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).
- You and the consumer can make a contract verbally or in writing, or by doing business together (‘silent contracts’).
- The offer and the acceptance of an offer constitute a legally binding contract.
- The term ‘invitation to treat’ refers to an invitation to make an offer to buy.
- The contract must be for consideration and made between people who are legally capable of making a contract.
Who is a consumer?
- Unlike purchasing something on behalf of a business, consumers intend to use goods or services for personal use.
Contract terms of consumer contract:
Not all contracts will have written terms. Written contract terms should be written clearly and simply to avoid being misleading. These can appear on the back of the contract, on your website, or on your brochure, etc. So “Express terms” are terms that are individually negotiated. A non-fixed price could be this. ‘Standard terms’ refer to those terms you have in all consumer contracts, like payment schedules or delivery arrangements.
However, 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). Ideally, products will be advertised accurately and clearly, goods will be of sufficient quality and fit for purpose, etc. So when purchasing an item online or if the customer hasn’t inspected it before buying it. It is also expected that services will be carried out with reasonable care and skill, within a reasonable time and at a reasonable charge.
On October 1, 2015, The Consumer Rights Act 2015 came into force. And applies to consumer contracts purchased after that date. 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 contract regulations
- Terms and conditions should be transparent, prominent, and easy to understand. They should not excessively exclude liability. If the trader cancels the contract in the event of a fundamental change. It would be unfair to give excessive compensation for the cancellation.
- However, You can’t enforce unfair terms in a consumer contracts, or unfair consumer notices (eg signs on a shop wall or in a car park).
- You may never enforce conditions or notifications that attempt to absolve you of liability for death, damage, defective items, things that aren’t as described. And selling goods that aren’t yours to sell, as well as delays, poor service, or failure to perform as promised.
- Your contract terms might also be unfair if they weigh the contract significantly in your favor. By providing for excessive cancellation charges and automatic loss of all upfront payments or by creating unbalanced rights. So if the customer is free to cancel at any time but must give 3 months’ notice, or by increasing the price at a later date.
- In addtion to that, your contract won’t be unfair just because it sets a price that’s higher than another business charge.
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).
- The courts will assess whether the terms of your contract are unfair. Moreover, the Competition and Markets Authority can sue you to prevent you from using unfair terms or notices.
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