Trading Standards: Selling & Provision of Goods

This article aims to help you as the consumer understand what the responsibilities of a business are when you order products from them under the Consumer Rights Act 2015.

The Consumer Rights Act 2015 lays down laws relating to the delivery to customers of products. For all contracts where goods are supplied, whether by way of sale, hire, hire-purchase or work / materials contracts, a single set of rules applies. Providing services and digital content is also regulated by the Act. 

This is a reference to the rights and responsibilities that exist when a customer is supplied by a trader with products. It addresses questions frequently asked by traders regarding their duties to the individual customer. 

What’s a merchant? 

You are a ‘trader’ if you are an ‘individual’ acting for purposes relevant to your trade, industry, craft or career. 

For instance, if your company is a partnership of two or more persons, a person may mean more than one person. An individual may also be a corporation, a charity, a government agency, a local authority or a public authority (or other non-profit organisation). 

You will also be liable for such contracts if you are a broker who requires another person to work on your behalf or on your behalf – for example, if you hire people to make contracts to sell cars to your customers or if you sub-contract with someone else to provide labour while constructing a wall. 

What is a customer? 

For the purposes of this guide, a ‘user’ is a person who acts for purposes wholly or partly outside their trade, company, craft or profession in their dealings with a trader. Where a customer introduces himself as an enterprise (e.g. by purchasing products for personal use from a commercial source on a commercial account), the law does not consider him to be a consumer. 

Often, when purchasing second-hand goods at a public auction where individuals can attend in person, an individual is considered to be a buyer only in certain respects. 

If the trader argues that the buyer is not a customer and that the rights of the buyer are thus limited, it is for the trader to explain this. 

Creation of an agreement 

The Contract 

Both parties enter into a contract when a customer purchases product from a trader. A contract can be described as an arrangement intended to be legally binding between two or more parties. The legislation sets certain requirements for customer contracts in addition to conditions negotiated by the parties. 

It must explicitly be part of the contract and be legal for a term to be binding. Terms given to a customer after the contract has been completed (for example, terms written on the back of a receipt only) do not form part of the contract and have no effect. 

There is no need to write down a contract, but it is prudent to detail important terms in writing so that no disagreement will arise later on. 

Failure to comply with the terms of the contract is referred to as a breach of contract which typically needs to be corrected in some form by the person committing the breach. 

How is the contract drawn up? 

The contract is the central factor in forming a contract (consisting of an offer and acceptance). It needs at least two parties (such as the trader and the consumer). One of them makes an offer (the offeror), which is accepted by the other (the offeree). An offer is an expression of the willingness to contract with the expectation that as soon as it is accepted by the offeree, it becomes binding on the offeror. 

When a trader shows or advertises items (for example, by showing them alongside a price ticket on a shelf in a store), they typically offer customers what is referred to as a ‘invitation to treat.’ An offer to purchase the products may then be made by the buyer. The trader is under no obligation to accept the offer at this point; a contract is made if and when it is agreed by the trader. 

Often, the approach operates the other way round – that is, when the buyer accepts the bid, the trader makes an offer to the consumer and a deal is made. 

The buyer would agree, under the contract, to pay the trader an amount of money and/or do something else in exchange for the goods supplied by the trader. The ‘consideration’ in the contract is known as this pledge. There is no deal whatsoever if there is no consideration (that is, if a merchant agrees to supply goods absolutely free of any payment or other obligation). 

What happens when their mind is changed by the consumer? 

A customer typically has no automatic right to change his mind and to void a contract; thus, they are in breach of contract if this occurs. However, in some special cases, like most consumer contracts made at a distance (e.g. mail order or internet) or at the home of a consumer etc., there is an automatic right to cancel; see below ‘Consumer Contracts (Information, Termination and Additional Charges) Regulations 2013’ 

If a customer wrongfully cancels the contract, the trader can demand the fair costs incurred. If the trader is unable to recover the lost sale (e.g. by selling the item to someone else), they may also be entitled to claim a financial loss. If the buyer has made a full or partial payment up front, the trader can only keep a reasonable amount to cover the losses and must pay the difference back. 

