Consumer Law

The law on the sale of goods is set out primarily in the Sale of Goods Act 1979 and a number of amendments. The Sale of Goods Act applies to all buyers but consumers are entitled to a greater range of remedies. Consumers are defined as people who are buying for purposes not related to their trade, business or profession. The Act does not apply to the sale of services.

Under the Sale of Goods Act 1979 traders must sell goods that are as described and of satisfactory quality.

If consumers discover that products do not meet these requirements they can reject them and ask for their money back providing they do so quickly. Alternatively, they can request a repair or replacement or claim compensation.

The rights given by the Sale of Goods Act are against the supplier. Buyers can not usually claim directly against the manufacturer, but they may have additional rights to those given by law under a guarantee. They may also be able to claim against a credit card company.

Buyers are entitled to goods of satisfactory quality, taking into account the description, price and all other circumstances. Thus any latent or inherent fault can lead to rejection of the goods.

Buyers can not however expect a remedy in respect of:

• Fair wear and tear
• Misuse or accidental damage
• No longer requiring the goods.

Similarly buyers can not expect a remedy in respect of faults which they knew about at the time of purchase, or should have been apparent on reasonable inspection.

Remedies Available

• A full refund when the goods are returned within a reasonable time.
• Compensation or damages when not returned within a short time, but within 6 years.
• Repair or replacement
• A partial refund when some enjoyment or benefit has been obtained.

The remedies of repair, replacement or full refund are also available.

• Where the installation by the retailer was not satisfactory
• Where installation instructions were not complied with
• Where goods do not match public statements made about them.
• Where a specially commissioned product has serious shortcomings.

Unfair Contract Terms Act

This is available to individual consumers who have entered into a contract with a Company or Business, and is directed towards redressing any inequality in bargaining power, and unfair terms hidden in the small print. Action will be taken on behalf of the consumer by the Office of Fair Trading, and if a contract term is considered unfair, they should be the first contact. They will endeavour to negotiate an amendment to the term in the contract, and if necessary make an application to the Court. Any term found unfair will not have to be complied with.

Consumer Credit Act 1974

Protection is provided for individuals who have entered into credit agreements for less than £25,000. A right is provided to cancel within a certain period if the agreement was signed in your home and not at the seller’s premises.

Providing you have paid a third of the total price of the goods under a HP agreement then the creditor cannot take the goods back without first getting a court order. Even if they apply for a court order you can ask the court to suspend the "Return Order" and accept your offer to pay the outstanding amounts by installments.

If a credit agreement is unfair then you can apply to the court and ask them to look at the agreement and put in place a new agreement or alter the old one. However, the court will only do this if it can be shown that the agreement is "extortionate". To decide this Court will look at such things as your age, experience, "business knowledge", state of health and the amount of financial pressure put on you when you entered the deal. The Court also considers the creditor’s position, such as the level of risk accepted by the creditor, including the value of any security, the creditor’s relationship to you, and with any other relevant matter, whether the creditor deliberately inflated the cash price to make the credit charges seem reasonable.

A seller can be the person who grants you credit or who arranged for you to get credit from a 3rd party. Alternatively it may be the third party who arranged to supply the goods to you. Your protection is that you can choose who to sue. You can either sue the seller or the provider of the credit or both. This helps you because if the seller goes out of business you can try and get your money from the credit provider instead.

You have an entitlement to a copy of the credit agreement which must show the total charge for credit, the annual percentage rate [APR], and the cash price for the goods.

Remedies available under contract law

If you buy something which is not of satisfactory quality or not as described, or not fit for the purpose you bought it for then you can sue the seller for breach of contract.

If the seller told you something about the goods and you believed the seller and decided to buy the goods, you can sue the seller if what he or she has told you later turned out to be untrue. This is called "misrepresentation".

Misrepresentation includes any untrue public statements on the specific characteristics of the goods which has been made by the seller, manufacturer or their representative, particularly in advertising or labeling.

If you pay for a service and it is not carried out with reasonable care and skill in a reasonable time and for a reasonable price you can also sue for breach of contract.

If you have entered into a credit agreement which has been broken you can sue under the Consumer Credit Act 1974 for breach of contract. This Act allows you to sue not just the seller, but also the person / organisation that granted you credit through the seller.

