The Consumer Rights Act 2015
The Consumer Rights Act has made significant changes to the sale of goods landscape, introducing new terms into consumer contracts and new remedies where the seller is in breach.
Goods sold by traders (of whatever age, whether new or second hand) must be of “satisfactory quality”. The following matters are taken into account when determining whether they meet that standard (this list is not exhaustive):
- Their state and condition;
- Fitness for all the purposes for which goods of that kind are usually supplied;
- Appearance and finish;
- Freedom from minor defects;
- Safety; and
Somewhat unhelpfully, given it is somewhat circuitous, the Act says that the quality of goods is satisfactory if they meet the standard that a reasonable person would consider satisfactory. This test takes account of:
- Any description of the goods (including, the official guidance says, what the consumer was told about the goods by the trader or its employees).
- The price paid (or other consideration).
- All the other relevant circumstances.
The courts are now entitled to take into account any public statement (e.g. advertising or labelling) about the specific characteristics of the goods made by the trader, producer/ manufacturer or any representative of theirs have where:
- The trader was not, and could not reasonably have been, aware of the statement at the time when the contract was entered into.
- The statement had been publicly withdrawn or had been publicly corrected.
- The buyer’s decision to purchase contract for the goods could not have been influenced by the statement.
Where an issue affecting the quality of the goods is specifically drawn to the consumer’s attention before purchase, or which ought to have been revealed on an examination of the goods by the buyer (assuming one took place), the seller is not liable if the buyer later claims the goods are not of satisfactory quality for that/ those reasons.
Fitness For Purpose
If the buyer makes known to the trader (whether expressly or impliedly) the reason/ purpose why he is purchasing the goods, the Act says that the goods must be reasonably fit for that purpose (irrespective of whether the goods are usually sold for that purpose).
This does not apply where the consumer did not rely on the skill or judgment of the trader (or it was not reasonable for him to rely on it).
Further Terms of Consumer Contracts
It will be a term of all relevant contracts that:
Sale by reference to a sample or particular model
- Where the buyer purchases goods by reference to a model that they have seen or examined before entering into the contract, the goods must match the model. Therefore, if a customer examines or test drives a car in a showroom, the model supplied must match the model examined (assuming that is what the buyer agreed to purchase of course).
- This does not apply if the buyer was made aware of the differences before entering into the contract.
- Where goods are supplied “by description”, they must match that description. (If goods are sold by reference to a sample and by description, it is not sufficient that the bulk of the goods matches the sample – they must also match the description.)
- Goods will match any pre-contract information required by the Consumer Credit Regulations.
Short-term right to reject
The buyer now has a short-term right to reject the goods. Specifically, if the goods do not conform to the contract (which the buyer has to prove), the buyer may reject the goods within the first 30 days (different rules apply to perishable goods).
The 30 day period can be extended by agreement but cannot be restricted.
If the buyer requests a repair or replacement in the 30 day period, the time period stops running during the “waiting period” while the goods are being repaired or replaced. That waiting period begins with the day on which the buyer requests or agrees to the repair or replacement of the goods, and ends with the day on which they receive the goods back. The buyer then has 7 days in which to reject the goods or, if later, the original time for exercising that right, extended by the waiting period.
Repair or Replacement – “First Tier Remedies”
The buyer also has a right to request a repair or replacement of the goods if they do not conform to the contract. The buyer can select whichever remedy they want, provided they are both possible and one is not disproportionate to the other (if it is disproportionate, the trader must provide the other option unless it is impossible of course). The buyer can request a repair and if that does not work a replacement, or vice versa. (Disproportionate has been defined as imposing costs on the seller which, compared to those imposed by the other remedy, are unreasonable (certain features must be taken into account when determining this)).
If the buyer is not happy with a repair or replacement (or, having tried both, either of them) he then has the option to exercise the “short term right to reject” (if the time limit has not expired (see above)), or, request a price reduction or exercise the final right to reject.
The buyer must allow the trader (who is responsible for the costs) a reasonable time to attempt repair or replace before requesting the other option (or electing to take the short term right to reject) unless to do so would cause significant inconvenience to the consumer (Although it is not specifically stated in the rules, the guidance notes suggest that a replacement would need to be identical, that is, same make and model and if the goods were new, then the replacement should be new).
Partial Refund or Final Right to Reject – “Second Tier Remedies”
The buyer need only accept one attempt at either repair or replacement before choosing whether to take a price reduction or exercise the final right to reject. The same applies if the repair or replacement is impossible, or, it has not been carried out within a reasonable time and without significant inconvenience.
Where the consumer requests that a number of faults be repaired, and these repairs are provided together, this counts as a single repair. Similarly, whilst it is not specifically stated in the Act, it is likely that a single repair may be carried out over more than one visit, without triggering the right to a price reduction or the final right to reject.
The BIS CRA Goods guidance comments that work which may be necessary to identify the fault or the underlying cause of the fault before any repair can be arranged (for example diagnostic work can be carried out in an initial visit or appointment) does not necessarily count as part of the repair.
If a buyer decides to keep the goods following the above:
- The seller must reduce the price by an appropriate amount. In this regard, the buyer has the right to receive a refund of anything paid above the revised price.
- The refund must be made without undue delay and in any event within 14 days and by the same means as the payment was made (unless the consumer otherwise agrees) and the trader cannot charge a fee for making it.
Whilst there is no specific rule, it is anticipated that the reduction should reflect the difference in value between what the consumer paid and the value of what they actually got (it is suggested that if the buyer accepts a reduction in respect of a particular fault, that does not prevent them from pursuing the full range of remedies for any further fault which emerges).
Final Right to Reject
If the buyer exercises the right to finally reject the goods, the trader should refund the purchase price. The trader may deduct a sum from the refund to take account of the use the consumer has had of the goods in the period since they were delivered. However…
…if the consumer exercises the final right of rejection in the first six months, the trader cannot make a deduction for use unless…
… the goods in question is a motor vehicle.
(The deduction should not take account of any time that the goods were with the trader for repair or assessment of the fault).