Sale And Supply Of Goods To Consumer Regulations 2002

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The Consumer Rights Act 2015 sets out rules relating to the supply of goods to consumers. A single set of rules applies to all contracts where goods are supplied, whether by way of sale, hire, hire-purchase or work / materials contracts. The Act also governs the supply of services and digital content.

This is a guide to the rights and obligations that arise when a trader supplies goods to a consumer. It answers questions that are commonly raised by traders about their obligations towards the individual consumer.

A 'person' can mean more than one individual - for example, if your business is a partnership of two or more people. A person can also be a company, a charity (or other not-for-profit organisation), a Government department, a local authority or a public authority.

If you are a trader that allows another person to act in your name or on your behalf you would still be responsible for those contracts - for example, if you employ people to make contracts for selling cars to your customers or you sub-contract with someone else to supply labour when building a wall.

For the purposes of this guide, a 'consumer' is an individual who, in their dealings with a trader, is acting for purposes wholly or mainly outside their trade, business, craft or profession. Where a consumer presents themselves as a business (for example, by buying goods for personal use from a trade outlet on a trade account) the law does not consider them to be a consumer.

When a consumer buys goods from a trader, both parties enter into a contract. A contract may be defined as an agreement between two or more parties that is intended to be legally binding. In addition to terms agreed between the parties, the law sets certain standards for consumer contracts.

In order for a term to be binding it must clearly be part of the contract and be legal. Terms given to a consumer after the contract is made (for example, terms written only on the back of a receipt) are not part of the contract and they have no effect.

The essential element in forming a contract is the agreement (consisting of an offer and acceptance). At least two parties are required (such as the trader and the consumer). One of them (the offeror) makes an offer, which the other (the offeree) accepts. An offer is an expression of willingness to contract, made with the intention that it shall become binding on the offeror as soon as it is accepted by the offeree.

When a trader displays or advertises goods (for example, by displaying them on a shelf in a shop alongside a price ticket) they are usually giving consumers what is referred to as an 'invitation to treat'. The consumer can then make an offer to buy the goods. At this point the trader is under no obligation to accept the offer; a contract is made if and when the trader accepts.

Under the contract, the consumer will agree to pay the trader a sum of money and/or do something else in return for the goods the trader supplies. This commitment is known as the 'consideration' in the contract. If there is no consideration (that is, if a trader offers to supply goods completely free of any charge or other obligation) there is no contract at all.

Normally a consumer has no automatic right to change their mind and to cancel a contract; therefore if this happens they are in breach of contract. However, there is an automatic right to cancel in some special cases, including most consumer contracts made at a distance (for example, mail order or internet) or at a consumer's home etc; see 'Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013' below.

If a consumer cancels the contract wrongfully, the trader can claim the reasonable costs incurred. Where the trader cannot recover the lost sale (for example, by selling the item to someone else) they may be entitled to claim loss of profit too. If the consumer has made full or part payment up front, the trader can only retain enough to cover these losses and must refund the difference.

If, when they are supplied, the goods do not meet the requirements above, there is a short period during which the consumer is entitled to reject them. This short-term right to reject goods lasts for 30 days unless the expected life of the goods is shorter, as with highly perishable goods. The 30-day period does not start until the consumer has ownership (or, for hire, hire-purchase and conditional sale, the consumer has possession) of the goods, and the goods have been delivered.

In addition, if the trader has agreed to do anything else to the goods (for example, to install them), the 30-day period does not start running until this is done. However, the short-term right to reject does not apply if the only breach is that the goods have been installed incorrectly.

If the consumer asks for or agrees to a repair or replacement during this initial 30-day period, the period is paused so that the consumer has the remainder of the 30-day period or seven days (whichever is longer) to check whether the repair or replacement has been successful and to decide whether to reject the goods.

When a consumer rejects goods they can claim a refund (which can include the return of items handed over in exchange or part-exchange). This would be a full refund or, in the case of hire, a refund for any part of the hire that was paid for but not supplied. They are also released from all their outstanding obligations under the contract - for example, the outstanding instalments in a contract of hire purchase. A refund must be given without undue delay and in any event within 14 days of the trader agreeing that the consumer is entitled to a refund. In some cases (for example, where the exchanged goods have already been sold on) a refund cannot be claimed under the Act, but the consumer would be entitled to claim damages (monetary compensation) for any losses incurred.

The trader is responsible for the reasonable cost of returning the goods except where the consumer is returning them to the place where they took possession of them - for example, the retail shop where they bought them. However, the consumer is not required to return the goods to this place unless this was agreed from the outset as part of the contract. Even if the consumer returns goods to the shop, they may in some circumstances be able to claim some or all of that cost from the trader - for example, where a motor vehicle breaks down and the consumer has to pay for a recovery service to return it.

The consumer cannot choose one of these remedies above the other if the chosen remedy is either impossible or disproportionate as compared to the other remedy. Also, once the consumer has chosen a remedy, they must give the trader a reasonable time to provide that remedy.

The remedies fail if, after just one attempt at repair or replacement, the goods still do not meet the necessary requirements. The consumer does not have to give the trader multiple opportunities to repair or replace, although they can do so if they wish. The remedies also fail if they are not provided within a reasonable time and without causing significant inconvenience to the consumer.

In either case, where repair or replacement fail the consumer is entitled to further repairs or replacements, or they can claim a price reduction or the right to reject. The same rule applies if both repair and replacement are impossible or disproportionate from the outset.

If repair or replacement is not available or is unsuccessful, or is not provided within a reasonable time and without significant inconvenience to the consumer, then the consumer can claim a price reduction or reject the goods.

Where repair or replacement fail, are not available, or were not provided within a reasonable time and without causing significant inconvenience to the consumer, the consumer chooses whether to keep the goods or return them. If they keep the goods, then their claim will be for a reduction in price; if they return them, they are rejecting them.

If the consumer rejects the goods, they are entitled to a refund. This refund may be reduced to take account of any use the consumer has had from the goods. However, no deduction can be made for the consumer having the goods simply because the trader has delayed in collecting them. Nor can a deduction be made where goods are rejected within six months of supply, except where the goods are a motor vehicle.

Whatever remedy the consumer chooses or ends up with, they may also be able to claim compensation for losses that have been incurred. These losses might include the cost of any property damage caused by the goods, compensation for personal injury and compensation for the additional cost of buying equivalent goods if they are more expensive elsewhere.

If the consumer chooses repair, replacement, price reduction or the final right to reject, and if the defect is discovered within six months of delivery, it is assumed that the fault was there at the time of delivery unless the trader can prove otherwise, or unless this assumption is inconsistent with the circumstances - for example, obvious signs of misuse. This rule is often known as the 'reverse burden of proof', as it reverses the normal rule that a person making a claim has to prove each aspect of that claim.

If more than six months have passed, the consumer has to prove that the defect was there at the time of delivery. They must also prove that the defect was there at the time of delivery if they exercise the short-term right to reject goods. Some defects do not become apparent until some time after delivery, and in these cases it is enough to prove that there was an underlying or hidden defect at that time.

Neither can a consumer claim if they chose the product themselves for a purpose that is neither obvious nor made known to the trader and they then find that the item is simply unsuitable for that purpose. For example, if a consumer buys a hedge trimmer and breaks it attempting to cut down a tree, they cannot make a claim unless the trader told them it would be suitable for tree-felling.

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