A Guide to The Sale and Distribution of Goods

Under the Consumer Rights Act 2015, you must meet your obligations when a consumer purchases goods from you.

This information is for England and Wales.

The Consumer Rights Act of 2015 is a piece of legislation that governs the supply of items to customers. The Act applies to all contracts in which goods are provided, whether by sale, hire, hire-purchase, or work/materials agreements. The supply of services and digital content is also governed by the Act.

This is a summary of the rights and duties that arise when a supplier delivers items to a client. It addresses issues frequently encountered by merchants about their responsibilities towards individual customers.

What exactly is a trader?

You are a trader if you operate on behalf of your trade, business, craft, or profession.

A person might refer to more than one individual, such as if your firm is a partnership of two or more people. A corporation, a charity (or other not-for-profit organization), a government department, a local authority, or a public authority can also be referred to as an entity.

If you authorize another person to act on your behalf or in your name, you are still responsible for any contracts - for example, if you employ individuals to make offers for automobiles sold to your consumers or subcontract with someone else to supply labor when constructing a wall.

What exactly is a consumer?

For this guide, a consumer is someone who, in their interactions with a trader, is primarily engaged in non-commercial or business activities. The law does not consider someone who presents themselves as a business (for example, by purchasing goods for personal use from a trade outlet on a trade account) to be a consumer.

Furthermore, when purchasing second-hand items at a public sale where participants can attend in person, an individual is regarded as a consumer in only some respects.

It is for the trader to establish this if the buyer claims to be a consumer and that their rights are therefore restricted.

The formation of a contract

The contract

Both parties to a transaction entered into a contract when a customer purchases goods from a vendor. A contract is defined as an agreement between two or more people that is intended to be legally enforceable. In addition to provisions agreed by the parties, the law dictates minimum requirements for consumer contracts.

For a term to be enforceable, it must be clear that it is part of the contract and lawful. Terms inserted into a consumer's agreement after it has been formed (for example, terms printed only on the back of a receipt) are not incorporated into the agreement and have no legal effect.

A contract does not need to be in writing, but it is a good idea to write down essential conditions to avoid any disputes later on.

A breach of contract occurs when a party to a contract fails to adhere to the stipulations in the agreement. The individual committing the infraction is generally obligated to take some action to remedy it.

What is the procedure for signing the contract?

A contract is formed by agreement (consisting of an offer and acceptance). At least two people are necessary (such as the trader and the client). The situation is that one of them (the offeror) makes an offer, which the other (the offeree) accepts. An offer is a statement of intent to a contract made to become enforceable as soon as acceptance by the offeree.

When a trader shows (or advertises) products, he or she is generally offering customers an "invitation to treat." The consumer may then make an offer to purchase the items. At this point, the trader is not required to accept the offer; a contract is formed when he or she does.

Sometimes, the transaction takes place in reverse - that is, the trader makes an offer to the customer, and a contract is formed when the consumer accepts it.

Under the agreement, the consumer agrees to pay a price for the goods and/or perform another action in return for those items. In the contract, 'consideration' refers to the trader's promise to provide goods for a fee. There is no contract if there is no consideration (that is if a vendor offers to deliver items without charge or other duty).

What happens if the consumer decides to reverse their decision?

Normally, a consumer does not have the automatic right to cancel a contract; as a result, if they do so, they violate the agreement. In certain circumstances, however, there is an automatic right to cancel. Most consumer contracts made at a distance (for example, by mail order or online) or at a consumer's home fall into this category. The Consumer Contracts Regulations 2013 (below) govern this issue.

If a consumer terminates the contract in error, the trader can claim for any expenses incurred. If a trader is unable to recoup the lost sale (for example, by selling the item to someone else), they may be entitled to compensation as well. If the consumer has made the full or partial upfront payment, the trader can only keep enough to cover those losses and must return the difference.

What the consumer can anticipate (statutory rights)

The Consumer Rights Act 2015 creates certain requirements for every transaction in the sale and supply of goods (including hire purchase, hire, part exchange, and contracts for work and materials).

If you're buying or selling items, the seller or buyer must have the legal authority to do so and the articles must:

  • be of satisfactory quality. The goods must be of a quality that a reasonable person would deem acceptable. In assessing quality, all relevant elements must be considered, including cost, description, and the manufacturer's advertising. The quality of a website is determined by many facets, such as:
  • For all the purposes for which similar items are generally supplied,
  • appearance and finish
  • Freedom from minor faults
  • safety
  • durability
  • be fit for a particular purpose. When a consumer states that goods are required for a certain purpose, or when it's clear that items are intended for a specific use and a vendor supplies them to fulfill that need, the things should be suitable.
  • matching the description, sample, or model. When a consumer relies on a description, sample, or display model, the goods supplied must conform to it. If the items don't match, a crime may have been committed.
  • correctly installed, Once the condition of one or more surfaces has been verified, installers will begin work.

