New Consumer Contract Regulations...what are the implications for business?

Torion Bowles, solicitor within the Commercial Litigation and Dispute Resolution Team at Warner Goodman Commercial, examines the impact of the new Consumer Contract Regulations on traders and their businesses.

Since 13 June 2014, contracts between traders and consumers concluded at a distance, off or on premises have been subject to the new Consumer Contract (Information, Cancellation and additional Charges) Regulations 2013 (“the new regulations”). The new regulations replace the former Distance Selling Regulations and Doorstep Selling Regulations.

Not all trader to consumer contracts are caught by the new regulations with the following contracts being excluded: gambling, financial services, rental of accommodation for residential purposes, construction of new buildings or construction of substantially new buildings by the conversion of existing buildings, household goods delivered by rounds men, package travel, timeshares and creation of immovable property or of rights in immovable property. All other trader-consumer contracts will be caught by the new regulations. The implications will vary depending on the type of contract involved (supply of service, supply of goods etc). However, there are five key changes that traders need to be aware of.

• First, the trader is now obliged to provide the consumer with (or direct the consumer to) certain pre-contract information before the contract is concluded. The new regulations set out 23 different categories of pre-contract information depending on the type of contract involved. A well drafted set of terms and condition of sale and supply will cover the various categories of information. However, for further details about the categories please visit: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/265898/consumer-contracts-information-cancellation-and-additional-payments-regulations-2013.pdf
• Secondly, the statutory cancellation period (more commonly known as “the cooling off period”) has been increased from 7 to 14 days. The trader is obliged to make the consumer aware of their right to cancel within the pre-contract information and if they fail to provide this information, the consumer’s right to cancel the contract will be extended to 14 days after the date they receive the relevant information.
• Thirdly, unless the consumer agrees otherwise, 30 calendar days is the default period for the delivery of purchased goods.
• Fourthly, where a consumer wishes to return the goods, they are to do so within 14 calendar days of cancelling the contract. The trader is entitled to withhold any refund until the goods have been returned. The trader will also be entitled to deduct an amount for diminished value of the goods from the consumer’s refund.
• Fifthly, traders are obliged to provide consumers with a non-premium rate telephone number to allow them to discuss an existing contract.

The new regulations have provided consumers with greater rights when buying from traders. The failure of traders to comply with the new regulations can constitute a breach of contract and the consumer would be entitled to pursue a claim for damages if their dispute could not be resolved. Where traders fail to notify a consumer of their right to cancel, this will automatically extend the consumer’s right to cancel the contract and will allow goods to be returned to traders well beyond the envisaged 14 days when the contract was thought concluded. Traders need to be fully aware of the new regulations and make sure their terms and conditions of business are up to date and are provided to consumers before a contract is concluded.

Warner Goodman Commercial advises on business terms and conditions and the implications of the Consumer Contract (Information, Cancellation and additional Charges) Regulations 2013.  For further information about the services we provide to businesses, please contact Torion or our Commercial Litigation and Dispute Resolution team on 02380 717717, or visit their section of the website here.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.