Fight For Your Rights: Part II

Thursday 23 July 2015

From 1 October 2015, the new Consumer Rights Act 2015 replaces a number of existing laws relating to the supply of goods, services and digital content for contracts made from that date. Here are three key changes:

(1) A more straightforward remedy to a consumer who has been given misleading information in the sale of goods or services. At present, a consumer can only pursue a separate action for misrepresentation because the misleading information is not considered to form part of the contract. Under the new Act any spoken or written statements made by the trader to the consumer will be considered binding.

(2) In general, and under the existing law, the written terms in a contract or Notice must be clear and transparent. Personal injury and death arising from negligence cannot be excluded nor can liability in respect of the same be limited. If a clause is deemed to be unfair, the rest of the contract will take effect as far as reasonably practical and where a term can be read to have more than one meaning it will be interpreted in the way that is most favourable to the consumer. Any term or Notice must be clear and transparent and clearly brought to the consumer’s attention.

The legislation covers what is deemed to be ‘fair’ in consumer contracts and anything that is considered unfair will not be binding on a consumer. Generally, to be considered unfair a term or Notice will create a significant imbalance between the parties to the detriment of the consumer.

Helpfully, the new Act provides an “indicative and non-exhaustive” list of terms which may be considered unfair which include both disproportionately high charges to the consumer when they have exercised their right to cancel and terms which allow the trader to alter the characteristics or price in the contract once the consumer is bound.

(3) “Digital content” is defined in the new Act as any data which is produced and supplied in digital form. Given the technological advances of the past few decades and the increase in online sales platforms there is a huge array of digital products that fall within the Act, such as computer games, virtual items purchased with computer games, television programmes, films, books, computer software, mobile phone apps and systems software for operating goods.

Although existing separately from standard consumer contracts, consumers contracting for digital content can also expect to have the same rights of satisfactory quality, fitness for purpose and as described. Provision has also been made to provide guidance on rights related to ‘free’ digital content and a consumer’s rights to damages, and how these are to be assessed when digital products affect products of a higher value than the digital product itself – i.e. computer virus software sold with an expensive computer.

Consolidation of the existing rules is certainly comprehensive however it is thought it will create a better compliance framework for businesses and consumers alike.