Consumer Rights Act 2015

Question 1

The Consumer Rights Act 2015 comprises three Parts:

Answer 1

Part 1 deals with consumer contracts for goods, digital content, and services.

Part II regulates unfair terms (in consumer contracts).

Part III is of a miscellaneous and general nature.

This element will analyse sections of Part I, which is of particular significance to contract law.

Question 2

Part I of the Act applies to contracts to supply goods, digital content or services between a ‘trader’ and a ‘consumer’. Define these terms. Who needs to prove what?

Answer 2

• A ‘consumer’ is defined as ‘an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession’.
• A ‘trader’ is defined as ‘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’.

Section 2(4) provides that, where a trader claims that an individual was not acting for purposes wholly or mainly outside the individual’s trade, business, craft or profession, then it is for the trader to prove it.

Question 3

Contracts between a consumer and a business entered into prior to 1 October 2015 are governed by…

Answer 3

…the Sale of Goods Act 1979 or the Supply of Goods and Services Act 1982 and the Unfair Contract Terms Act 1977.

Question 4

Contracts for goods

The cornerstone rights implied in a consumer sale of goods are that:

Answer 4

(a) Goods should be of a satisfactory quality (s 9);

(b) Goods should be reasonably fit for any purpose which the consumer makes known to the trader that the consumer intends to use the goods for (s 10);

(c) Where goods are sold by description the goods should match that description (s 11).

Question 5

Contracts for digital content

Where a consumer contracts for digital content—for example, for an e-book, a game or a music download—which rights does the Act specify to be included?

In line with the provisions for consumer goods, the implied terms are that the digital content:

Answer 5

(a) Should be of satisfactory quality (s 34);

(b) Should be reasonably fit for purpose (s 35);

(c) Should match any description of it given by the trader to the consumer (s 36).

According to s 34(2), the ‘quality of digital content is satisfactory if it meets the standard that a reasonable person would consider satisfactory’.

Such a reasonable person would take account of matters of description and price together with ‘all other relevant circumstances’ (s 34(2)(c)), such circumstances including ‘any public statement about the specific characteristics of the digital content made by the trader, the producer or any representative of the trader or producer’ (s 34(5)).

Question 6

Contracts for services
What are the statutory rights of a consumer under a services contract?

Most importantly, the consumer has a right:

Answer 6

(a) That the service is performed with reasonable care and skill (s 49);

(b) That (where a price has not been agreed) a reasonable price is to be paid (s 51);

(c) That (where a time has not been fixed) the service is provided in a reasonable time (s 52).

In addition, s 50(1) also provides that anything that is said or written to the consumer, by or on behalf of the trader, about the trader or the service is to be included as a term where it is taken into account by the consumer (a) when deciding to enter into the contract or (b) when making any decision about the service after entering into the contract.

Question 7

What are additional remedies under the Consumer Rights Act 2015

Answer 7

Not only does the Consumer Rights Act 2015 imply terms as set out earlier in this element, it also specifies remedies for consumers when those terms are breached.

Unless otherwise stated, these remedies sit alongside the remedies which would be available to the consumer under the general law.

Remedies under contract law generally are not considered in this element, but it makes sense to consider the remedies under the Consumer Rights Act 2015 at this stage.

Again, we will consider the 3 types of contact in turn.

Question 8

What are the three remedial options for contracts for goods?

Answer 8

The Consumer Rights Act 2015 provides that where goods sold to a consumer fail to meet any of the requirements in s 9 (satisfactory quality), s 10 (reasonably fit for their particular purpose) or s 11 (correspondence with description) then the goods are regarded as non-conforming.

Where the goods are non-conforming, there are three remedial options available to the consumer, namely:

(a) The short term right to reject

(b) The right to repair or replacement

(c) The right to a price reduction or the final right to reject.

Question 9

Broadly speaking, the short term right to reject is available to the consumer for…

Answer 9

…30 days running from the time (i) that ownership has passed (or, in the case of contracts for hire or the like, possession has been transferred) and (ii) the goods have been delivered and (iii) in cases where the trader is required to install the goods or to take other action to enable the consumer to use the goods, the trader has notified the consumer that the required steps have been taken (s 22).

