Consumer Protection (L16) Flashcards
What does the Consumer Rights Act 2015 set out?
Part One:
- Consumer contracts for goods, digital content and services.
Part Two:
- Consumer protection from unfair contract terms.
Part Three:
- Miscellaneous and general provisions, including competition law.
Who is a consumer?
Defined in CRA 2015 s2.
“An individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or professions.”
Consumers are “natural persons”.
What is a trader?
Defined in CRA 2015 s2.
“A person acting for purposes relating to that person’s trade, business, craft or profession”.
Including agents and subcontractors acting in the trader’s name.
Includes legal persons, such a companies and partnerships.
Includes Government Departments (s2(7)) and “not-for-profits”.
What rights are set out in the CRA15?
Part One: Contracts for goods, digital content and services.
Right to get what you pay for.
- All information about the main characteristics of the goods form part of the contract (including adverts).
Right against faulty goods.
- 30 day right of rejection, right to reject after one unsatisfactory repair.
- Digital content must be fit for purpose.
Right to traders performing services with reasonable care and skill within a reasonable time.
Right to ask for repeat performance.
Right to price reduction.
What contracts are covered by the CRA15?
Part Two.
Consumer contracts.
- Contracts between a trader and a consumer.
Consumer notices.
- Contractual and non-contractual consumer notices.
EMPLOYMENT CONTRACTS ARE NOT COVERED.
Which statutes protect which groups in terms of contracts?
Prior to Oct 2015:
Unfair Contract Terms Act 1977 governed exclusion causes in ALL contracts.
Unfair Terms in Consumer Contracts Regulations 1999 provided additional protection.
NOW:
CRA 2015 - consumer contracts.
UCTA 1977 - NO REFERENCE TO CONSUMERS but still applies to business to business contracts.
Unfair Terms in Consumer Contracts Regulations 1999 - REPLACED.
How is fairness defined in the CRA?
Consumer contracts must be FAIR.
- Only fair contracts are binding on consumers (s62).
There is a duty on the court to consider the fairness of a term (s71).
Definition of an unfair term (s62(4)):
- “A term is unfair if, contrary to the requirements of good faith, it causes a significant imbalances in the parties’ rights and obligations under the contract to the detriment of the consumer.”
Good faith is undefined in the CRA? What is the authority for it?
Director General of Fair Trading v First National Bank [2002] 1 AC 281.
- FNB set its own interest rate of repayments of loans when a customer defaulted, rather than the usual practice of using a lower rate. Customers challenged term. Held to be fair.
“Connoted fair and open dealing, which required terms to be expressed fully and clearly, without hidden pitfalls and with appropriate prominence being given to matters which might operate disadvantageously to the customer, and required the supplier not to take advantage, deliberately or unconsciously, of factors indicative of the consumer’s weaker bargaining position.”
What are the factors to consider when determining fairness, as set out in s62(7) of the CRA?
The specific circumstances existing when the term was agreed (formation).
Other terms in the contract.
The nature and subject matter of the contract.
What are the further considerations to the fairness test under the CRA?
s63 sets out a provision for various considerations regarding the fairness test.
‘The grey list’ is provided in Part 1 of Sch2 of the CRA. Sch2 is an indicative list. Non-exhaustive.
The terms set out on the list are not automatically unfair, but an assistance to the court.
What is the exclusion for the CRA fairness test, set out in s62(7)?
Terms specifying the main subject matter of the contract (i.e. what is being sold).
OR
Assessment of the appropriateness of the price payable.
EXCEPTION - THE PROMINENCE TEST. MUST BE BOTH:
- Transparent: In plain and intelligible language. Legible.
- Prominent: Brought to the customer’s attention in such a way that the average customer, who is well informed, observant and circumspect, would be aware of the term.
What was the issue in Office of Fair Trading v Abbey National plc [2009] UKSC 6?
Banks arguing that charging customers for going into overdrafts was not penal.
Banks argued that spending money beyond overdraft was a breach of contract.
Court agreed.
Main subject matter and price to be narrowly construed. Price cannot be assessed for fairness.
What was the issue in ParkingEye Ltd v Beavis [2015] UKSC 67?
Beavis parked his car at Chelmsford Railway Station. ParkingEye had been contracted by the owner of the carpark to carry out a “traffic space maximisation scheme”. Amounted to fine. The clause was clearly displayed on 20 signs in the car park. Overstayed and was fined.
He did not argue incorporation, but that the fine was an unenforceable penalty, or failing that, unfair.
Held (Lord Toulson dissented): Not penalty, nor unfair. ParkingEye had a legitimate interest; Charge not excessive; Reasonable motorist would have agreed to it.
How does the CRA exclude negligence?
s65: trader cannot, in a consumer contract, or a consumer notice, limit liability for death or personal injury resulting from negligence.
Other loss or damage, the trader can only limit liability if the clause is “fair”.
Return to the fairness test! (s62).
What does s69 of the CRA set out?
Interpretation:
If ambiguous, interpretation must be the one most beneficial to the consumer.
Conferatur: contra proferentem.
