moveable items’ – in other words, things you can handle – so they do not include software or buildings.
Selling Goods – What the Law Says
It is a legal requirement that all goods sold to a consumer are:
- of satisfactory quality
- match their description
- match any sample that has been supplied
- match any model which has been seen by the consumer (unless differences have been pointed out)
“Satisfactory quality” is the standard that a reasonable person would consider satisfactory taking account of the description, price and other relevant circumstances. The quality includes:
- fitness for the purposes for which those goods are usually supplied
- appearance and finish
- freedom from minor defects
If the sale includes installation by the trader and the goods are installed incorrectly, then they do not conform to the contract.
If, before the contract is made, a consumer specifies a particular purpose for which the goods are required, then they have to be fit for that purpose even if they’re not usually supplied for that reason.
Traders are required to provide a lot of pre-contract information to consumers – including price, payment, delivery, performance etc. under The Consumer Contracts (Information etc.) Regulations. All that of information is now treated as a term of the contract. (See our previous guidance article on those regulations)
Remedies for Defective Goods
If goods do not meet these standards, a consumer has a number of potential remedies:
- Within 30 days from delivery (or installation if this is included), reject the substandard goods and claim a full refund
- after the 30 days the consumer can require the repair or replacement of defective goods
- if the trader does not replace or repair defective goods at all or does so but the goods are still defective, the consumer can require either a price reduction or a final right to reject the non-conforming goods and get a refund.
Consumers should normally raise any claim within six months from delivery.
A refund must be made within 14 days of the trader agreeing that a refund is due and no fee for arranging the refund is allowed.
Whether or not the contract requires the consumer to return rejected goods, the reasonable costs of return must be borne by the trader. But there is an exception if the consumer returns them from a different place than that where they were delivered. So, for example, if a trader in London supplies goods to a consumer in Brighton and the consumer then moves to Paris, the trader only has to pay the cost of return from Brighton, not the cost from Paris.
If a consumer rejects goods more than six months after delivery, the trader is allowed to deduct from the refund an amount to take account of the time the consumer had use of the goods. (But no deduction is allowed if the goods are a motor vehicle)
The remedies do not prevent the right of a consumer to claim damages or seek some other remedy in the courts. However, the law does say that the consumer cannot make a double recovery for the same loss.
Delivery of Goods
The law (Section 28) requires a trader to deliver goods within 30 days unless another period is agreed. If delivery is not within this period the consumer can treat the contract as at an end if the consumer made it clear that delivery within that period was essential. Otherwise the consumer can demand delivery within ‘an appropriate’ period and if the trader does not meet this, the consumer can cancel.
Risk of loss or damage passes to the consumer when the goods come into his possession or they are delivered to a carrier commissioned by the consumer.
Using a good standard set of terms and conditions, and getting legal advice if there is anything aren’t sure about, is always good practice regardless of changes in the law. ContractStore have a range of ready made T&Cs and other documents for selling goods that are specifically designed for businesses trading goods. For example:
- Standard Terms & Conditions for Purchase of Goods & Equipment
- Terms & Conditions for Sale of Goods Online (E-commerce T&Cs)