In this Part 2 we examine the new regime for selling goods under the Consumer Rights Act 2015 ('CRA'). Part 1 of this series of articles is available here.
Terms governing sale of goods
As with current law, under the CRA goods must be of satisfactory quality; fit for purpose; as described; and match a sample. The trader must also have the right to supply the goods.
- Fitness for purpose will only apply if the purpose for which goods were to be used was known to the trader before the contract is concluded.
- Goods must match any model that may have been seen/examined by a consumer, unless the differences have been brought to the consumer’s attention before the contract is made.
- When dealing with mixed contracts, the CRA has clarified that: the goods elements of a mixed contract will be subject to the statutory rights governing goods; the services element of a mixed contract will be subject to the statutory rights governing services and; the digital content elements of a mixed contract will be subject to the digital content provisions. For more information on the supply of services and the CRA please click here or if you would like to read more on the supply of digital content and the CRA please click here.
- A contract which involves the manufacture of tailored goods is a contract for the sale of goods (rather than a contract for services).
- Any information that is required by the Consumer Contracts (Information Cancellation & Additional Charges) Regulations 2013 to be provided to a consumer BEFORE the contract is concluded will also be deemed to be implied terms under the contract and such information cannot change without both parties' express consent.
- If a good is incorrectly installed, it will not conform with the contract.
When it goes wrong…
The CRA introduces the following remedies if the goods do not meet the statutory rights:
- 30 days to reject the good (called the 'short-term right to reject'). This period generally starts from the date the goods are delivered and ownership to the consumer transfers. If the goods will perish in less than 30 days then the time to reject is the lifespan of the perishable good.
- The consumer can require the consumer to repair or replace the good. The trader is given one opportunity to do this.
- If the repair/replacement fails or is impossible then the consumer has the right to a reduction in the price of the goods or a final right to reject the goods.
If the consumer exercises the final right to reject then there is no right for a trader to reduce the refund taking into account their use. After 6 months, any refund to the consumer may be reduced taking account the use the consumer has of the goods in the period since they were delivered. There is no remedy for a consumer if the breach of a contract is due to the materials provided by the consumer.
Further, the consumer is also entitled to recover costs incurred if a trader fails to provide the pre-contract information required under the Consumer Contracts (Information Cancellation & Additional Charges) Regulations 2013 and the information is not in relation to the material characteristics of the goods (where the remedies above would apply).
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.