Implied terms under CRA 2015

Consumer Rights Act 2015

Definition (AO1)

1. Applies to consumer contracts - Between consumers and traders

2. Implies terms into consumer contracts for:

   • Supply of goods

   • Supply of services

   • (Also supply of digital content)

3. Provides specific remedies for breaches by trader of implied terms - for benefit of consumer

4. Regulates application of exclusion / limitation clauses in consumer contracts

5. Derives from:

   • UK legislation

   • EU legislation

   • Law Commission proposals.

Consumer Contract for Supply of Goods

Consider (AO2)

1. Consumer contract for the supply of goods

2. Implied terms:

   • Goods of satisfactory quality

   • Goods reasonably fit for a particular purpose

   • Goods correspond with any description

3. Remedies for breach of implied term

Consumer Contract for Supply of Goods - Section 1

Definition (AO1)

An agreement between a trader and a consumer for the trader to supply goods.

Contract may be:

• Written

• Oral

• Implied from parties’ conduct

Consumer Contract for Supply of Goods - Section 2(1) - Trader

Definition (AO1)

A trader is a person acting for the purpose of his:

• Trade OR

• Business OR

• Craft OR

• Possession

A trader may be acting:

• Personally

  OR

• Through a person acting on trader’s behalf

Consumer Contract for Supply of Goods - Section 2(3) - Consumer

Definition (AO1)

A consumer is an individual acting for purposes that are wholly or mainly outside the individual’s:

• Trade OR

• Business OR

• Craft OR

• Pofession

Consumer Contract for Supply of Goods - Section 2 - Goods

Definition (AO1)

Goods refer to any tangible moveable items

I.e. petrol

Would not include a house.

Consumer Contract for Supply of Goods - Section 3

Definition (AO1)

A contract to supply goods is:

• A contract to sell goods

• A contract to hire goods

• A hire-purchase agreement

• A contract to transfer goods

Terms implied into a Contract to Supply Goods

Types (AO1)

1. Goods of satisfactory quality s.9

2. Goods reasonably fit for a particular purpose s.10

3. Goods correspong with any description s.11

All objective tests - viewpoint of reasonable person

Satisfactory Quality - Section 9

Definition (AO1)

“Every contract to supply goods is to be treated as including a term that the quality of the goods is satisfactory”.

Satisfactory Quality - Section 9 - Test

Definition (AO1)

A reasonable person would regard goods as satisfictary taking into account:

• Description

• Price

• Any other relevant circumstances.

Quality includes:

• State and condition of goods

• Fitness for usual purpose

• Appearence and finish

• Freedom from minor defects

• Safety

• Durability

Does not include:

• Defects drawn to consumer’s attention pre-contract

• Where consumer examines goods pre-contract and defects are apparent

• Where goods supplied by sample and defects are apparent from sample.

Satisfactory Quality - Section 9

Case (AO3)

(Rogers v Parish Ltd)

Bought a new range rover.

Fitness for Particular Purpose - Section 10

Definition (AO1)

Where before the contract is made, the consumer makes known to the trader (expressly or by implication) and particular purpose for which the consumer is contracting the goods.

To contract is treated as including a term that the goods are reasonably fit for that purpose

Whether or not that is a purpose for which goods of that kind are usually supplied - If not then consumer must make it known.

Fitness for Particular Purpose - Section 10

Case (AO3)

(Baldry v Marshall)

Sold a bugatti for touring not fit for purpose.

Match the Description - Section 11

Definition (AO1)

Every contract to supply goods by description is to be treated as including a term that the goods will match the decription

There may be a supply of goods by description where:

• Goods are exposed for supply

• Goods are selected by consumer

Buyer beware gives balance to both consumer and trader.

Match the Description - Section 11

Case (AO3)

(Re Moore & Landauer)

Delivery by wrong amount entitles a rejection.

Tins of fruit were to be delivered in cases of 30

Were only delivered in cases of 24

Consumer was entitled to reject goods.

Remedies for Breach of Implied Terms in Contract to supply goods - section 19

Definition (AO1)

Where a trader is in breach of an implied term in a contract for supply of goods - Consumer may claim:

• Common law remedy (Right to terminate or specific performance)

  AND / OR

• Remedy under CRA 2015:

  1. Short term right to reject

  2. Right to repair / Replacement

  3. Right to price reduction / Final right to reject

Burden of Proof:

• Where fault discovered within 6 months of delivery of goods: presumption that fault present at deliver - Rebuttable by trader

• Where fault discovered more than 6 months after delivery of goods, consumer must prove fault present at delivery.

