The Consumer Rights Act 2015 (“CRA”) reforms and consolidates most law regarding consumer contracts and notices in the UK. It is the most extensive consumer law reform in the UK for a generation.
The Act is split into three parts: Part 1 deals with consumer contracts for goods, digital content and services; Part 2 covers unfair contract terms; and Part 3 contains miscellaneous and general provisions which relate to (amongst other things) duties on lettings agents to disclose fees. The CRA is expected, for the most part, to come into force by 1 October 2015 and only relates to business-to-consumer contracts.
What has changed?
There are 4 distinct sections of the CRA relating to goods, digital content, services and unfair terms, that will impact retailers and their dealings with consumers.
Pre-contractual Information: under the CRA all pre-contractual information about the main characteristics of the goods will form part of the contract.
Statutory Guarantees: the CRA incorporates the implied terms from the Sale of Goods Act 1979 (compliance with description, fitness for purpose and satisfactory quality) with statutory guarantees.
Pre-contractual Information: the CRA gives contractual force to any spoken or written representations and anything that is taken into account by the consumer when deciding to enter into the contract or when making any decision about the service after entering into the contract.
Statutory Guarantees: every contract to supply a service is to be treated as including terms that the trader must perform the service with reasonable skill and care; that (if not agreed) the price will be reasonable and if the contract does not expressly fix a time for performance of the services, that they will be performed within a reasonable period of time. What is a reasonable period of time will be a question of fact. This largely replicates the wording in the Supply of Goods and Services Act 1982.
Statutory Remedies: under the CRA, two tiers of statutory remedy in relation to services are proposed. The Tier 1 remedy provides that the retailer should either redo the element of the service which is inadequate, or perform the whole service again. The Tier 2 remedy allows the retailer to provide a reduction in the charge to cover the element of the service that has not been provided with reasonable care and skill.
Fairness Test: the existing fairness test would continue to apply to all terms of the contract other than the price or subject matter, both of which can be excluded from the application of the fairness test provided they are â€œtransparent and prominentâ€. The prominence test proposed by the CRA is whether the term has been brought to the consumerâ€™s attention in such a way that the average consumer would be aware of it.
Transparency Test: under the CRA, all written terms offered to a consumer must be â€œtransparentâ€ meaning plain, intelligible language and, if in writing, legible.
The â€œGreyâ€ List: the CRA proposes to add 3 new terms to the current â€œGrey Listâ€ of terms presumed to be unfair. These include: disproportionately high charges in the event that a consumer decides not to conclude or perform the contract, or for services which have not been supplied; terms allowing the retailer to determine the characteristics of the subject matter after the contract has been formed; and terms which allow the retailer to determine the price after the contract has been formed.
Published By: Guest Contributor