Find out more about consumers rights

Methods of dealing with a breach

The right to reject for a limited period

If the items do not satisfy the demands above, they have a strict deadline by which to return them. Unless the expected life of the items is shorter, as with highly perishable products, a 30-day short-term right to reject goods applies. The 30-day period does not begin until the consumer acquires (or, in the case of hire, hire-purchase and conditional sale, has possession) of the goods and they have been delivered.

Finally, if the trader has agreed to do anything else to the goods (for example, install them), the 30-day period does not begin until this is completed. However, if the only breach is that the products have been installed incorrectly,

If the consumer asks for or agrees to a repair or replacement within the first 30 days, the time is paused so that he or she has the rest of the month (or seven days, whichever is longer) to confirm whether the repair was successful and whether to reject the goods.

When a client rejects items, they can get a refund (which might include the return of things handed over in exchange or part-exchange). This would be a complete refund, or in the case of hire, a refund for any portion of the hire paid for but not provided. They are also free of all remaining obligations under the contract, such as outstanding payments on a hire purchase agreement. A refund must be provided without delay and, at a minimum, within 14 days after the trader agrees that the consumer is entitled to one. In certain circumstances (for example, where the exchanged items have already been sold), a refund cannot be obtained under the Act, however, the consumer may seek compensation for any losses incurred.

Where the consumer is sending something back to the store where they purchased it, the trader is responsible for the reasonable cost of returning the goods. Consumers are not required to return the items to this location, however, unless it was agreed upon during the purchase. The consumer may be able to reclaim some or all of that money if the items are returned to the store - for example, if a car breaks down and the customer must pay for a recovery service to get it back.

Replacement or repair

If a consumer breaches their agreement without receiving or refusing to accept the product, they are entitled in the first instance to claim a repair or replacement.

When a repair or replacement is claimed, the trader must perform it for free to the consumer, promptly, and without causing any inconvenience.

The consumer is not free to pick one of these choices above the other if the initial remedy is either infeasible or out of proportion with the alternative option. In addition, once a solution has been selected, the consumer must wait a reasonable amount of time for it to be supplied by the seller.

Remedies are ineffective if, after one attempts to repair or replace the goods, they still do not meet the standards. The consumer is not required to give the merchant numerous opportunities to repair or replace items; however, they may do so if they choose. If the remedies are not given within a reasonable amount of time and with minimal inconvenience to the buyer, they will be ineffective.

If repair or replacement fails, the buyer is entitled to more repairs or replacements, a price reduction, or the right to reject. It's the same if repair is impossible or excessive from the start.

The optional right to reject is known as a reduction.

If a repair or replacement is not feasible, if it is not provided within a reasonable period, or if the consumer refuses the goods for any reason, he or she can demand a reduction in price or cancel the purchase.

The consumer may, if repair or replacement fail, are unavailable, or were not provided within a reasonable time and without causing significant inconvenience to the consumer, choose whether to keep the goods or return them. If the goods are kept, their complaint will be for a price reduction; if they return them, it is a rejection of them.

The reduced amount must be a fair price, which will vary depending on the circumstances of the claim. It can range from zero to full cost.

If the consumer refuses the products, they are entitled to a refund. This refund may be reduced to reflect how much time the consumer spent with the goods. However, because the trader has delayed in collecting them, no reduction can be made for having the items simply because of this. A deduction cannot be taken for rejected products that have been supplied within six months of the purchase, except in the case of a motor vehicle.

Additional compensation

Customers who are unhappy with the remedy they choose or end up with may be able to claim compensation for any losses that have been incurred. The expense of any property damage caused by the products, compensation for personal injury, and compensation for the extra expenditure of acquiring comparable items if they are more expensive elsewhere is a possibility.

The Burden of Proof

If the consumer elects to repair, replace, reduce the price, or consent to a decision by default, and if the problem is discovered within six months of delivery, it is assumed that the fault was there at the time of delivery unless the trader can prove otherwise, or unless this assumption is inconsistent with the circumstances - for example. The burden of proof should be reversed, according to the nomenclature utilized by the court. This rule is sometimes known as the "reverse burden of proof," since it reverses the usual rule that a person making a claim must prove each element of that claim.

If more than six months have passed since the purchase, the buyer must show that the flaw was present at the time of delivery. If they exercise their short-term right to reject items, they must also demonstrate that the fault was there at the moment of delivery. In some cases, latent or hidden faults do not surface until after delivery, and in these situations, it is sufficient to show that there was an underlying or concealed fault at the time.

