October 1, 2015
A background to the new Act
Consumer law will be subject to significant change with the introduction of the new Consumer Rights Act 2015 (the CRA). The CRA comes into force on 1 October 2015 and all purchases from this date onwards will be governed by it.
The consumer’s rights in relation to the sale of goods and unfair terms remain mainly the same as under the earlier legislation, but are clarified and enhanced in places. New consumer remedies have also been introduced.
The CRA is divided into three parts:
- Part 1 deals with consumer contracts for goods, digital content, and services;
- Part 2 deals with unfair terms;
- Part 3 contains miscellaneous provisions, including enforcement powers.
The main changes are associated with Parts 1 and 2.
A summary of the changes
It is important to note from the outset that the following pieces of legislation will cease to apply to contracts concluded after 1 October:
- Most of the Sales of Goods Act 1979 (the SOGA);
- Supply of Goods and Services Act 1982 (the SGSA), in relation to consumer contracts;
- Unfair Contract Terms Act 1977 ( the UCTA);
- Unfair Terms in Consumer Contracts Regulations 1999 (the UTCCRs).
With regards to Part 1 of the CRA, certain provisions of the SOGA will continue to apply to contracts for goods and services. In particular, it continues to be the case that all products must be of satisfactory quality, fit for purpose and as described.
For the first time, consumer law relating to digital content has been introduced. Previously, intangible digital property was not considered to be a good and so, for example, a song purchased online was not subject to any provisions of the SOGA.
The consumer will now have a right to demand a working version of faulty digital content, whether that is granted by way of repair or replacement, or to a refund without undue delay. The CRA defines digital content as ‘data which are produced and supplied in digital form’.
Another significant change arises in relation to remedies available to the consumer. Part 1 of the CRA introduces a new tiered remedy system:
- A short term right to reject -
A 30 day period is now afforded to the consumer, within which they may reject faulty goods. This period can be extended by agreement between the trader and consumer but it cannot be reduced. This right does not apply to digital content.
- Repair or replacement -
If the consumer is outside the 30 day right to reject and has had the goods for up to six months, they will be required to provide the trader with one opportunity to repair or replace any goods/digital content which are of unsatisfactory quality, unfit for purpose or not as described. The consumer can choose whether they want the goods to be repaired or replaced. The trader should fulfill the repair or refund within a reasonable period of time.
- Right to price reduction or final right to reject -
If the attempt at a repair or replacement is unsuccessful, the consumer is then entitled to a higher tier remedy of a refund or price reduction, if they wish to keep the product.
If the consumer discovers the fault within the first six months of delivery, it will be presumed to have existed from the time of delivery. The onus will be on the trader to prove otherwise.
In instances where the consumer has been in possession of the goods for longer than six months, the onus is on the consumer to prove that there was a fault at the time of delivery.
Part 2 of the CRA brings change to unfair terms in contracts. In particular, the key elements of a contract, including price, may be assessed for fairness unless they are transparent and brought to the consumer’s attention. Previously, the terms were merely required to be in ‘plain language’.
The main purpose of the new CRA is to consolidate the majority of the previous legislation into one single statute. However, it is important to take note of the above changes introduced by the CRA. Businesses should strive to revise their standard terms and sale documents accordingly.