Question 10

The right to repair or replacement is available unless…

Answer 10

…repair or replacement is either impossible or disproportionate (in the sense that it imposes an unreasonable cost on the trader relative to the other remedies and the interests of the consumer) (s 23).

Question 11

The consumer is not entitled to both a…

Answer 11

…price reduction and final rejection; and, in either case, the remedy may only be exercised where: (a) after one repair or one replacement, the goods do not conform to the contract; or (b) the consumer can require neither repair nor replacement of the goods (because it is impossible or disproportionate); or (c) the consumer has required the trader to repair or replace the goods, but the trader is in breach of the requirement to do so within a reasonable time and without significant inconvenience to the consumer (s 24).

Question 12

It should also be noted that s 24(10) provides that the general rule is that, where the final right to reject is exercised within 6 months (the clock running—as with the short term right to reject—from the time that ownership has passed, and so on), there should…

Answer 12

…be a full refund with no deduction for use—but this does not apply to motor vehicles or any other goods that may be specified by statutory order.

Question 13

Finally in relation to contracts for goods, it is worth noting that consumers cannot treat the contract as at an end as a result of a breach of a term implied by ss 9, 10 or 11, save to the extent set out in the Act (summarised above). So in one sense, the implied terms are…

Answer 13

…neither conditions or warranties – the extent to which breach gives rise to a right to treat the contract as at an end is set out in the Act.

Question 14

What are the remedial options for Contracts for digital content?

Answer 14

S 42 provides that, where the digital content is non-conforming in breach of the terms implied by ss 34 (satisfactory quality), 35 (fitness for purpose) and/or 36 (matching description), there are two remedial options available to the
consumer, namely:

• The right to repair or replacement;
• The right to price reduction.

Question 15

In relation to these remedies, s 42(9) provides that ‘digital content which does not conform to the contract at any time within the period of six months beginning with the day on which it was supplied must be taken…

Answer 15

…not to have conformed to the contract when it was supplied.’

Question 16

Section 43 elaborates and qualifies the right to repair or replacement in the way that we have seen already in relation to contracts for goods. What do S43(2)a, s43(3), s43(5) state?

Answer 16

s43(2)(a) requires the trader to repair or replace the digital content ‘within a reasonable time and without significant inconvenience to the consumer’;

s43(3) precludes the consumer from requiring repair or replacement where this would be impossible or disproportionate;

s43(5) identifies the nature of the digital content together with the purpose for which the digital content was obtained or accessed as material to judging ‘what is a reasonable time or significant inconvenience’.

Question 17

s 44 qualifies the right to price reduction, this right being exercisable only where the consumer either…

Answer 17

…cannot require repair or replacement (because this is impossible or it would be disproportionate) or where the trader has failed to repair or replace the digital content within a reasonable time and without significant inconvenience to the consumer.

Question 18

Section 45 gives the consumer the right to receive…

Answer 18

…a refund of all money pay for the digital content. A refund must be given within 14 days.

The trader must give a refund using the same payment method that the consumer used to pay for the digital content, without imposing any fee in respect of the refund.

Similarly to the provisions in relation to goods, it is not open to a consumer to treat a contract as at an end as a result of a breach of these implied terms.

Question 19

What is the legal position if non-compliant digital content causes damage to a device or to other content?

Answer 19

According to section 46, where

(a) a trader supplies digital content to a consumer under a contract,

(b) the digital content causes damage to a device or to other digital content,

(c) the device or digital content that is damaged belongs to the consumer,

(d) the damage is of a kind that would not have occurred if the trader had exercised reasonable care and skill, then the consumer is entitled to repair or to a compensatory payment.

Question 20

What are the remedial options for Contracts for services?

Answer 20

Section 54 provides that, where the services are non-conforming in breach of the term implied by ss 49 (reasonable care and skill), there are two remedial options available to the consumer, namely:

(a) The right to require repeat performance;

(b) The right to a price reduction.

Question 21

The right to require repeat performance is elaborated and qualified in ways that are analogous to the parallel provisions in relation to goods and digital content. In particular s55(2)a, s55(4), s55(3)?