Exceptions are only applicable when the consumer is unable to submit a claim.

A consumer can't sue for flaws that were brought to their attention before the sale, or if they looked at the goods before purchasing and should have seen them.

A consumer cannot make a claim for damage they do to the goods or for simply changing their minds about wanting them.

A consumer cannot claim if they purchased a product for a purpose that was neither obvious nor made known to the vendor and then discovered that it is unsuitable. A trader may not claim the cost of a product that is made for tree-felling if a consumer purchases one and breaks it while trying to cut down a tree.

There is no legal right for a consumer to claim damages incurred as a result of normal use or wear and tear.

Court action time limits

Consumers can expect goods to function properly for a long time, even if the typical life expectancy of those items is several years. There is, however, a time limit that prevents consumers from proceeding through the courts to make a claim.

A customer can typically bring a lawsuit no more than six years after the breach of contract (usually the date of delivery in a contract for the sale of goods).

This does not imply that all items must survive for this length of time, but the statute gives a customer twenty years to pursue legal action after discovering deceptive advertising or sales.

Terms for Unfair contract

The Consumer Rights Act of 2015 protects consumers against unfair contract terms. Please see "Unfair contract terms" for more information.

Furthermore, any attempt to mislead customers about their rights constitutes an infraction under the Consumer Protection from Unfair Trading Regulations 2008. For more information on these regulations, see "Consumer protection from unfair trading."

There are additional regulations that apply to consumer agreements.

The 2013 Regulations on Consumer Contracts (Information, Cancellation, and Additional Charges)

These rules state that a consumer has a 14-day cooling-off period for most 'distance contracts' (those made over the internet etc) and 'off-premises contracts' (those made, for example, at home). Traders must also provide consumers with certain information, such as for off-premises agreements and when customers agree on the trader's place of business. Traders are not permitted to impose hidden fees, and any extra costs must be authorized by the consumer explicitly.

Damage or loss in transit

The goods remain with the trader until they are delivered to a consumer, even if they are transported or handled by someone else. As a result, it is the responsibility of the trader to make sure that items aren't lost or harmed during transit and/or to obtain appropriate insurance coverage.

Misrepresentation

A misrepresentation is an incorrect statement of fact made by a person or their representative that causes someone else to enter into a contract with them.

If a party has relied on misrepresentation and the misrepresentation was made fraudulently, negligently, or innocently, that party is entitled to have the agreement rescinded (which means unwound or terminated), refunded, or compensated.

The Unfair Trading Regulations of 2008 provide consumer protection against unfair trading.

The Regulations give consumers another alternative avenue of redress. When a trader uses deceptive or aggressive sales tactics, the consumer may be entitled to compensation, as well as a price reduction or cancellation of the contract.

The Department for Business, Energy, and Industrial Strategy (formerly the Department for Business, Innovation, and Skills) has published consumer rights guidance under the Regulations: Misleading and Aggressive Commercial Practices: New Private Rights for Consumers.

The Consumer Protection Act of 1987 (Part 1)n

This legislation enables consumers to sue if they are harmed by a faulty product. A claim may be filed against anybody in the supply chain, from manufacturer/importer to shop owner, depending on the circumstances.

Compensation may also be claimed under the Act for bodily harm to a person's personal property, as long as it was not caused by an outside source.

The Contracts (Rights of Third Parties) Act of 1999 protects the rights of third parties.

The law of contracts protects those who intended to take advantage of the transaction. For example, if someone purchases a gift for a friend and it is discovered that it is defective, either the receiver or the buyer of the gift can pursue a breach of contract claim (as long as this was stated at the time of purchase). Contract provisions may be used by traders to limit the rights of third parties, but in practice, it will usually be simpler (and provide a more pleasant experience for customers) to deal directly with the receiver of a present.

The trader's identifying information

The consumer must be able to identify or discover the identity of their business. On company stationery, on websites, and in business records, a trader's name and address must be visible. This data must also be made available to customers before they sign a contract and whenever they request it.

If a trader fails to disclose that they are a limited company, and there is subsequently a breach of contract, the consumer might be able to sue the firm's directors as individuals. If a trader does not disclose that they are representing someone else, the consumer can make any claim directly against them.

For more on sale and supply of goods, see businesscompanion.info

FAQS

Q. Is it the trader's responsibility to check for faults and return faulty items, even if a consumer does not produce a receipt?

A. There is no legal duty for the customer to give or produce a receipt. If the trader does not recall the consumer purchasing the item, they may request proof of purchase from them. This might be a credit card voucher, cheque stub, or anything that specifies when and where the product was purchased.