What can be predicted by the user (statutory rights) 

Under the Consumer Rights Act 2015, for any transaction for the selling and supply of products, certain requirements apply to (including hire purchase, hire, part exchange and contracts for work and materials). 

The person who transfers or sells the goods must have the right to do so and the goods must: 

  • It should be of satisfactory standard. Goods must be of a quality which would be deemed acceptable by a rational individual. In determining quality, all relevant circumstances must be considered, including price, definition and your or the manufacturer’s ads. Quality is a general term that encompasses a range of items, including: 
  • For all the purposes for which such products are typically supplied, health 
  • Finish and appearance 
  • Independence from small blemishes 
  • Security For Safety 
  • Longevity 
    • For a specific purpose, be fit. Where a customer states that the goods are demanded for a specific purpose, or where it is clear that the goods are intended for a specific purpose and are supplied by a trader in order to comply with that requirement, the goods should be appropriate for that specific purpose. 
    • The definition, sample or model are matched. If a customer relies on a model definition, sample or show, the products supplied must comply with it. An offence could have been committed if the products do not comply 
  • If installation has been accepted as part of the contract, it must be mounted correctly. The digital content supplied with the product must also be of satisfactory quality, fit for and as specified for a specific purpose. See ‘Online Content’ for more detail.

The digital content supplied with the product must also be of satisfactory quality, fit for and as specified for a specific purpose. See ‘Online Content’ for more detail.

Remedy for infringement 

The short-term right to dismiss 

If the products do not meet the above criteria when they are shipped, there is a short time within which the customer is entitled to refuse them. This short-term right to refuse goods lasts for 30 days unless, as with highly perishable goods, the estimated lifespan of the goods is shorter. The 30-day period does not begin until the customer has ownership of the goods (or the consumer has possession of the goods for hire, hire-purchase and conditional sale) and the goods have been shipped. 

Furthermore, if the trader has decided to do something else with the items (for example, to instal them), once this is completed, the 30-day cycle does not start running. The short-term right to refuse does not, however, apply if the only violation is that the products were wrongly mounted. 

Where, during this initial 30-day duration, the customer demands or decides to fix or substitute the products, the period shall be paused in such a way that the consumer shall have the remaining 30-day period or seven days (whichever is longer) to verify if the repair or replacement has been satisfactory and to determine whether to reject the goods. 

If a customer refuses product, a refund may be sought (which can include the return of items handed over in exchange or part-exchange). It will be a full refund or, in the case of a lease, a refund for any portion of the lease paid but not given. They are also freed from all their remaining contractual obligations, such as outstanding instalments in a lease purchase agreement. A refund must be issued without unreasonable delay and, in any case, within 14 days after the trader has decided that the customer is entitled to a refund. In certain situations (for example, where the exchanged goods have already been sold) a refund cannot be sought in compliance with the Act, but the buyer will be entitled to claim compensation (monetary compensation) for any damage sustained. 

The trader is liable for the fair expense of returning the items, except if they are returned by the customer to the location where they took possession of them, such as the retail store where they purchased them. However, unless this has been decided from the beginning as part of the contract, the customer is not allowed to return the product to this location. In certain cases, even though the customer returns products to the market, they will be entitled to demand some or all of the expense from the trader – for example, if a motor vehicle breaks down and the consumer needs to pay for a recovery service in order to return it. 

Reparation or repair 

If there is a violation of the contract, however the customer has lost or decides not to exercise his right to refuse the product, the consumer shall be entitled to demand a repair or replacement in the first instance. 

Where a repair or replacement is claimed, this must be done by the trader to the customer at no expense, within a fair period of time and without causing any substantial inconvenience. 

If the remedy chosen is either impossible or excessive in comparison to the other remedy, the user cannot select one of these remedies over the other. Often, if a solution has been selected by the customer, they must provide the trader with a reasonable period to provide the remedy. 

