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Legal
Basics
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Consumer Issues
Last modified:
24 July 2007
Buying Stuff
We are all consumers. We all buy…..stuff.
Whether its stuff that we need just to live or stuff that we think we need, or
stuff that we just …..want. And whenever we go to buy stuff, whether they are
actual goods, or someone’s services, then we enter into a contract to buy
them, and once we have entered into that contract both we and the seller are
bound to follow it through. If either of us fails to do so then we are in breach
of contract and the aggrieved party has legal rights that they can try and
enforce.
We are all making legal contracts every day. A contract
exists where one person offers to sell or do something for another person, who
agrees to do something in return, usually hand over some cash. There is nothing
in law that says a contract has to be in writing (but one major exception is if
you are buying or selling a house), and in fact no words even have to be spoken.
Picking up a magazine in a shop and then handing over the £1 cover price is a
legal contract. The only advantage in having a contract in writing is that it is
easier to prove who agreed to do what, but even that is not fool–proof. If
there is a written contract then you are generally going to be bound by the
terms contained in that contract, whether you bother to read them or not. So the
old adage about reading the small print is absolutely true.
Generally we are all free to enter into contracts as we
please, but over the last few years the law has tried to strengthen the position
of the consumer, you and me, when entering into contracts with businesses for
the supply of goods or services. Certain basic terms are automatically included
in any such contract, and other less advantageous terms are automatically
excluded.
If you are buying goods, then the Sale of Goods Act says
that those goods must be of “satisfactory quality” and fit for their normal
purpose. “Satisfactory quality” means well just what is says. The goods must
be in the condition that you would expect them to be in, bearing in mind the
price you paid and their purpose etc. They must also do the job for which they
were designed and for which you bought them. For example a chair that is
perfectly made and therefore of reasonable quality, but which is too
uncomfortable for anyone to sit on, would not be fit for the purpose for which
is was bought.
If you buy something in a shop and it fails to meet
these requirements then you are entitled to your money back, despite what any
shopkeeper may tell you to the contrary. They cannot insist that you “take it
up with the manufacturer”. Your contract is with them. It is up to them to get
their money back from the manufacturer. However they are entitled to insist that
you provide proof of purchase, such as a receipt (although it doesn’t have to
be provided if you can prove your purchase in some other way eg credit card slip
or statement), and you have to have returned the goods within “a reasonable
time”. This will depend on the type of goods, but it is generally a very short
space of time after you bought them. The shorter the better. So if you have a
problem don’t delay.
There are a few other ruses that we also ought to scotch
– the fact that goods were bought second-hand or in a sale does not mean they
are not covered by the same legislation. They are, but your expectations of
their quality and fitness for purpose will need to be refined somewhat,
depending on what you paid for them and how old they are.
Some shops will also suggest that they “don’t give refunds” and that you must accept a credit voucher. If you are entitled to take the goods back because they are faulty then you are entitled to have your money paid back. You do not have to accept a store credit.
The seller also has other obligations – his goods must
meet their description – that is they must be what he says they are; he must
deliver them “within a reasonable time” if you don’t take them away with
you; and he must display the price. As a buyer you are obliged to pay the agreed
price and to take the goods.
In contracts for both goods and services the snappily
entitled Unfair Contract Terms Act and, the even snappier, Unfair Terms in
Consumer Contracts Regulations 1999, try to make sure that consumers are not
bamboozled by unfair, unreasonable or plain unfathomable contract terms.
Contracts should be written in clear understandable language. But, as I have
said before, you are expected to have read the contract, and just because it is
long and in small print does not mean it is incomprehensible.
That is all very well if you have been out and bought
the goods from a shop, but more and more of us are shopping by mail order,
telephone or now on the internet. What sort of protection do we have then? Well
the answer is just the same rights. In fact you have not only got the rights
under the Sale of Goods Act, but also some new rules under the Distance Selling
Regulations.
Put simply these Regulations say that you should be
given clear information about the order and the company you are buying from,
along with a cooling-off period, and protection against credit card fraud and
the menace of unsolicited goods.
The Regulations are quite detailed, but here goes
Before
you decide to buy, the seller must give you:
They
must also tell you about
And
then after you buy, the trader must also provide you with the following
information:
In
addition to all that you have a cooling off period of 7 days from the date on
which the items are actually delivered to you, during which time you can change
your mind and cancel your order. If you decide you do want to cancel then you
should do this in writing – post, fax or email would do, but you may need to
prove that you have actually done it and that they have received it, so a
recorded delivery letter may be your best bet.