Q. Is it okay for the trader to give the consumer's contact information to the manufacturer? Is there a guarantee from the manufacturer that may be used by the trader?

A. The consumer's statutory rights are with the trader who sold them the goods, and the guarantee given by the manufacturer is in addition to those rights. Consumers have the option of pursuing either the trader or manufacturer and neither may refuse them their rights nor direct them to the other. The trader, on the other hand, might have claims against their supplier.

Q. If a trader sells old or second-quality items, shouldn't the buyer be able to exercise rights against the trader that they would if new or perfect goods were acquired?

A. When comparing the same rights, regardless of whether they're in the sale or sold as seconds, it's important to consider several factors. When assessing the degree of quality that is acceptable, however, factors such as price, age, and readily discernible flaws would be considered.

Q. What is the difference between a quote and an estimate?

A. Quotations are generally set prices, whereas estimates are often a rough estimate of the goods' price.

Q. Is it possible for a trader to put up a sign in their shop stating that refunds are not granted under any circumstances?

A. It's against the law to try to ban a customer's statutory rights, so a "no refunds" notification is out of the question. A company may wish to offer consumers who change their minds an exchange or refund policy beyond what the legislation requires. A notice giving information about such a policy may be posted by the trader, but it is recommended that they contact their local trading standards office for assistance on how to write the notice.

Q. A consumer calls a trader to report that the expensive television they purchased in the trader's store the previous week is faulty and asks them to pick it up. Can the trader force the customer to return it?

A. A consumer agreement may even demand that a buyer return defective items. The cost of returning products to the place of delivery is shouldered by the trader, in addition to the consumer's expenses in returning to their original destination. So, if the buyer picks up the TV from the store and agrees to return it if they reject it, the merchant can insist that they return it. If there is no mention of returning items in the contract, they must only make them available for collection (but if they take them back themselves, they cannot charge the trader).

Q. A consumer receives a credit note from a trader but can't discover anything they want. Is the trader required to offer a refund and for how long must the credit note continue? Can a business provide a credit note rather than cash?

A. If a customer returns items that do not match the agreement, the trader is unable to demand that they take a credit note. The consumer has the option of demanding a refund via cash (or its equivalent) or using the initial payment method. If a trader has a goodwill return policy that states that if the customer changes their mind, they will get a refund, the consumer is entitled to this promise. A consumer who has been misled or forced into accepting a credit note when he or she does not have to can still ask for money instead of the substitute option. A credit note is a debt instrument used by merchants to allow consumers who do not have a legal right to a refund or who have made an informed decision against exercising this right. If the trader informs the consumer of this period at the time of issue, they may decide whether or not to accept it.

Q. A customer demands a replacement for an item that is no longer available, yet the company does not have any in stock.

A. A trader may give the client a repair, a price reduction, or even allow the consumer to return the goods. Only if this does not cause significant hardship will a repair be accepted.

Q. When an item is defective or has failed due to misuse, a trader cannot tell whether it is broken or if it has simply lost its usefulness. What should they do?

A. If a consumer wants to use the short-term right to reject goods, they must show that the fault is not due to misuse. It is up to the trader to show misuse if a consumer requests a repair or replacement (or if these fail, a price reduction or refusal) within six months of delivery. After six months, the burden is on the buyer. In any case, if the trader cannot agree on the source of the problem, he or she may seek a second opinion - for example, from the manufacturer or an independent expert. The consumer and vendor should mutually consent to have an independent expert utilized in writing where this is going to be done.

Q. Is a consumer allowed to cancel a contract if the trader fails to deliver items on time?

A. Yes; if the consumer has made it clear that delivery within the agreed time was important, or if this is evident from the facts of the contract (for example, flowers ordered for a wedding) and the trader has failed to comply. As a result, the consumer may treat this as a breach of contract, which allows him or her to cancel the agreement.

Contracts for the sale of products or services together with digital content

In many instances, a commercial contract between a buyer and a seller will not just cover products but may also include services and/or digital content. The Consumer Rights Act explains how the various parts operate together.

Summary of Consumer Rights

To help businesses and customers comprehend the changes, BEIS worked in tandem with industry and consumer organizations to create a simple English version of the Act's key provisions. This consumer rights summary is not meant to be a comprehensive guide to consumer rights, but rather a brief overview of the most important consumer rights, with an emphasis on the most prevalent concerns.

You are not required by law to provide this information, although it may assist you in making things more clear for your consumers and employees. The information sheet's structure is simple, and you may wish to modify it to meet your company's needs, for example by including a returns policy that extends on the law (perhaps replacing 'goods' with a term for something you sell). The phrases are technically correct, and they provide your customers' rights, so we recommend that you modify or add to them rather than deleting or changing the wording given.

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