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How does the new Consumer Rights Act 2015 impact retailers?

The new Consumer Rights Act 2015 (the Act) takes effect from today and acts to strengthen, simplify and modernise previous UK consumer legislation. 

Existing UK consumer protection laws and regulations have been consolidated, making them clearer and easier for both consumers and businesses to understand. The Act also introduces some new rights and obligations which are likely to impact retailers and their dealings. This article briefly sets out some of the key changes.

Goods - implied terms

As with the Sale of Goods Act, all products will still need to: 

  • be of satisfactory quality;
  • be fit for purpose;
  • be as described; and
  • match the sample or model, where provided.

However, the Act adds that products must also:

  • match models seen or examined prior to the contract being entered into; and
  • be installed correctly, where installation has been agreed as part of the contract.

Consumer rights in respect of faulty goods

The Act introduces a new tiered approach to the consumer's right to reject goods:

1. Where goods are faulty (of unsatisfactory quality/ unfit for purpose / not as described) consumers are entitled to either:

  • a full refund for faulty goods within the first 30 days (shorter for perishable goods); or
  • request a repair or replacement, which must be provided free of charge.

2. If the first repair/replacement is not satisfactory or another fault appears the consumer is entitled to either:

  • reject the goods for a full refund within the first 6 months, or a partial refund thereafter (the only exception to this is for motor vehicles, where a reasonable reduction may be made for the use the consumer has had of the vehicle); or
  • keep the goods but request a price reduction.

Whilst the consumer has the option to choose between repair and replacement, a trader has the right to reject either option if it is disproportionately expensive.

New rules for digital content

Whilst the Sale of Goods Act covered contracts for the sale of goods and the sale of services, the Act introduces a third type of contract which is for the sale of digital content. 

Digital content is defined as "data that are produced and supplied in a digital form" and includes software, games and in-game purchases, music, films and e-books.

Consumer remedies for faulty digital content

The Act also takes a tiered approach to consumer remedies for faulty digital content. Here consumers are entitled to a repair or replacement in the first instance and then to a price reduction (which can be up to 100%) if the problem still exists. 

Consumers are also entitled to additional remedies where damage is caused to the consumer's device and/or other digital content.

Consumer remedies for unsatisfactory services

Dependant on the circumstances, where consumers are unhappy with services received the remedies available to them are:

  • repeat performance where the service is not in line with what was agreed in the contract (unless repeat performance is impossible); and
  • price reduction where repeat performance is unavailable/ has not solved the problem/there is a further fault with the service.

Strengthened consumer rights in relation to misleading information

Previously, if a retailer provided misleading information to a consumer, a consumer could only raise an action for misrepresentation, on the basis that such information did not form part of the contract. However, under the Act, any spoken or written statements made by a retailer will form part of the contract and as such consumers will now be entitled to claim for breach of contract where such statements are not adhered to. This includes both pre and post contractual statements. 

Strengthened consumer rights in relation to hidden terms

The Act places greater obligations on traders to make consumers aware of key terms in the contract including any terms which deal with the main subject matter of the contract and any terms which set out the price. Such terms must be:

  • transparent (written in plain and intelligible language); and
  • prominent (brought to the consumer's attention).

The Act also extends the fairness test to cover consumer notices, which can be either written or oral and renders any consumer notices which are deemed to be unfair as unenforceable.

Comment

Whilst the Act largely brings together pre-existing legislation, it does also introduce a number of additional rights and obligations which retailers should be aware of. Retailers would be wise to ensure that they have reviewed any product terms and conditions and other information provided to consumers in light of the new legislation to ensure that they are compliant.  

For further information or advice, or if you are interested in training on this subject please contact Duncan Reed on +44 (0)333 006 0742  or duncan.reed@TLTsolicitors.com. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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