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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.