Who is a consumer?
A consumer is someone who intends to order, orders or purchases goods or services for personal use, as opposed to buying something on behalf of a business.
What is a consumer contract?
A consumer contract is that between traders and consumers and is a legally binding agreement between you and the consumer concerning the sale of goods or digital content, or the supply of services (with or without goods).
Contracts can be made verbally or in writing or by your and the consumer’s conduct (‘silent contracts’).
A legally binding consumer contract is made when there is an offer and an acceptance of the offer.
An invitation to make an offer to buy is known as an ‘invitation to treat’.
The contract must be for consideration and made between people who are legally capable of making a contract.
Not all contracts will have written terms. In a written contract the terms must be written in plain language to avoid being misleading and unfair, the terms of the contract can appear on the back of the contract, on your website or in the back of your brochure etc. Any terms that are individually agreed with the consumer are called ‘express terms’. This could be the price of the goods or service if it is not fixed. Any terms that are the same across all your consumer contracts, such as payment or delivery arrangements, are called ‘standard terms’.
In consumer law, some terms are automatically part of a contract for the sale of goods or the supply of services (with or without goods). For example, it is to be expected that products will be advertised accurately with clarity, goods will be of satisfactory quality as described and fit for purpose. particularly online or if the customer hasn’t been given a chance to inspect the goods before purchasing them. It is also expected that services will be carried out with reasonable care and skill, within a reasonable time and at a reasonable charge.
Consumer contracts are now governed by The Consumer Rights Act 2015 which came into force on 1 October 2015 and only applies to items bought after 1 October 2015. The overall purpose of consumer legislation is to provide fairness and clarity for consumers. Misleading actions or omissions, bait advertisings, misrepresentation in all its forms and aggressive sales tactics are all illegal under consumer law.
Unfair terms in consumer contracts regulations
Terms and conditions should be transparent, prominent and easy to understand. They should not excessively exclude liability. Terms which give the trader a right to fundamentally change the goods or services to be supplied under the contract will be considered unfair, as will any clauses which entitle them to unreasonable compensation should the consumer decide to cancel the contract.
You can’t enforce unfair terms in a consumer contract, or unfair consumer notices (eg signs on a shop wall or in a car park).
You can never enforce terms or notices that try to avoid your responsibility for death, injury, faulty goods, goods that aren’t as described and selling goods that aren’t yours to sell, for delays, unsatisfactory services or not doing what was agreed.
Your contract terms might also be unfair if they weigh the contract significantly in your favour, by providing for excessive cancellation charges and automatic loss of all upfront payments or by creating unbalanced rights, eg. being able to cancel a contract at any time, but requiring the customer to give 3 months’ notice or by allowing you to increase the agreed price at a later date.
Your contract won’t be unfair just because it sets a price that’s higher than other business charges.
Breach of contract
If you or the consumer do not do what you agreed to do as set out in the contract – for example, you might not deliver the right goods or provide the service on time, or the consumer might not pay – this is called being in ‘breach of contract’. If you are in breach of contract the consumer may claim for repair or replacement of goods, full or partial refund, or damages (money compensation).
It’s up to the courts to decide if the terms in your contract are unfair and you can be taken to court by the Competition and Markets Authority or a local trading standards office to stop you from using unfair terms or notices.
For expert assistance regarding drafting bespoke contracts and enforcing them, contact email@example.com or WhatsApp us on 07583452230 and we can connect you to the right professional. Visit www.bizlawuk.co.uk to find out more about how we can help you with our other services. If you find this information useful, please follow our social media platforms, like and share.