The Consumer Rights Act (CRA) received Royal Assent on 26 March 2015 and is expected to come into force in October of this year. The CRA will reform and consolidate much of the existing consumer law in the UK. This article summarises some of the key changes brought about by the CRA; retailers who contract with consumers must review their Ts&Cs and sales procedures now to ensure compliance with the Act when it comes into force.
Supply of goods, services and digital content – key changes
Part 1 of the CRA sets out consumer rights in contracts for goods, services and digital content. These rights will be familiar to retailers as they broadly reflect the current legislation. There are some notable changes, however.
The CRA introduces new rights relating to the sale of digital content. Under the current law videos, songs and books are only treated as goods if purchased on a DVD, CD or in hard copy, but not when downloaded from the internet. The CRA introduces implied terms and remedies for consumers of digital content and introduces a compensation mechanism where digital content causes damage to other goods owned by the consumer (e.g. due to a virus).
Consumer remedies in respect of faulty goods have also been amended.
Click here to view table.
Unfair terms – key changes
Under the current law, a term in a consumer contract is considered 'unfair' if it 'causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer.' This fairness test will continue to apply under the CRA but will be extended to consumer notices (any announcement or communication which is intended to be seen or heard by a consumer).
The Act provides that written terms in consumer contracts and notices must be transparent, in plain and intelligible language and legible. In addition, the CRA adds some new terms to the current 'Grey List' of terms which are presumed to be unfair, namely:
- Terms providing for disproportionately high charges where the consumer decides not to conclude a contract for services which have not yet been supplied.
- Terms which allow the retailer to determine characteristics of the goods/services after the consumer has become bound.
- Terms which allow the retailer to determine the price of the goods/services after the consumer has become bound.
Are you ready?
With the changes due to come into force in a matter of months, retailers who have not yet reviewed and updated their Ts&Cs and sales practices to ensure compliance must do so now.