In this Part 3 we examine the key changes that the Consumer Rights Act ("CRA") brings in, in relation to the provision of services.
Part 4 of this series of articles can be found by clicking on Part 4 here.
Terms governing the supply of services to consumers
As with the previous law, under the CRA services to consumers must be:
- carried out with reasonable care and skill;
- in consideration for a reasonable price; and
- performed within a reasonable time.
The latter two terms are implied where no statement about price or time for performance of services (or a way of determining it) is included in the contract or in the information provided about the service to the consumer before the contract is concluded.
But what is "reasonable skill and care" and "reasonable time"? The CRA does not define either other than, in the latter case, stating it is a question of fact. This means that both standards can vary on a case-by-case basis.
Traders must note that any statement that is offered or written (about the trader or about the service) to the consumer by or on behalf of the trader, and which is taken into account by the consumer when deciding to enter the contract or make a decision about the service after the contract, is treated as a contractual term.
When it goes wrong…
As with goods (you can read more about goods here), there is a "tiered" approach to remedies for breach of the above terms.
If the service is not performed with reasonable skill and care or if the service is not provided in accordance with the information the trader gave about the service, the consumer has:
- the right to require repeat performance; or
- if repeat performance is (i) "impossible" (for example, if the services are time-dependant) or (ii) not done in reasonable time without significantly inconveniencing the consumer, the right to a reduction in price.
If the services have not been provided within a reasonable time, the consumer has a right to a reduction in price.
A reduction in price may be a full refund or an appropriate reduction in price. However, any refund must be without a fee payable by the consumer. The refund must be provided within 14 days of the consumer contract to refund using the same method that was used to pay the trader.
Such tiered remedies are not exhaustive and the consumer is entitled to seek other remedies that are available under other law (for example the right to terminate the contact or to seek damages).
What should I review?
Businesses should be reviewing all consumer facing terms and conditions. These may include:
- consumer sales contracts (for goods, services and digital content) including website terms and conditions;
- contractual clauses that limit your business's liability;
- any pre-contractual information provided to consumers including marketing material;
- cancellation and returns policies.
Further guidance for businesses in relation to the CRA is available on the Business Companion's website, accessible here.