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New Consumer Contract Regulations – Do Your Business Practices Comply?

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Paul Trincas

Paul Trincas

The Consumer Contract Regulations came into force on 13 June 2014 and contain a number of pitfalls for unwary traders. Paul Trincas, a litigation specialist with Charles Lucas & Marshall, covers the headline points.

The Consumer Contract Regulations apply to all qualifying contracts made after the 13 June.
They supersede the Distance Selling Regulations and Doorstep Selling Regulations. They regulate ‘on-premises’, ‘off-premises’ contracts and distance selling. Distance selling includes online sales, telesales or sales via a catalogue but is outside the scope of this article.

Q – Will the Regulations apply to my business’ activities?

The Regulations cover contracts for the sale of goods, digital content and / or supply of services where the seller is a trader and the buyer a consumer. Most tradesmen and professional services providers will be caught. Exceptions do apply and these are worth checking.

Q – Why is it important to identify where the contract was made?

The Regulations distinguish between contracts made ‘on’ the trader’s business premises and contracts made elsewhere (e.g. a consumer’s home). Different rules apply to each type of contract. In practice, identifying whether a contract is on- or off-premises can prove difficult: for example, a contract concluded on the business premises of the trader after the consumer has been ‘personally and individually addressed’ by the trader elsewhere might be treated as an off-premises contract.

Q – What is the significance of the contract being ‘on-premises’?

The Regulations require the trader to (1) provide to the consumer certain pre-contract information; (2) seek express prior consent for additional payments; (3) deliver goods within 30 days unless otherwise agreed; and (4) charge the consumer no more than the basic rate for any telephone calls about the contract.

Q – What is the significance of the contract being ‘off-premises’?

The requirements detailed above still apply and in addition (1) the trader must provide the consumer with a copy of the contract; (2) in some cases, the consumer will have a right to cancel and must be told as much; (3) if applicable, the trader must not begin the service before the end of the cancellation period unless requested to do so.

Q – How does the right to cancel work?

The cancellation period begins either the day after the consumer has received the goods or (if a services contract), from the date on which the contract is entered into. The cancellation period ends after a period of 14 days from the date on which the consumer is given the pre-contract information (up to a period of 12 months from the last day of the ‘normal cancellation period’). A consumer can cancel by making an unequivocal statement to the trader to that effect. If the consumer cancels, no contract is formed and the consumer will be entitled to reimbursement of monies paid.

Q – Is there any way of overcoming the cancellation period?

In relation to services contracts, the consumer can make a written request that the services begin during the cancellation period. If the consumer has done so, he must pay for so much of the services as have been performed up to cancellation provided certain conditions are met. In practice, the trader is advised to provide the consumer with a carefully drafted ‘instructions to proceed’ form for completion.

Q – There appears to be a number of traps for the unwary trader!

Indeed there are! Failure to provide the consumer with the pre-contract information will mean that the trader is in breach of an implied term of the contract. In relation to off-premises service contracts, the consumer might escape payment altogether by exercising cancellation rights within 12 months of the normal cancellation period, despite the services having been provided. Failure to provide the pre-contract information in relation to off-premises contract is also a criminal offence.

For further information contact Paul Trincas on 01635 521212 or paul.trincas@clmlaw.co.uk

Written by Paul Trincas

October 21st, 2014 at 10:00 am