Quick Reference Guide to the Consumer Rights Act What is the Consumer Rights Act 2015? Harmonisation of definitions

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1 Local National International Quick Reference Guide to the Consumer Rights Act 2015 What is the Consumer Rights Act 2015? The CRA provides consumers with minimum rights in contracts for goods, services and digital content. It consolidates and reforms the current law and represents the most extensive consumer law reform in the UK for decades. As a business, it is important to be aware of how the CRA is relevant to you so you can make the changes needed to your terms and conditions. Harmonisation of definitions Trader: a person acting for purposes relating to that person s trade, business, craft or profession, whether acting personally or through another person acting in the trader s name or on the trader s behalf Goods: any tangible moveable items, but which include water, gas and electricity only if supplied in a limited volume or set quantity Consumer: an individual acting for purposes which are wholly or mainly outside that individual s trade, business, craft or profession

2 Sale of goods As with the Sale of Goods Act, the CRA requires goods to: be of satisfactory quality be fit for purpose comply with their description N.B Pre-contractual information given to a consumer will now form part of the contract. A New, tiered system of remedies for faulty goods 1: First Tier Short term 30 day rejection period Right to reject faulty goods within 30 days can be extended but not reduced consumer is entitled to a refund without undue delay within 14 days If the consumer requests a repair or replacement, the 30 day rejection period is paused for the period of waiting and the time limit for the right to reject is extended 2: Second Tier Right to request repair or replacement Not limited by time Trader only has one attempt to repair or replace the faulty goods Trader must repair or replace goods at its own cost, within a reasonable time without significant inconvenience to the consumer Cannot be enforced if repair or replacement is impossible or the costs of doing so are disproportionate to other available remedies. 3: Third Tier Price reduction or final right to reject Consumers entitled to a price reduction or final right to reject faulty goods if: repair or replacement is impossible; trader s attempt at repair fails; faulty goods are not repaired or replaced within a reasonable time and without significant inconvenience; or first replacement is also defective. Price reduction can be up to the full price paid After 6 months, the trader may reduce any refund based on the period of consumers use 4: Right of partial rejection Available in both short term and final right to reject tiers in an order, the consumer may reject some or all of the goods which do not conform with the contract but not those parts of the goods which do

3 Supply of services In contracts for the supply of services, the following terms are implied: The service must be performed with reasonable care and skill; The consumer must pay a reasonable price for the services; and The trader must perform the services within a reasonable time. New specific remedies for breach of contract Where a service is not performed with reasonable skill and care the trader has breached a term which relates to the performance of the service, the consumer may require repeat performance of the service or if that is impossible or not done in a reasonable time, the right to a reduction in price. A consumer also has the right to a price reduction when the services are not provided within a reasonable time where there has been a breach of a voluntary statement which does not relate to the service Unfair terms A contractual term in a consumer contract is unfair if contrary to the requirements of good faith, it causes a significant imbalance in the parties rights and obligations to the detriment of the consumer Terms which specify the main subject matter of the contract or the price, are not subject to this test of fairness providing they are: Transparent in plain, intelligible language and if in writing, legible; and Prominent brought to the consumer s attention in such a way that the average consumer would be aware of the term All written terms of a consumer contract must be transparent. N.B Unfair terms are not binding on consumers but the consumer may choose to rely on them.

4 Digital content The CRA provides new rules on the rights and remedies for digital content. Digital content: goods produced and supplied in digital form and goods which contains digital content. The rules apply to: Digital content a consumer has paid money for; Digital content supplied free with goods, services or digital content which a consumer paid money for; and Digital content paid for by way of virtual currency or a gift voucher. Data supplied must comply with the standard expected from goods: Satisfactory quality Fit for purpose Comply with description There is an implied term that the trader has the legal right to provide/sell the digital content to the consumer. Remedies for faulty digital content No right to reject Right to a refund if the trader does not have the right to provide digital content For all other breaches, a consumer has the right to: repair or replacement; or if above is not possible, or does not resolve the fault, the right to a price reduction (up to the full price paid). A consumer is also entitled to compensation for damage caused to a device or other digital content if that damage would not have occurred if the trader had exercised reasonable skill and care. A consumer can require a trader to: Repair the damage within a reasonable time and without significant inconvenience to the consumer; or Compensate the consumer with an appropriate payment.

5 Summary Things to do: Review and amend your terms and conditions to ensure that they comply with the CRA Make your employees aware of the key terms of the CRA, especially customer facing employees If you are unsure whether your terms and conditions are compliant or you are not sure how to deal with a consumer complaint, always seek advice This guide has been produced to address the main provisions of the CRA. For further advice and assistance relating to compliance with the Consumer Rights Act For more information please contact Charlotte Avery cavery@hcrlaw.com With you every step of the way Offices at: Birmingham Cheltenham Hereford Thames Valley Worcester Wye Valley By appointment: London Top Ranked 2015