Pre-Contract Sales & Marketing

Any information about a product given to your customers by means of salespeople, brochures or other means (such as your website) are now legally binding if they materially affected the customer’s decision to go ahead with a purchase.

If the information a customer has acted upon turns out to be inaccurate:
– They may have a claim against your business for wrongful misrepresentation.
– They may be able to reject the products for a full or partial refund.

To best protect yourself from such claims, ensure that any pre-contract information issued to any customer is accurate and consistent with the product that they will be receiving should they choose to go ahead with the purchase. Brief your salespeople and update any information online or on paper.

Demonstration Models/Samples

Demonstration models must now be consistent with the products that a customer will eventually purchase. Similar to statements made in pre-contract sales and marketing, if a customer makes their decision to go ahead with a purchase based upon what they have seen demonstrated, the product they receive must be consistent with the demo model. Again, if the product a customer receives is not inline with a demonstration model that they have seen, they may be able to claim for wrongful misrepresentation or for a refund.

To tackle this issue, ensure that if there are any differences between a demonstration model and the product a customer is interested in, these have been explicitly disclosed to them.

Terms and Conditions

Whilst there were already guidelines in place for the terms and conditions of consumer contracts (in the Unfair Contract Terms Act 1977 for example), the Consumer Rights Act 2015 has clarified what is required of businesses dealing with consumers.

Terms in consumer contracts must be:
– Fair;
– Plain and intelligible to the extent that consumers can fully understand what they are contracting for; and
– Important terms (such as warranties, exclusions, payment schedules and consumer obligations) must be sufficiently brought to the attention of the consumer.

This part of the act certainly commands attention. Ensure that the important terms (as highlighted above) are clearly brought to the attention of your customers. It’s also worth reviewing the contract as a whole to see whether it is accessible to consumers – not just legal professionals!

Consumer Right to Reject

Under the Consumer Rights Act 2015, products and goods must be:
– Of satisfactory quality;
– Fit for the purpose advertised;
– As described in any printed materials or by sales staff; and
– Consistent with any sample shown to consumers.
If your product fails to meet any of these standards, a consumer has a right to reject (for a full refund other than in the case of motor vehicles) for a period of up to 30 days.
The product need not be faulty; it must only be inconsistent with any of the above criteria.

Repair/Replacement Limitations

Retailers now have a single chance to repair or replace faulty goods.

If you fail to repair or replace a faulty product within a reasonable time, the consumer may be entitled to a price reduction.

Where a consumer has opted for repair or replacement instead of rejecting the product, failure to return a suitable product to them in the first instance will result in the activation of their right to a price reduction or to rejection.

Rights of Cancellation

One of the most complex areas of recent consumer contracts regulations (reinforced by the new Act) relates to the rights that consumers have to cancel a contract made away from your place of business. These are referred to as “distance” or “off premises” contracts, and may include online sales and downloads as well as sales made in the customer’s home, at an exhibition or other venue that’s not your usual business premises.

If you sell in any of these ways, get in touch – the cancellation rights and the rights to a refund vary depending on the exact circumstances, and it’s important that your business provides the correct level of cancellation service appropriate to the particular ways that it sells.

Summary

The provisions of the Consumer Rights Act 2015 tighten up regulations on businesses dealing with consumers. It is vital to ensure your business moves into line with the new provisions to prevent losses, of both profit and customers. Overall there are several actions you can take to bring your business up to date with the new regulations. You should make sure that:
– Any products are fit for the purpose advertised.
– Any descriptive material available to consumers is accurate and consistent with the product they would receive.
– All salespeople are providing wholly accurate, honest information about any product.
– Any sample shown to a consumer is consistent with that which they would receive.
– If there are likely to be any differences between display and end products, these are adequately highlighted.
– Your terms and conditions are plain and accessible to the average consumer, and all important terms are suitably highlighted and brought to the consumer’s attention.

If you sell to consumers or small businesses and are worried that your terms and business processes might not be up to scratch to comply with the new law, give us a call. We’ll be pleased to help you develop your sales and delivery processes, and update your contracts, to ensure your business complies with the law and provides excellent customer service!

Callum Sommerton
Devant