Answer 21

• s 55(2)(a) requires the supplier to provide the repeat performance within a reasonable time and without significant inconvenience to the consumer
• (s 55(4) offering the usual guidance on what, for this purpose, is reasonable and significant),

-s 55(3) states that the consumer cannot require repeat performance if completion in conformity with the contract is impossible.

Question 22

According to s 56(3), a price reduction becomes available only…

Answer 22

…where repeat performance is impossible or where the trader has failed to provide repeat performance within a reasonable time and without significant inconvenience to the consumer.

Question 23

Where the services are non-conforming in breach of the term implied by ss 52 (performance within a reasonable time) the remedial option is…

Answer 23

…the right to a price reduction.

Question 24

Example

A consumer buys a kettle from a trader. Within a day or two, it becomes clear that the kettle does not work – it will not switch on. What is the consumer’s legal position under the Act?

Answer 24

The provisions in relation to contracts for goods must be considered.

Clearly, the kettle is non-compliant relative to the requirements in s 9 (satisfactory quality) or s 10 (fitness for particular purpose) or both.

It follows that, in principle, the consumer may (within 30 days) simply reject the kettle and get a refund of the purchase price, or accept a replacement (exchange) or insist on repair (unless it would be impossible or disproportionate).

In practice the consumer is likely to be happy with either an exchange or a refund.

Question 25

Suppose, however, that the consumer does not use the kettle at once (perhaps it has been bought as a spare) and the problem only comes to light when the consumer first uses the kettle, this being at a time when the short-term right to reject is no longer available?

Answer 25

In this scenario, the consumer’s rights are more constrained.

The consumer must first give the trader the opportunity to repair or replace the kettle.

Provided that the consumer is happy with this, and it is reasonable to assume that replacement will be an acceptable option, there is no problem.

However, if what the consumer wants is a price reduction or rejection, this will not be available until the trader has had an opportunity to repair or replace the kettle.

Question 26

What if the goods are more complex than a kettle? For example, what would the consumer’s remedies look like if the goods were a laptop rather than a kettle?

Answer 26

Suppose, for example, that a consumer is convinced that a laptop is faulty but the particular problem is intermittent.

Each time that the laptop goes back for repair, the supplier reports either that no fault has been detected or that the fault has been fixed—but, then, the consumer soon finds that the problem recurs.

Or, again, suppose that the supplier/repairer reports that the problem has been fixed but will not tell the consumer what the fault actually was.

Question 27

Does such a consumer, who no longer has any confidence in the reliability or durability of the laptop, have the right to reject the goods?

Answer 27

The problem with these more complex cases is that their resolution depends not on black and white rules (such as the 30 day rule for short-term rejection) but on standards of reasonableness, proportionality and other equally imprecise concepts.

So, for example, s 23(2)(a) requires the trader to repair or replace the goods ‘within a reasonable time and without significant inconvenience to the consumer’.

Question 28

If the goods under repair are the consumer’s one and only laptop, what would be a reasonable time for undertaking the repairs and at what point would the inconvenience to the consumer be significant?

Answer 28

According to s 23(5) these questions of reasonableness and significance are to be determined by taking into account ‘(a) the nature of the goods;

and (b) the purpose for which the goods were acquired’.

In our hypothetical laptop case, before we can determine what is reasonable or significant, we need to know more about the particular context.

Question 29

Summarise in relation to the Consumer Rights Act 2015

• The CRA 2015 implies the following terms into contracts between traders and consumers:

Answer 29

‒ Contracts for goods: goods will be of satisfactory quality, fit for any particular purpose made known to the trader, and will comply with their description.

‒ Contracts for digital content: the content will be of satisfactory quality, fit for any particular purpose made known to the trader, and will comply with its description.

‒ Contracts for services: the services will be performed with reasonable care and skill, provided in a reasonable time, and (where price has not been agreed) a reasonable price will be paid.

• The CRA 2015 sets out various remedies which are available when these terms are breached. These remedies sit alongside normal contractual remedies, but a consumer cannot treat a contract as at an end as a result of a breach of these terms other than in the manner specifically provided for in the Act.