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What is the Consumer Rights Act?

The Consumer Rights Act (CRA) introduced in October 2015, harmonises the rules regarding the supply of goods, services and digital content, when the contract is between a Trader and a Consumer.

The Sale of Goods Act 1979 (as amended) still sets the rules for business to business contracts.

But what does the CRA cover and what should you be aware of when it comes to the sale of your goods? This overview aims to explain the important things you need to know.

What is the Consumer Rights Act?

Who the law protects

The law protects the consumer – someone largely unrelated to a business, buying something for their own use – and businesses. It outlines what rights a consumer has and what your obligations are as a goods or services provider in the event of a dispute.

The act encompasses a number of terms.  It covers the sale of goods, the supply of services and it also deals with digital content. It explains what to do in the event of a breach (referred to in the law as remedies), and the acceptance of goods.

What are the terms?

The terms of the Consumer Rights Act cover a series of major areas. If you sell goods it must conform to certain standards or conditions. They are:

Title

A seller must have a “good title” - this means the trader must have the right to sell them. Items under a hire purchase usually can’t be sold due to the finance company technically being the owners. Sellers who deal in stolen goods won’t have a good title, and won’t have the right to sell goods. It’s worth pointing out that you might not realise you’ve sold goods which are stolen. However, if this happens, you run the risk of the goods being returned to the rightful owner and your business having to pay compensation to the consumer you sold them to.

Description

The descriptions you provide for every item you sell must be accurate. From colour and dimensions to the features they have, this needs to be correct to avoid misleading consumers.

Quality

Goods which are sold must be of a satisfactory quality, this means it must work properly and be undamaged. This requirement includes a range of criteria that products are assessed against in order to be classed as having satisfactory quality. These are:

  • Appearance and finish
  • Durability
  • Suitable for the intended purposes the item is provided
  • Free from minor defects
  • Safe to be used

These areas often cover the instances where a product can be returned and form the basis for a lot of the arguments for allowing refunds or exchanges. This also applies to second-hand items. However, there is a degree of reasonability applied to the criteria as it stands to reason a product won’t be in as good condition as if it was bought new.

The same applies to the wear and tear of a product. On a second-hand item, wear and tear is to be expected. However, if something suffers and degrades quickly on a new item, and without good reason, it could be due to an issue with durability.

Fit for purpose

If a consumer explains what a purchase is for, the item provided should be reasonably fit for that specific purpose. For example, a customer might want to buy a drill capable of drilling into brick. Not all drills can do this, but by stating this is what they need the drill for, they should be recommended and sold something capable of accomplishing that task.

There are also certain standards that apply if you supply a service. This includes:

  • You must carry out the service with reasonable skill and care.
  • You are bound by the information you give to the consumer (verbally or in writing) – this includes quotations and any promises about timescales or results.
  • If you did not agree a price or a time for completion, the service must be provided at a reasonable price and completed within a reasonable time.

Explaining remedies

Remedies is the term used to highlight solutions to problems, resulting from the terms of the Consumer Rights Act. In B2C situations, which this act covers, this usually means that the consumer can reject an item and be allowed a refund, or they can claim a repair or replacement for faulty goods. If this isn’t possible, for example if the goods are out of stock, they can claim either a partial or full refund instead.

Delivery

A B2C contracts under the act usually include a requirement that you, as the trader, must deliver the goods to the consumer (unless you have agreed something else). If no delivery time is agreed, you must deliver the goods without delay and not more than 30 calendar days after the date on which the contract is entered into.

Failure to stick to the rules means that a consumer may treat the contract as at an end in certain circumstances.

Rules regarding risk

As a trader, it’s important to know that the goods remain your risk until they come into the physical possession of either (a) the consumer or (b) a person identified by the consumer to take possession of the goods.  If the goods are delivered to a carrier commissioned by the consumer (and not one offered by you) then risk passes to the consumer on delivery to that carrier.

How can FSB help you to understand business laws?

It can be difficult to keep track of the number of laws that surround businesses. Amends to laws and changes in legislation should also be taken into account to ensure you don’t find yourself, and your business, on the wrong side of the law.

FSB Essential members have right of membership access to the FSB Legal Advice Line where solicitors will be able to give you guidance on consumer matters.

At FSB, we also aim to help with this by providing access to a library of online legal documents, as part of our Business Essentials and Business Creation packages. This provides businesses with:

  • Documentation covering employment law, taxation, health and safety, and cyber security, as well as start-up business advice, business law, contract and consumer law
  • Downloadable, editable contracts and agreements, individual clauses, policies and checklists, letters, notices and forms
  • Updates about new legislation and other key legal developments, which might affect your business, through our monthly Legal Bulletin email

If you’d like to find out more about how this service can help you, please read the FSB Online Legal Documents page. Or to take a look at our packages, and see the other ways FSB could benefit your business, visit our package comparison page.

FSB Online Legal Documents from FSB

Factsheets and downloads for: Employment Law, Taxation Matters, Business Law and Health & Safety information. All free. As well as monthly bulletins.

Find out more