You
have to have taken care of the goods in the meantime and you must either return
them yourself or make them available for collection (although the seller could
actually charge you for this). You are entitled to expect your money back within
30 days.
The
Regulations also give you protection if someone fraudulently uses your credit
card to buy goods over the phone, by mail or the internet. You can cancel the
payment and get a refund from the card company. Finally if someone sends you
goods out of the blue without you ordering them you are now entitled to keep
them and treat them as a gift. Could somebody please send me a Ferrari?
Perhaps
here is a convenient time to mention the benefits of buying an item using a
credit card. Under the provisions of Section 75 of the Consumer Credit Act
1974 if you buy goods or
services costing in excess of £100 using a credit card, should the goods or
service prove to be defective, you will have an equal claim for compensation
against both the seller of the goods or service and the finance company.
Section
75 only applies to credit transactions, therefore, the finance company does not
have any liability for purchases that have been paid for by chargecards as these
are debit cards not credit cards, for example American Express and Diners Club. These
are cards where you have to pay off
the outstanding balance every month. This benefit may also apply (the court's
cannot decide one way or the other) if you have
purchased goods abroad, which may prove very handy.
There
are other forms of credit that you will be offered in the High Street eg credit
sales, interest free credit and hire purchase for example. Always read what you
are signing and bear in mind that if you sign a credit agreement on the
trader’s premises it is not
cancellable. If you sign it elsewhere then it is. You will have 5 days from the
day that you receive a second copy of the agreement within which to cancel.
Buying
Services
“Services” covers a whole
host of situations that we all come across every day, including having your milk
delivered, getting a tap fixed, your car repaired – in fact any situation
where someone is doing something for you, rather than just handing over a
product.
As with buying goods, the law has decided that we consumers need some extra
protection from the unscrupulous trader, whether he is a one-man band or a
multi-national company. This is
covered by the Supply of Goods & Services Act. This says that if work is
carried out by a trader that you can expect it to be done
If
it does not meet these standards then you may be entitled to sue for
compensation.
It
also says that if any goods or parts are fitted as part of the contract then
they must be:
(as
we saw earlier with goods bought in a shop).
So
what do you do if you think the service you have received does not meet these
standards?
If
you think the work has not been carried out with reasonable care and skill, then
you will usually have to give the trader a chance to put things right at his own
expense. If you don’t allow him this chance then the amount of compensation
you can claim for slipshod work could be affected. As soon as you become aware
of any problems then you must tell the trader. You need to make sure that you
detail the specific problem and this should preferably be confirmed in writing,
with a list of the specific problems to be sorted out and any work that the
trader has agreed to do to fix the problem. If the trader refuses to accept
there is a problem or cannot or will not fix it, then you can get someone else
to sort it out for you and then sue the trader for the cost of any additional
works that you have had to pay for.
If
there is no specific completion (or even start) date for a project, then the
trader only has to deal with it within a reasonable time. What is, or is not,
reasonable will depend on the type and complexity of the job involved. If you
want to be more certain that your job will actually get done, then you need to
pin your trader down and make time "of the essence". This means that
you set a specific date for the work to be finished. If it is not then you can
consider the trader to be in breach of contract.
Whenever
possible try and get any trader to agree a price for the job, or at least set
the basis of charging, before he
starts work. That way you know what you are letting yourself in for. Be clear
whether any sum stated is an estimate ie just an approximate idea of what the
job will cost, or a quotation which is usually regarded as a confirmed price.
If
you are not happy with the work then you may also want to consider holding back
some of the agreed payment. This keeps you in a stronger bargaining position
when trying to get things sorted out. You must tell the trader what you are
doing and why, and any retention needs to be reasonable or you will yourself in
hot water with the courts.
As we have said before in contracts for both goods and services the snappily entitled Unfair Contract Terms Act tries to make sure that consumers are not bamboozled by unfair, unreasonable or plain unfathomable contract terms. A contract should be written in clear understandable language. But, as I’ve said you are expected to have read the contract, and just because it is long and in small print does not mean it is incomprehensible. If you are unsure don’t sign. Take the proposed contract home and read it through in the bath or perhaps in bed. They can be a great way to get to sleep.