The remedies fail if the products still do not meet the required specifications after only one attempt at repair or replacement. The customer does not have to provide several opportunities for the trader to fix or replace them, but if they wish, they can do so. The remedies often fail if they are not offered within a reasonable period of time and without causing the customer significant inconvenience. 

In this case, the customer is entitled to additional repairs or replacements if the repair or replacement fails, or they may demand a price discount or the right to refuse. If both repair and replacement are unlikely or disproportionate from the start, the same rule applies. 

Reduction in price and the ultimate right to refuse 

If repairs or replacements are not available or are ineffective or are not made available to the customer within a fair period of time and without any inconvenience, the consumer may demand a price discount or refuse the products. 

If the repair or replacement fails, is inaccessible or has not been given within a fair period of time and without causing any inconvenience to the customer, the consumer shall determine whether to maintain or return the goods. If they retain the items, then their claim will be for a price reduction; if they return them, they will refuse them. 

An acceptable number, which will depend on all the circumstances of the claim, must be a reduction in price. Up to the entire price, it can be any number. 

If the consumer dismisses the goods, the consumer is entitled to a refund. This refund may be diminished in order to take into account the use of the products by the customer. For the customer who has the items, however, no deduction can be made simply because the dealer has postponed receiving them. If goods are refused within six months of delivery, except where the goods are motor vehicles, a deduction can also not be made. 

Supplementary compensation 

They will also be entitled to seek compensation for damages that have been caused, regardless of what solution the customer prefers or ends up with. These losses could include, if they are more costly elsewhere, the cost of any property harm incurred by the goods, compensation for personal injuries and compensation for the extra cost of purchasing similar goods. 

The burden of proof 

If the customer wishes to fix, substitute, reduce the price or refuse the final right, and if the defect is found within six months of delivery, the defect is believed to have existed at the time of delivery, unless the trader is able to prove otherwise, or unless this inference is inconsistent with the circumstances, such as clear signs of misuse. This rule is also referred to as the ‘reverse burden of proof’ as it reverses the usual rule that each part of the claim needs to be proven by an individual making a claim. 

If more than six months have passed, at the time of sale, the customer needs to show that the defect was present. If they exercise the short-term right to refuse goods, they must also show the defect was there at the time of delivery. Some defects do not become evident until sometime after delivery, and it is sufficient in these instances to show that at that time there was an underlying or concealed defect. 

Exceptions: where an argument cannot be made by the user 

A buyer will not sue for defects brought to their notice prior to the sale or whether the products were inspected before purchase and any defects were evident. 

A customer is unable to seek harm even if they simply change their mind about wanting the products. 

If they choose the commodity themselves for a reason that is neither evident nor made clear to the trader, neither can a buyer say and they then find that the item is actually unsuitable for that purpose. For example, if a customer purchases a hedge trimmer and breaks it trying to cut down a tree, unless the trader told them it would be appropriate for tree-felling, they will not make a claim. 

There is no right for a customer to report defects that occur as a result of fair wear and tear. 

Time limits for legal action 

Consumers should assume that goods would not fail prematurely, even though those goods have a reasonable life expectancy of many years. There is a time limit, however, that essentially prohibits customers from filing a claim in the courts. 

Normally, a consumer cannot bring a lawsuit to court more than six years after the breach of contract has occurred (usually the date of delivery in a contract for the sale of goods). 

This does not mean that all products have to last this amount of time, but this is the time period that the law requires legal action to be taken by a customer. 

Contract conditions that are unfair

In consumer contracts, the Consumer Rights Act 2015 covers the use of unequal terms. See ‘Unfair contract conditions’ for more detail. 

Furthermore, under the Consumer Protection from Unfair Trade Regulations 2008, any attempt to deceive the consumer regarding their rights is an offence. For more information on these Rules, which cover the duties of traders towards customers in general, see ‘Consumer safety from unfair trading.’ 