Consumer Credit

The Consumer Credit Act lays down strict rules about lending and borrowing money where the amount borrowed is less than £25,000.

In particular the Act provides:

• that all lenders of money are licensed;
• that lenders show the buyer the true cost of credit;
• protection against unfair credit agreements and allows the court to reduce extortionate rates of interest;
• allows a cooling off period when a credit agreement is made at home. This will usually be for seven days but will not apply to loans arranged by post or telephone;
• ensures that if you pay off a loan early you will get a rebate.

The Act also allows people who have purchased faulty goods to claim against the finance company who lent money for the purchase of the goods. This can be a very useful remedy if a seller goes out of business or is unable to compensate you under the Sale of Goods Act. With hire purchase agreements good retailer sells the goods to a finance company, which then hires or sells them to you, so the finance company is both the supplier and the lender. It will therefore be fully responsible if the goods are faulty

A company providing credit cannot demand early payment, try to get the goods back or end the agreement without serving a written notice giving seven days notice of their intention to take such action. Such is known as a Default Notice. If the purchaser has paid a third of the total price of the goods under a hire purchase agreement, then the creditor cannot take the goods back without first getting a court order.

If a credit agreements is unfair, then an application can be made to the court who have power to put in place a new agreement or alter the old one. This will only be done however if the court considers that the agreement is extortionate.

Purchase of Services

The Supply of Goods and Services Act 1982 require that a supplier of a service, when acting in the course of business, must carry out that service with reasonable care and skill and, unless agreed to the contrary, within a reasonable time and make no more than a reasonable charge. These conditions will apply unless they have been excluded and even then there are strict limits on the circumstances in which an exclusion or variation will be effective.

The terms of the Act will be implied into all contracts for the provision of services, and if breached, this will be considered a breach of contract for which the consumer can claim compensation. Usually the compensation will be repair or replacement and in addition any damages resulting from the breach of contract by the supplier. Any goods supplied in the course of the service must be as described, of satisfactory quality and fit for the purpose.

If an agreement has not been paid for the time in which the work must be completed, then it must be completed within a reasonable time. Similarly if a price has not been agreed, the charge must be reasonable and in accordance with that charged by other suppliers for the same work in the same area.

A claim can be brought in the court for up to six years providing it can be shown that the problem was due to the work not being carried out properly or the goods or materials used not being of satisfactory quality.

The Sale of Goods Act

The Sale of Goods Act 1979 (as amended) gives a consumer purchasing as such a number of important rights against the seller of goods. These rights are enforceable only against the seller of the goods and not the manufacturer against whom the Act provides no rights.

The Act provides that the seller must ensure:

• That the goods match the description given;
• That the goods are of satisfactory quality;
• That the goods are fit for their purpose.

These 3 conditions are implied into any contract for sale between a purchaser and seller. If they are not met the seller is in breach of contract and if the breach is serious, the purchaser is entitled to the return of his money. If the breach is less serious and can be easily fixed, the seller must carry out this work quickly and without charge. If he fails to do so or the repairs are not satisfactory, the purchaser will then still be entitled to his money back.

A purchaser will also be entitled to compensation for any financial loss which has resulted from the purchase of faulty goods.

Although a seller may offer a credit note instead of a refund, a purchaser is not obliged to accept this for faulty goods and is entitled to a full refund of the purchase price.

There is no legal entitlement to replacement goods although this may be accepted as an alternative to a cash refund.

There is no entitlement to a refund when a purchaser has changed his mind or for example has purchased a garment that doesn't fit. However many sellers offer this in addition to the statutory rights and if so this entitlement will be incorporated into the contract.

If faulty goods are kept for a long time with out telling the seller, the right to reject could be lost.

There is no legal obligation to produce a receipt when returning faulty goods although it must be shown that the goods were purchased from that seller.

It is not for the consumer to prove that goods were faulty when purchased but instead for the seller to prove that they were not. However this burden of proof in favour of the purchaser will only last for the first 6 months after purchase and will then be reversed whereby after 6 months the purchaser must prove that the goods were faulty on purchase.

Goods are of a satisfactory quality if they reach the standard that a reasonable person would regard as satisfactory, taking into account the price paid.

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