consumer rights

‘to what extent has the cra 2015 clarified the law’

  • gives consumers a clear right to repair or replacement of faulty digital content such as online films and games, music downloads and e-books, first time that rights on digital content are set out in legislation.

  • unfair terms may include:excessive fees, terms that are not transparent or clear to understand and unreasonable clauses in a contract, hidden terms, unreasonable time frames andpreventing access to remedies.

what is meant by fairness of terms?

A term may be deemed unfair if:

  • It is contrary to the requirements of good faith - meaning it must be designed, negotiated and entered into with the consumer in a fair and open way.

  • It causes a significant imbalance between the rights of the trader and consumer to the detriment of the consumer.

3 points in how the CRA 2015 has clarified the law:

  • covers what should happen when goods are faulty, when digital content is faulty, when an issue arises plus unfair terms

  • rights on digital content

  • covers rights an remedies available in respectful goods, services and digital content

The fairness test

S.62(4) of the Act provides that a term is unfair:… ‘if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer’.

s.62(5) – Whether a term is fair is to be determined—

(a)taking into account the nature of the subject matter of the contract, and

(b)by reference to all the circumstances existing when the term was agreed and to all of the other terms of the contract or of any other contract on which it depends.

Schedule 2 of the CRA: The Act illustrates what is meant by ‘fairness’ by means of an indicative and non-exhaustive list of types of terms that may be regarded as unfair. This list is known as the grey list. A term corresponding to one of the types of terms in the Grey List is not necessarily unfair. It may be unfair in some circumstances but not others – creates a risk of suspicion. The fairness of any term is decided in the light of the circumstances at the time of making the contract. The concept of good faith is familiar in Europe but not necessarily so in the UK – it means that contracting parties must deal with each other in a fair, honest, transparent way taking into account their bargaining power.

Consumers being denied full redress if things go wrong
If a consumer buys a laptop and it is faulty, a term states they cannot get a refund.

Trader determining the price or subject matter after the consumer is bound
If a consumer signs a gym contract, the gym later decides how much the monthly fee will be.Consumers being tied into the contract beyond what they would normally expect
If a consumer signs up for a free trial, they are automatically tied into a long contract.

Consumers unfairly losing pre-payments if the contract is ended
If a consumer cancels a service, they lose their full deposit even though the trader has no loss.

Trader arbitrarily varying the terms after they have been agreed
If a consumer agrees to a phone contract, the provider later changes the terms without consent.

The transparency test:

s.68 requires that a written term of a consumer contract, or a consumer notice in writing, is transparent. (pages 462-3 OCR look at unfair terms and those which lack transparency).

This test looks at transparency – learn to view this using some key words – plain language, intelligible language, prominence of any notice, legibility.Consider the clarity and intelligibility of a word, words, phrases, notice in a problem question. This can include font size, font style, location in the contract of key terms, lay out

The average consumer is a ‘consumer who is reasonably well informed, observant and circumspect’.

CRA refers to the following:

Goods must be of satisfactory quality

Goods must be fit for purpose

Goods must match any samples shown

Goods must match their description

GRANT V AKM

A consumer bought digital video files that turned out to be unusable, and the court held this breached the Consumer Rights Act 2015 because digital content must be of satisfactory quality and give the consumer a right to repair, replacement, or a price reduction.

BEALE V TAYLOR

A car was advertised as a 1961 model but was actually made from two welded cars, and the court held this breached the Sale of Goods Act because the car did not match its description, giving the buyer the right to reject it.

ROGERS V PARISH

A new Range Rover with persistent defects was held to breach the requirement of satisfactory quality, confirming that under consumer law a product can be rejected even if it still functions, because buyers are entitled to a high standard of finish and freedom from minor faults.

PRIEST V LAST

: A hot‑water bottle burst and injured the buyer, and the court held the seller liable because the item was not fit for its purpose, establishing that goods must be safe and suitable for their ordinary use.

LOWE V MACHEL JOIRNEY

A staircase, although supplied in exact conformity with the contract, would not have complied with the Building Regulations when installed (there were safety issues). The goods were not of satisfactory quality

KYNASTN-MAINWARING V GVE LONDON LTD

A luxury car, a Mercedes roadster convertible was bought from the Ds garage with cs paying £122,000. Rainwater fell into the claimant’s footwell through no fault of their own. The electronic wiring of the car was damaged and C sought to reject the car. CoA stated that there had been a breach of section 9 satisfactory quality. Ds were ordered to return the price of the vehicle (with a deduction of £5k for use).

GREEN V BETFRED

Mr. Green won £1.7 million on a game called “Frankie Dettori’s Magic 7 blackjack.” Betfred refused to pay saying their had been a glitch that caused the win and anyway, the terms of their contract had a clause excluding them from any liability.

Three year court battle and C won.

Previously the law in relation to sale of goods and consumers was

contained in what legislation?

  1. sales of goods act 1979

For business to business in relation to sale of goods, the law is contained in

what legislation?

  1. SOGA

‘Trader’ is a person acting for purposes relating to trade, business, craft or profession.

‘Consumer’ is an individual acting for purposes outside that individuals trade, business, craft or profession.

Is the new law better?

  • under old law, the time limit for returning faulty goods was unclear- reasonable time. Now it’s a 30 day right to reject.

  • if you own an item for less for 6 months, the retailer must give you a full refund if an attempt at a repair or replacement is unsuccessful.. only exception is motor vehicle as consumer may have had fair use

  • burden is on seller to prove the product was of satisfactory quality when you received it.. its not on the consumer [easier for consumer]

  • short title of CRA shows increased rights for consumers

  • includes digital content for the first time

s.9 satisfactory quality

  • objective test: do the goods meet the standard that a reasonable person would consider as satisfactory?

  • description- ‘luxury car’

  • price

  • safety

  • fitness for purpose

  • appearance and finish

If consumer has had a chance to examine the goods, or a chance to see a sample or defects were made known to them (or sold as seen) then harder to argue s.9 breach

Rogers v Parish, Lowe v Michell Joirney, Kynaston-Mainwaring , GVE London Ltd

s.10 fitness for purpose

  • c is relying on the skill, expertise of the trader

  • section applies were c has made t known of the reason they want the good

  • if the consumer has to made known the purpose then its not the fault of t

  • in some cases it is OBVIOUS why C wats to buy the goods and they are not expected to make this known- e.g id like a clock or GRANT V AKM

  • If a consumer has made known any allergies or sensitivities then T may be liable – conversely if they have not said anything then T not liable

CONSIDER

  • has a consumer made known to a seller a specific reason for why they want the goods?

  • how long has the good lasted? f not for long then likely to be not fit for purpose

  • specialist need

Grant v AKM, Griffith v Peter Conway

s11. match description

  • goods must match their description so a waterproof watch must be waterproof

CONSIDER

  • size, material, washing instructions, match the sample or model shown to c before they purchased

Beale v Taylor

You can claim a full refund for goods that are of unsatisfactory quality, unfit for purpose or not as described. This is also known as a short time right to reject. It comes under s.20 CRA 2015.