Other laws concerning arrangements with consumers 

Regulations 2013 Consumer Contracts (Information, Termination and Additional Charges) 

For most ‘distance contracts’ (those made via the internet etc) and ‘off-premises contracts’ (those made, for example, in a consumer’s home), these Regulations provide customers with a 14-day cooling-off period. They often require such data to be presented to customers, both for off-site contracts and when customers enter into an arrangement on the business premises of a broker. Traders are unable to make secret charges and only with the express consent of the customer can additional charges be made. 

In transit, failure or damage 

If the trader arranges to sell products to a customer, the goods remain at the expense of the trader until delivery. It is also the duty of the trader to ensure that the goods are not lost or damaged in transit and/or that sufficient insurance is taken out. 

Misrepresenting

A misrepresentation is a false statement of fact made by a person or his representative that allows someone else to enter into a contract with them. 

Depending on whether the misrepresentation was made in a dishonest, incompetent or innocent way, the party who relied on the misrepresentation would be entitled to a remedy that could involve rescission, reimbursement and/or compensation (which implies unwinding or cancelling the agreement). 

Security of consumers from unfair trade regulations 2008 

These regulations provide customers with an additional and alternate right of redress. In the case of misleading or deceptive marketing tactics being used by a broker, the customer may be entitled to seek compensation and/or price reductions or to cancel the contract entirely. 

Under the Regulations: Misleading and Aggressive Commercial Practices: New Private Rights for Customers, the Department for Business, Energy and Industrial Policy (BEIS, known as the Department for Business, Innovation and Skills at the time) has issued guidelines on the right of consumers to redress. 

Act 1987 of Consumer Security (Part 1) 

This law allows an individual to seek liability if a faulty product injures them. A argument may be made against anybody from producer / importer to supplier in the supply chain depending on the circumstances. 

Compensation for harm to personal property can also be sought under this Act (but not damage to business property). 

Act 1999 Contracts (Rights of Third Parties) 

This legislation extends rights to everyone who plans to profit from the transaction. For instance, if anyone purchases a gift for a friend and the gift happens to be defective, either the recipient or the gift purchaser may take action for violation of the contract (as long as it was made clear that the goods were to be given as a gift). Traders may use contract terms to restrict third party privileges, but in practise, communicating directly with the receiver of a gift would always be easier (and have a better consumer experience) for the trader. 

The name of the trader 

It is important for the user to know, or be able to find out, who they are dealing with. At their place of operation, on key business papers and on blogs, a trader’s name and address must be shown. The details must also be made available to customers before and if a customer asks for a contract. For more detail, see ‘Company and Company Names.’ 

If a trader fails to report that they are a limited company and there is then a contract violation, as individuals, the customer will be entitled to sue against the company managers. If a trader does not reveal that they are working as an agent for anyone else, therefore it might be possible for the customer to make some argument directly against that trader. 

Common Questions

  • A customer does not generate a receipt; does something have to be done by the trader even if the products are faulty?

    For the customer to provide or generate a receipt, there is no legal obligation. They might ask the customer to provide proof of purchase if the trader does not remember the consumer purchasing the item. It may be a receipt or cheque stub for a credit card or something that shows when and where the item was purchased. 

  • The manufacturer provides a warranty; can the trader directly refer the customer to that manufacturer?

    The contractual rights of the customer shall be with the trader who has sold the products to them and the guarantee provided by the manufacturer shall be in addition to those rights. A customer may choose whether to follow the trader or the producer and neither may deny their rights to the consumer and guide them to the other. The trader could, however, have rights against their supplier in exchange.

  • If a trader sells products or seconds for sale, certainly the buyer does not have the same protection against the trader as if fresh or ideal goods were bought?

    If the items are on sale or sold in seconds, the same rights apply. However, factors such as price, age and easily recognisable defects will be taken into account when determining the standard of quality that is satisfactory.

  • Somebody asks for a quote from a trader; how does this vary from an estimate?

    Normally, a quote is a fixed price, whereas an estimate is typically a rough approximation of what the items will cost.

  • Can a trader placed a sign in their shop saying in certain circumstances that refunds are not given?

