Consumer rights law, which includes the law governing contracts for goods and services and unfair terms, was spread across a number of pieces of legislation. From 1 October 2015, it is now contained in the Consumer Rights Act 2015 (“CRA”).
The CRA has been drafted in three parts:
- consumer contracts for goods, digital content and services
- unfair terms
- miscellaneous and general (i.e. investigatory and enforcement powers and competition law issues)
The CRA provides (in general terms) clearer (and in some cases better) rights and protections for consumers. Businesses should ensure they understand the impact of the proposed changes.
The CRA: 10 Key Points
- The CRA repealed familiar legislation (for consumer transactions) like the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982, the Supply of Goods (Implied Terms) Act 1973, the Unfair Terms in Consumer Contracts Regulations 1999 and the Unfair Contract Terms Act 1977.
- Nothing has really changed regarding the implied terms relating to goods and services. For example:
- If there is a sale by description, goods, digital content and services must meet the descriptions given by the trader before they are sold.
- Goods and digital content must be fit for purpose and be of satisfactory quality; and
- Services must be provided with reasonable care and skill.
- A clear time period of 30 days (in most cases) has been set (rather than a “reasonable period of time”) for consumers to reject faulty or substandard goods and receive a full refund.
- If a consumer is prepared to accept a repair or replacement, this is limited to one attempt (rather than the undefined number of times).
- The CRA introduced a new regime relating to digital content (like software and e-books), including a provision which makes clear that the digital content must not harm the consumer’s device or any existing digital content stored. If it does, the trader would have to repair the device and/or the content or provide the consumer with appropriate compensation.
- A new right that a service must comply with information given by the trader, even if it is not recorded in the eventual written contract. Pre-contract information, like details on payment, delivery and after-sales service will also become implied terms of a contract.
- Clarification of which terms in a contract can be challenged in a court to decide whether or not they are fair and an ability for the Court to decide, on its own motion, whether terms are fair.
- Businesses will receive notice of routine inspections from relevant enforcers, like Trading Standards, to allow them to prepare necessary arrangements.
- More flexibility for Trading Standards and other public enforcement authorities to seek redress for consumers who have lost out because of consumer law breaches.
- There will be faster and lower cost reparation for both businesses and consumers where breaches of competition law have disadvantaged them, including a simplified complaint handling procedure and clearer legislation.
What Happens Next?
While the CRA does not broadly improve the rights of consumers or the powers of the court, it does make it easier for consumers to find out about their rights. Businesses may need to revisit their terms and other documentation. Now is the time to prepare.