For most retailers this will mean reviewing existing complaint handling procedures and ensuring customer service teams fully understand the changes before the legislation comes into place. Many of these changes will relate to goods, services and digital content and will address a number of topics. Below are some of the changes that, as a consumer or a business, you will need to know.
- Implied terms that goods will be of satisfactory quality; fit for purpose and as described will still be implied into consumer contracts. The CRA will include terms that may be implied, for example, that goods will match the model that the consumer has seen or inspected before entering into the contract (unless a specific difference has been identified and brought to the consumer's attention).
- Pre-contractual details and information will be affected. Our Newsletter in July 2014 told you about the Consumer Contracts Regulations 2013 which required traders to provide consumers with specified pre-contractual information in certain circumstances. This also included details regarding payment, delivery arrangements and details of after-sales service. The CRA will make pre-contract information an implied term of the contract and consumers will be entitled, if a trader is in breach of the implied terms, to claim for any costs they incur (up to the value paid for the goods).
- Poor installation – if the trader installs the goods, those goods will be deemed to not conform to the contract if the installation is incorrect.
- Consumers will have the “short-term" right to reject goods within 30 days that are faulty or not as advertised (this will be shorter for perishable goods).
- Consumers will have the right to request that faulty or incorrectly advertised goods are repaired or replaced and this will be even after the 30 day right to reject period has expired.
- “Final right to reject” or price reduction – consumers will have the right to a reduction in the price paid for the goods or they can reject the goods after one unsuccessful repair or replacement of the goods.
- The burden of proof will be on the consumer because, if they are seeking to exercise their short term right to reject, they will have to prove that the goods do not conform to the contract. By contrast, goods will be presumed to not conform to the contract if a consumer seeks to exercise their right to a repair or replacement, a price reduction or the “final right to reject” within six months of delivery (subject to certain exceptions).
- Deductions for consumer use – traders may be entitled to make a deduction in respect of any use the consumer has made of the goods before they have exercised their right to reject (in certain circumstances).
Implied terms will still be implied for the supply of services that adhere to the below stipulations:
- the service will be performed with reasonable skill and care;
- the price will be reasonable if not agreed; and
- the service will be performed within a reasonable period if not agreed.
However, under the CRA, anything said or written by the trader to the consumer regarding the trader or the service will be an implied term of the contract. This is because it influences the consumer's decision to enter into the contract as well as their decisions regarding the service after entering into the contract.
If the service is not performed with reasonable care and skill or it does not conform to pre-contractual statements made by the trader, consumers can require the trader to perform the service again to put it right (although there are certain exemptions). A consumer may also request a price reduction in certain circumstances.
The CRA will introduce new specific rights and remedies for digital content such as computer games and downloads.
As far as implied terms are concerned, digital content must be:
- of satisfactory quality;
- fit for a particular purpose; and
- as described.
If not, consumers have the right to a repair or replacement, or a reduction in price.
Consumers can claim compensation if the digital content supplied by the trader damages their electronic device/other digital content (as long as the consumer can show that the trader did not exercise reasonable skill and care when supplied). In this instance, the trader must either repair the damage or pay compensation to the consumer.
What does this actually mean for you?
This CRA brings in a number of important changes that will require all businesses to look at:
- the way in which consumer complaints are handled and ensure that their customer service team is familiar with the changes;
- as pre-contractual details and information may be an implied term, this means that point of sale literature/material provided to assist sales staff must be up-to-date and accurate otherwise this will create compensation claims; cancellation and returns policies;
- limitation of liability clauses in contracts to ensure they are compliant and correctly referencing legislation.
There will be some relevant guidance to assist businesses with preparing for the changes that come from the CRA. We will keep you updated as this piece of legislation progresses.
Whether you are a business or an individual, we can help you with any query you may about this new legislation. Please feel free to contact us - ring, email or simply come in and see us!
023 8064 4822