The process of buying and selling lies at the heart of all our business lives. But do you really know your rights?
Anytime you buy or sell anything for your personal use in the United Kingdom, you are subject to a series of laws that apply to your transaction.
Leonie Savory explains the key points
and some of the special cases that everyone needs to know.
and some of the special cases that everyone needs to know.
Consumer Rights are the sort of topic that everyone is more or less aware of. I mean, you know that if you buy something faulty you can take it back to the shop and expect a refund or replacement, right? But what about when you download digital content? Or buy or sell a second-hand car? Do you know your rights and responsibilities in those special cases?
But when you are in business you need to be a bit more specific about the law – and that goes whether you are selling your goods and services or buying them for the business.
Let’s have a look at the key points:
What are Consumer Rights?
The law protects the rights of consumers when they buy anything, be it goods or services or both together. For example, you can buy the glass for a window (goods), pay for someone to fit that window (services) or use the same company to supply and fit the window (goods and services).
How does the law define “a consumer”?
Any time you buy anything, be it goods or a service, you are a consumer. Any time you sell anything to a private individual who is not buying on behalf of a business, you are selling to a consumer. A consumer is therefore someone who pays money for goods or services for personal use.
What laws are involved?
There are various laws, implemented by statute, which govern consumer rights.
These cover both business to consumer transactions, as well as business to business transactions.
The main pieces of legislation are the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982 and, more recently, the Consumer Rights Act 2015.
The Consumer Rights Act 2015
The Consumer Rights Act of 2015 is the most recent piece of legislation to cover sale and purchase transactions between parties. What does it say?
The Consumer Rights Act came into force on October 1st 2015. It was enacted by Parliament to consolidate and supplement existing legislation, especially in view of the new ways we buy and sell, particularly online. It also takes account of digital goods and services which obviously did not exist when the previous laws were enacted.
Both the Sale of Goods Act and the Supply of Goods and Services Act still exist, and are still in force but how businesses trade with consumers has been brought right up to date, clarified and strengthened.
The main protections afforded to consumers are fairly well known and apply whether or not the seller has any written terms as they are implied by law into any such contract. These implied terms offer cover to the consumer in situations where:
- The seller does not have the right to sell the goods
- The goods bought do not fit the description (if they are sold by description)
- The goods are not of satisfactory quality and fit for purpose
- If the goods are sold by sample, there is also an implied term that the goods bought will correspond to that sample quality.
Similarly, there are also implied terms that any service carried out will be done with reasonable care and skill, within a reasonable timeframe and if there has been no price agreed beforehand, that the price to be paid will be reasonable. Services can include those provided by your solicitor, your builder or your beautician – anyone who provides a service to you for money, basically.
I often smile when I see “this does not affect your statutory rights” on the back of a crisps packet – nothing the manufacturer did ever could affect those rights.
In fact, all these elements of the law are “statutory rights” and inserted by the law into all consumer contracts, whether it’s written or verbal and even if the contract tries to excludes them.
This means that they are entered into a consumer contract regardless of terms that the parties have agreed themselves so that a trader cannot “contract out” of statutory rights and remedies.
There is also a raft of “regulations” and rules that wrap around these laws as well as abundant case law interpreting these laws in certain circumstances. Let’s look at a few particular instances – digital content and second-hand cars – which we all encounter regularly.
With the introduction of the new Consumer Rights Act, came a new provision for digital content, which was not covered in the previous Acts. Under this new Act, it is implied that the Digital Content must be of satisfactory quality, fit for purpose and meets any description that may have been given.
This doesn’t mean that a consumer can download it and simply not like it, but it must not harm the computer it’s been downloaded onto and it must work. Downloads might include, music, books or games.
The protection for the seller is that the consumer cannot exercise a right of cancellation if the product isn’t faulty during any “cooling off period” if they’ve already had the download.
Who hasn’t bought a second-hand car at some point? There are some fantastic deals available – but equally, who hasn’t ended up spending more at a dealership after getting a nasty feeling they have entered a Wild West landscape legally speaking?
Before you head off with a wad of cash in hand to snap up that tempting deal, equip yourself with the key points of the law as it applies to this kind of transaction. The Consumer Rights Act has you covered – up to a point:
The Good News
If your second hand car develops a problem soon after you’ve bought it, there may be a chance to reject it and get a refund.
Under the Consumer Rights Act, you only have 30 days to request a reject and refund on the vehicle (whereas under the Sale of Goods Act, if bought before 30 September 2015, this would have to be done within a reasonable time).
When you buy a second hand car from a dealer, you should expect the car to be of satisfactory quality, fit for purpose and meet any description you were given when buying it.
If any of these are not met, you have the right to request a refund, reject the car, or request compensation in the amount for you to repair the car yourself.
The Slightly Less Good News
However, if you buy a second hand car privately (from eBay, Facebook, local ad etc), you do not have anywhere near as many rights.
There is no legal requirement for the vehicle to be of satisfactory quality or fit for purpose.
However, the rules about misrepresentation do still apply, so if the car is not as described, or the seller tells you something about the car which is not true, the remedies of refund, return and repair are still applicable.
If you do buy a second hand car from a private seller, the onus is on you or, “Buyer beware”.
As a buyer, you should ask as many questions as you can about the vehicle before purchasing, as the seller does not have to volunteer any information to you.
What remedies does the law offer?
When transactions don’t go as expected the law provides for remedies. Both the trader (mainly) and the buyer have rights and responsibilities:
1. The Short-Term Right to Reject
As long as the consumer states to the seller that they wish to reject the goods within 30 days of purchasing, the seller is obliged to provide a refund. However, the consumer must make the product available for the seller to take back
2. The Right to Repair or Replacement
If the consumer requests the seller/trader to repair or replace the item/goods within 6 months of purchase, the seller must do so within a reasonable time and without bearing any inconvenience to the consumer. However, this remedy is only available if it is possible, and as long as it is not disproportionate to other remedies available.
3. The Longer Term Right to a Price Reduction or Final Right to Reject
This is available if, after one repair or replacement, the goods do not conform to the contract (implied terms as above included), because the consumer cannot require a repair or replacement, or on requiring the seller to repair or replace the goods, the seller has not done so within a reasonable time
How we can help you
as a buyer
If you have made an unsatisfactory purchase of goods or services and you believe that the seller has acted wrongly or is refusing to comply with their obligations under the law, contact us for an initial consultation. We’ll review the facts of the case with you and advise you what recourse you have to law to recuperate your losses or force the supplier to honour their commitments.
as a seller
If you sell any sort of goods or services to the general public or to other businesses then you need to be absolutely sure you are complying with the laws that apply to your transactions and are able to fulfil your responsibilities under them.
You also need to make sure that you are protected from excessive liability or from false or malicious claims.
InHouse Legals can help you set up your trading policies and create a bullet-proof Terms & Conditions document that fits your business to a T and ensures both compliance and protection for you as a trader.
If you are wondering how to get started you might like to read our Managing Partner Vanessa’s post, The Planning Pit which has some useful tips and info on how to go about preparing your T&Cs.