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Sharon Jones, Partner

Sharon Jones, Partner
t: 0115 976 6284
f: 0115 947 5246
sjones@brownejacobson.com

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An Overview of Consumer Rights Under the Sale and Supply of Goods to Consumers Regulations 2002

Summary

 

The Sale and Supply of Goods to Consumers Regulations 2002 (the "Regulations") have two key features:

 

1) Where goods sold to a consumer do not conform to the contract of sale at the time of delivery, the buyer has the right to require the seller to repair or replace the defective goods at the seller's cost or provide a full refund.

 

2) If the buyer returns goods within six months from the date of sale, there is a presumption that the goods were defective at the time of delivery i.e the burden of proof falls on the seller to show that the goods were not defective.

 

Background

 

The Regulations, which came into force on 31st March 2003, implement EU Directive 1999/44/EC (the "Directive") and are designed to enhance consumer rights across Europe. The Directive provides specific remedies in circumstances where faulty goods are supplied in an attempt to boost consumer confidence in buying goods from retailers across Europe.

 

The sale of goods to consumers is generally governed by the Sale of Goods Act 1979 (the "1979 Act") and the Supply of Goods and Services Act 1982 (the "1982 Act"). The Regulations amend both these Acts and apply to goods supplied to consumers by way of sale, lease, hire and hire purchase.

 

For the purposes of the Regulations, "Consumer" means any person who is acting outside his/her trade, business or profession.

 

This note sets out how the Regulations will operate in the UK and in particular how they change existing UK consumer law.

 

Basic Principles

 

Before setting out what new rights have been granted to consumers under the Regulations it's important to understand the basic principles of consumer law that are derived from the 1979 Act and the 1982 Act:

 

1. Goods supplied to consumers must be of satisfactory quality and fit for their purpose when taking into account any description and any special requirements of the consumer that are made known to the seller. The quality of goods is determined by their appearance and finish, freedom from minor defects, safety and durability.

 

2. If goods supplied are faulty at the time of sale the consumer is entitled to a full refund if the defect is reported or the product returned within a reasonable time of the sale. Alternatively, consumers are entitled to a reasonable amount of compensation in respect of goods that were defective at the time of sale, for up to six years after sale i.e. any claim for compensation following discovery that the goods were faulty at the point of sale must be made within six years of purchase.

 

3. Consumers are not entitled to a remedy in respect of fair wear and tear, misuse or accidental damage, or if they simply no longer want to keep the goods. There is also no remedy if the consumer knew about the fault before purchase or they would have been aware of that fault upon reasonable inspection.

 

4. If you sell goods or services to consumers by the internet, mail order, phone or fax, the Consumer Protection (Distance Selling) Regulations 2000 apply. The Distance Selling Regulations provide the consumer with an unconditional right to cancel an order if they provide you with written notice within seven days after the goods are received, or in the case of services, seven days from the day after the consumer agrees to go ahead with the contract. Furthermore, if you do not inform the consumer of this seven-day cooling off period before they place the order and after they have made the order, the cancellation period can be extended up to a maximum of three months and seven working days.

 

5. If a consumer suffers consequential loss that is caused by the supply of a faulty product, the consumer may be able to claim damages in addition to a refund for the price of the goods. Such consequential loss may take the form of the consumer suffering injury, damage to other property or the consumer may simply incur extra expense as a direct result of purchasing the defective goods.

 

Additional Remedies under the Regulations

 

In addition to the rights set out above, consumers can now choose to request that the goods are repaired or replaced and if this is not possible, or is disproportionately costly to you, a partial or full refund (whichever is reasonable in the circumstances). So, if it would be disproportionately costly for you to repair goods rather than simply replace them, you are entitled to refuse to provide their repair. To determine whether or not a remedy would be disproportionately costly the following factors are taken into account:

 

· The value which the goods would have if they were not defective;

· The significance of the defect; and

· Whether the other remedy could be effected without significant inconvenience to the consumer.

 

Any remedy must be provided without significant inconvenience to the consumer and any repair or replacement must be provided within a reasonable time at your cost including the cost of any labour, materials or postage.

 

Importantly, consumers are entitled to request another remedy if an initial request to remedy a defect does not prove satisfactory.

 

Reversed Burden of Proof

 

As a general rule, if a consumer demands a full refund, they must show that the goods were defective at the time of sale.

 

The Regulations amend the 1982 Act so that this rule does not apply where the consumer returns defective goods within the first six months of purchase and requests a repair or a replacement or, a partial or full refund. In these circumstances there is a presumption that the goods were defective and the burden of proof is on the retailer to show otherwise. After six months from the date of sale the general rule applies i.e. the consumer must show that the goods were faulty at the time of sale.

 

Public Statements

 

Under the 1979 Act, goods should match any description given to them. The Regulations go further than this. Section 14 of the 1979 Act has been amended to require any public statements made by manufacturers, importers, producers and retailers about the characteristics of the goods to be factually correct. Therefore, any statements you make in advertising campaigns or on labelling will now form part of the contract with the consumer and the consumer will be entitled to one of the remedies set out above if the consumer can show that the statement is false.

 

You will not be responsible if:

 

· you were not and could not reasonably have been aware of the statement; or

 

· before any goods were sold, you publicly corrected the statement; or

 

· the consumer's decision to buy the goods could not have been influenced by the statement.

 

Mitigating Loss

 

Although the Regulations are pro-consumer, the DTI has confirmed that consumers should take basic steps to mitigate their loss. In particular, consumers should report faults as soon as possible. If they do not, as time goes by (after the first six months) it becomes increasingly difficult for them to prove that the goods were faulty at the time of sale. In addition, if a consumer attempted to continue using faulty goods, or even attempt repair themselves, it is possible that the goods could deteriorate further. You would not be responsible for any additional damage caused in this way.

 

Another final point is that consumers must ensure that they service the goods as appropriate, following any user/care instructions. Otherwise the consumer is likely to have contributed to the defect.

 

This briefing note is designed to provide a summary of the subject matter covered. It does not purport to be comprehensive and is not a substitute for detailed advice. The information is based on the position at June 2003. © Browne Jacobson 2003.