Remedies for Breach of Implied Terms in Contract to supply goods - section 20

Definition (AO1)

Short Term Right to Reject

Where goods delivered to consumer and/or goods installed for consumer - And consumer claims breach of implied term

Consumer may reject goods within 30 days of delivery / installation

But

Perishable goods must be rejected within perishable period.

To reject - Consumer must indicate clearly to trader that consumer is rejecting goods and consumer treating contract as at an end

Then

Trader must provide a full refund - within 14 days of notice of rejection.

Consumer must make goods available for collection by trader

Or return the goods as agreed.

Remedies for Breach of Implied Terms in Contract to supply goods - section 23

Definition (AO1)

Right to Repair / Replacement - Under 6 months

Consumer may require trader to repair or replace the goods:

unless - repair / replacement impossible

OR

repair / replacement disproportionate to other remedies regarding:

• Value of goods

• Significance of faults

• Convenience of consumer

• nature of goods - Purpose for which goods were acquired

When Consumer claims Section 23 remedy:

• Tradery must repair / replace:

  • Within reasonable time

  • Without significant incovenience to consumer

  • At Trader’s expense

Remedies for Breach of Implied Terms in Contract to supply goods - section 24

Definition (AO1)

Right to price reduction OR final right to reject - Over 6 months

• Where consumer has required repair / replacement but goods still do not confirm to the contract OR

• Repair / Replacement is not possible OR

• Trader has failed to provide repair / replacement:

  • Within a reasonable time

  • Without significant inconvenience to consumer

THEN

Consumer may retain goods OR require price reduction to relfect difference in value between price paid and goods received

OR

Reject goods - requiring a full refund.

Consumer Contracts for Supply of Services

Summary (AO2)

1. Consumer contract for the supply of services

2. Implied terms:

   • Service to be performed with reasonable care and skill

   • Service to be performed within a reasonable time

3. Remedies for breach of implied terms

Supply of Services - Trader

Definition (AO1)

Same as supply of goods

A trader is a person acting for the purpose of his:

• Trade OR

• Business OR

• Craft OR

• Possession

A trader may be acting:

• Personally

  OR

• Through a person acting on trader’s behalf

Supply of Services - Consumer

Definition (AO1)

Same as supply of Goods

A consumer is an individual acting for purposes that are wholly or mainly outside the individual’s:

• Trade OR

• Business OR

• Craft OR

• Pofession

Supply of Services - Services

Definition (AO1)

• Undefined (Broad range)

• Includes services provided by sub-contractor

• Does not include services provided under contract of employment

Terms implied to a supply of services - Section 49

Definition (AO1)

Reasonable Care & Skill

“Every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care & skill.”

Reasonable care & Skill is undefined but interpereted by the courts to:

• Industry customs / Standards

• With a focus on manner of carrying out the service

• Not the end result

Consider Price and Nature / Experience of trader

Terms implied to a supply of services - Section 49

Case (AO3)

(Thake v Maurice)

Terms implied to a supply of services - Section 52

Definition (AO1)

Performance within a reasonable time:

“Where a contract to supply a service does not expressly fix a time for the service to be performed -

The contract is to be treated as including a term that the service is to be performed within a reasonable time”

Reasonable time:

• Undefined

• Question of fact

• To be determined regarding all relevant circumstances

Supply of services - Remedies - Section 54

Definition (AO1)

Where trader is in breach, a consumer may claim:

• Common law remedy:

  • Damages (right to terminate or specific performance)

• Remedy under CRA 2015:

  • Right to repeat performance

    AND / OR

  • Right to price reduction

Supply of services - Remedies - Section 55

Definition (AO1)

Right to Repeat Performance

Consumer may require trader to perform the service again, to achieve conformity with the contract

UNLESS

Completing / repeating performance is impossible.

Trader must repeat performance:

• Within a reasonable time frame

• Without significant inconvenience to consumer AND

• At trader’s own expense.

Reasonableness - Regarding nature of service and the purpose for which service to be performed.

Supply of services - Remedies - Section 56

Definition (AO1)

Right to Price Reduction

Where trader has not provided repeat performance:

• Within a reasonable time OR

• Without significant incovenience to consumer OR

• Repeat performance is impossible

THEN

Consumer may claim a reduction in price:

• Up to the full amount paid

• Trader must pay refund within 14 days.