    It is unconstitutional to attempt to exempt the contractual rights of a customer, so a notice of ‘no refunds’ is not allowed. A trader may wish to go beyond what the law needs and give customers who change their minds an exchange or refund policy. A trader may show a notice providing details of such a policy, but it is recommended that the trader seek advice from their local trading standards service regarding the wording of the notice. See ‘Reading policy on returns’.

  • A customer rings a retailer to say that the television they purchased in the store of that retailer during the previous week is faulty and they demand that they retrieve it from the retailer. Will the trader insist that it is returned by the consumer?

    A customer contract may require the consumer to return products that have been rejected. The trader must bear the fair return cost other than the cost of returning the customer to the location where they took delivery. So, if the customer picks up the TV from the store and the contract states that if they decline it, they have to put it back, the trader will demand that they return it. If the contract says nothing about returning goods, then only the trader has to make it available to retrieve the goods (but if they choose to take it back themselves, they cannot claim the cost back from the trader).

  • A trader gives a credit note to a customer, but they can't find something they want. Does the trader then have to offer a refund and how long is the credit note expected to run for? Instead of a refund, should a trader sell a credit note?

    In the first case, the trader cannot compel the customer to accept a credit note if a consumer returns product which do not adhere to the contract. Using the initial method of payment or as cash, the customer may insist on a refund (or its equivalent). Similarly, if the trader has a policy of goodwill returns that guarantees a refund if the buyer changes his mind, the consumer should expect this guarantee to be upheld by the trader. If, although they do not have to do so, a customer has been tricked or coerced into accepting a credit note, they will also ask the trader to substitute it with cash or the original payment form. In comparison, if the buyer has no legal right to a refund or makes an informed decision not to exercise this right, the trader may give a credit note. The trader will then establish an expiry date if, at the time of question, it informs the customer of this time span.

  • A customer insists on a substitute, but the commodity is no longer produced and none is in stock.

    A trader can give a repair to the customer, a price reduction or allow the consumer to reject the products. Only if this does not cause the customer undue discomfort would a repair be appropriate. 

  • A trader is unable to decide if an object is defective or whether it has failed because of misuse. What are they meant to do?

    If a customer wants to exercise the right to refuse the products in the short term, it is for them to show that the fault is not due to misuse. If, within six months of delivery, a customer claims a repair or replacement (or, if they fail, a price reduction or rejection) it is for the trader to show misuse. The onus falls back on the customer after six months. In any event, the trader may wish to seek a second opinion, such as from the manufacturer or an independent expert, if the trader cannot agree on the cause of the fault. If the customer and the trader are to be used by an impartial expert, everyone should preferably agree to this in writing.

  • A customer sets a fixed date on which the products are delivered and the trader fails to deliver them on time; is the consumer entitled to cancel the contract?

    Yes; if the customer has made it clear that it was necessary to deliver within the agreed period, or if this is evident from the circumstances of the contract (for example, the flowers ordered for a wedding) and the trader has not complied with it, the consumer may treat it as a breach of the contract and terminate the contract.

Selling products alongside services / digital content: mixed contracts 

An agreement between a customer and a trader will not only be for commodities in certain situations, but may also include services and/or digital content. How the various elements work together is set out in the Consumer Rights Act. For more details, please see ‘Mixed contracts’. 

Summary on Consumer Rights 

BEIS collaborated closely with business and consumer associations to create a plain English description of the main elements of the Act in order to help corporations and customers understand the reforms. This ‘summary of consumer rights’ is not meant to be a detailed consumer rights guide, but rather a general overview of the key consumer rights, concentrating on the most popular issues. 

For you to show this material, there is no legal obligation, but it could help you make things easier for your customers and staff. The information sheet template is a simple layout and you may want to adapt it to your business needs by providing a return policy that draws on the legislative specifications, for example, or adding examples from your own company (maybe replacing the word ‘goods’ with something you sell). The terms are legally valid and outline the rights of your customers, so we recommend that these words be tailored and incorporated instead of removing or changing the wording given. 

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