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Businesses and The Consumer Rights Act

Posted on 27th March, 2017

Last week saw the Corporate and Commercial team deliver its final Packed Lunch Seminar, of the current series, in our Newcastle office.

The team had been looking at ‘Watertight Terms and Conditions of Business’ and within this seminar, they touched on recent changes in the law, namely the Consumer Rights Act 2015 (CRA).

The CRA is described as the single most important consumer law instrument in the UK. The CRA has reformed the rights and remedies for defective goods and services, introduced new rights and remedies for digital content and reformed the law on unfair terms.

In light of this, a news article entitled ‘This is the worst purchase I’ve ever made’ caught the eye of the team. A couple bought a brand new vehicle from a car dealership two years ago, and have since had a whole catalogue of problems with the vehicle. They allege they have had only limited help from the companies involved and therefore have had to resort to placing warning signs on their vehicle to alert other potential purchasers.  Whilst Jacksons cannot comment directly on the legalities of this specific case, we can provide general pointers on the reforms made under CRA which came into effect 1st October 2015:

1. Who and What is Covered?

Only those contracts between businesses and consumers are covered. Contracts for Goods (including goods for sale, for hire and hire-purchase), Services and Digital content (either paid for or received for free) are all covered.

2. Terms of the Contract

  • Consumer contract terms should:
  • Be clear, precise and understandable
  • Avoid legal jargon and overly-technical terminology
  • Not put the Consumer at an unfair disadvantage
  • Not contain backlisted ‘unfair’ terms including hidden terms, controlling terms and preventative terms.

The Consumer will have different rights to cancellation and cooling off, depending on where the contract is concluded:

  • On premises- e.g. the trader’s usual premises
  • Off premises- e.g. the consumer’s doorstep
  • Distance – e.g. online shopping, telesales and social media

The Consumer has a right to cancel off premises or distance contracts at any time during the cancellation period which is usually 14 days after delivery of the Goods or 14 days after the conclusion of the contract for Services and Digital Content. The Consumer does not need to provide a reason and can expect a full refund including delivery costs.

3. Responsibility if things go Wrong

Where a business is at fault and they try to either remove or limit their liability or prevent the Consumer from seeking compensation, these provisions will be deemed to be unfair terms. Businesses must not remove or reduce through its terms and conditions, the statutory rights of the Consumer. Statutory rights include but are not limited to:

  • Satisfactory quality
  • Fitness for purpose
  • Be as described
  • Correct installation

Businesses can seek to remove or limit its liability for loss or harm caused that is not their fault.

4. Remedies and Enforcement

Consumer remedies:
For Goods:

  • Right to reject and a full refund
  • Right to repair or replacement
  • Right to a price reduction

For Services:

  • Right to have the services repeated
  • Right to a price reduction

Digital Content:

  • Right to repair or replacement
  • Right to a price reduction
  • Right to a refund
  • No right to reject and no way to return

Enforcement:

The Competition and Markets Authority (CMA) is the UK’s main consumer regulator and forms part of the Consumer Protection Partnership (CPP) with other enforcement bodies. They have a range of enforcement powers at their disposal:

  • Investigatory Powers: require information, observe the business carrying on its trade and enter premises without a warrant
  • Enforcement Powers: injunctions, enforcement orders, undertakings and criminal prosecutions

If you are a business dealing with Consumers and require any further advice or guidance in complying with the CRA, please don’t hesitate to get in contact with the Corporate and Commercial Team on 01642 356 500/0191 232 2574.

Future Packed Lunch Seminars are taking place in both Stockton and Newcastle in the coming months; please see our website for more details: https://www.jacksons-law.com/events.


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