The Consumer Rights Act 2015: What businesses should be aware of

Year Published: 2018

The Consumer Rights Act 2015 offers protection to consumers when they enter into contracts for the supply of goods, services and digital content. It also offers protection in relation to unfair terms in a contract. As a business owner, it’s important to make sure you’re aware of the ins and outs of the Consumer Rights Act (the Act) in order to avoid potential disputes and minimise the risk of lengthy litigation.

The Act came into force on 1st October 2015 and replaced many of the provisions contained in the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. It applies only to Business to Consumer (B2C) and not Business to Business (B2B). A consumer is defined as “an individual acting wholly or mainly outside of that individual’s trade, business, craft or profession.”

Key provisions of the Consumer Rights Act 2015 to be aware of

Supply of goods:

Every contract to supply goods covered by the Act is to be treated as including a term that the quality of the goods is satisfactory, the goods are fit for their normal purpose and they match any description or sample.

The quality of goods includes their state and condition, and the following aspects (among others) are some of the aspects taken into consideration when disputes over the quality of the goods arise:

  • Fitness for purpose;
  • Appearance and finish;
  • Freedom from minor defects;
  • Safety;
  • Durability.

Supply of services:

When supplying a service, every contract to supply a service covered by the Act is to be treated as including a term that the trader must perform the service with reasonable care and skill. This in effect means a trader must work to the same standard as any reasonably competent person in that trade.

All services have to be provided at a reasonable price if no price has been agreed, and within a reasonable time period if there is no specific time agreed.

Supply of digital content:

Every contract to supply digital content is to be treated as including a term that the quality of the digital content is satisfactory. Also, the digital content must be as described and fit for purpose.

Under the Act, the quality of digital content includes its state and condition, and the following aspects are in appropriate cases aspects often taken into consideration when assessing the quality of digital content:

  • Fitness for purpose;
  • Freedom from minor defects;
  • Safety;
  • Durability.

Beware of including unfair terms in a contract:

In accordance with s62 of the Act, an unfair consumer notice is not binding on the consumer. But what is classed as an unfair term?

When deciding this, the Act applies a fairness test. Typically, a term or notice will be considered unfair if, contrary to good faith requirements, it causes a significant imbalance in the rights and obligations of the trader and the consumer, to the detriment of the consumer.

In addition, certain exclusions and limitations of liability will automatically be non-binding on the consumer. For example, a term which excludes or limits a trader’s liability under any of the statutory quality standards that apply under the Act, or a term that excludes or limits any of the statutory remedies available to consumers under the Act.

If a consumer complains to the Financial Conduct Authority (FCA), then action may be taken to consider the fairness of the term in question if the term or notice is within its scope.

Remedies under the Consumer Rights Act 2015  

The Act sets out the statutory remedies available to a consumer when there has been a breach of the consumer’s statutory rights.

Supply of goods:

A consumer has:

  • a short term (30 days) right to reject the goods for a full refund;
  • the right to one repair or replacement within the 30 days;
  • thereafter, the right to a price reduction or the final right to reject and receive a refund in some situations.

Supply of services:

If services are supplied but not within a reasonable time, or at a reasonable charge or to a reasonable standard, depending on the problems, a consumer has:

  • the right to have the services repeated;
  • the right to a price reduction.

Supply of digital content:

A consumer has the following remedies available depending on the problem with the digital content:

  • the right to repair or replacement;
  • the right to a price reduction;
  • the right to a refund (no need to return the data by deleting it).

Other laws to be aware of:

The Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 have not been repealed and still apply to contracts for the sale of goods and the supply of services outside a consumer context (e.g. private sales and B2B transactions). They also offer protection for any goods and services bought on or before 30 September 2015.

In short, the Sale of Goods Act 1979 requires all goods that are bought or sold to be as described, of satisfactory quality and fit for purpose. The Supply of Goods and Services Act requires that the work would be carried out with reasonable care and skill, in a reasonable time (if no specific time agreed) and for a reasonable charge (if no fixed price had been agreed).

As you can see there are many rules and regulations to be aware of when writing contracts for consumers and it’s vital to make sure you avoid the pitfalls. If you do find yourself in a dispute, then taking legal advice early on can often save you costs, time and minimise the risk to your business.

For more information and advice relating to the Consumer Rights Act 2015 and how it may affect you or your business, please contact our Dispute Resolution team on 0161 475 7676.

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