If
you have read the sections about buying goods and buying services already then
you will not be surprised to hear that there is also legislation that tries to
help the consumer to get a fair deal when they enter into any form of hiring
arrangement. This too is covered by the Supply of Goods & Services Act.
You
are entitled to expect that goods that are hired will be
You
have exactly the same rights in respect of hired goods that don't meet these
expectations as for goods that you buy, so if they are faulty, you may have the
right to a refund, repair, replacement or reduction in the price.
This
covers both straight hiring of goods for example hiring a sanding machine for a
few days so that you can sand your floorboards, as well as a hire purchase
arrangement, which is often used when you buy a car for example.
Perhaps
we ought to just explain the relationship in hire purchase contracts as there
are actually three parties involved in this sort of contract. If you decide to
buy a car on hire purchase, the garage actually sells the car to the finance
company, who as the legal owner then agree to hire the car to you. You will have
an option to buy the car at the end of the agreement, but you will not become
the owner until the last payment has been made. Until you have made your last
payment, you will also need the permission of the finance company to sell the
vehicle. Any faults that occur will be the responsibility of both the finance
company and the garage, and you can refer your complaint to either of them.
Short
term hire agreements, such as our weekend sander, do not need to be in writing,
but most professional hire firms will only hire items to you under their terms
and conditions, which will be in a written contract. Once again you should read
the contract before you sign it. Check your responsibilities and liabilities.
The goods you are hiring belong to someone else, and therefore if you damage
them you may be liable to the hirer. Normal wear and tear is OK, but anything
beyond that and you may end up paying for the damage.
Longer
hire agreements, which must be for more than 3 agreed payments, must be in
writing, under the Consumer Credit Act. The agreement needs to be signed by both
parties and you should be given a copy. If you signed it at home then you may
have cancellation rights as you do with other forms of credit arrangement. Also
you cannot usually be made to sign up for a period which exceeds 18 months
without being given the chance to end the agreement by giving reasonable notice.
The
final area of consumer protection is actually contained in the Consumer
Protection Act, which actually relates to the physical protection of the
consumer from faulty or defective products. Whether you buy or hire goods they
have to be safe, and if you are injured by them in any way as a result of their
not being safe, then the manufacturer and the importer (if it has come from
outside the EU) are strictly liable for any damage or loss caused to you or
those that used the product. “Strict liability” means that you do not have
to prove that they were at fault. What you will have to prove is that the
product was defective, and that it was this defect that caused the injury, or in
tragic cases, even death. Therefore if you are injured when your car (whether it
is your own, hired or being bought on HP) crashes due to a defect in say the
steering system, then you could sue the manufacturer for your injury and
losses.
Enforcing Your Rights
It is all very well to say that someone has a legal right, either under
basic contract law, when someone fails to do what they say they are going to do,
or under consumer protection legislation, for example when a product is not of
satisfactory quality, but how do you go about enforcing those rights?
The first thing you need to do is to go back to the person that sold or hired
you the goods, or who carried out the poor work, and point out the problem to
them, and ask how they propose to resolve it. Be careful not to get fobbed off
with a solution that you do not want, when you may be entitled to a better one.
For example if the television you bought does not work after just one day, then
insist that it is replaced or that you get your money back, and do not allow the
shop to get away with sending it off to be repaired, or giving you a credit
voucher.
If they deny that they are
liable then your next step is probably to put your complaint in writing to them.
I would suggest that you make the letter as clear as possible giving details of
when and where you bought the item, how much it cost, when you first used it,
the defect that has come to light, when you tried to take it back to the shop,
and what you’d like them to do about it.
Make sure the letter goes to the right address and preferably to the most senior
person within the organisation eg the Managing Director. If it’s a chain of
shops then I’d suggest you write to their head office. Make sure you keep a
copy for your own records and I’d recommend that you send it recorded
delivery. Give them a specific date by which you want to see some action –
seven days from the date you are going to post it is usually enough.
If that still doesn’t do the
trick then you can send a follow-up letter, enclosing a copy of the first, and
indicating that if you do not hear from them within a further three days that
you will have no option but to take legal action through the courts.
And if they still fail to deal
with the matter that is what you will have to do. If your claim is for less than
£5,000, as most consumer complaints tend to be, then the matter will be dealt
with by your local county court. If its for less than £1,000 then it will be
dealt with by the Small Claims Court, where generally you will not be liable for
the other side’s costs, even if you lose the case, but the flip side is that
they will not be liable for yours either. This means that for claims for less
than £1,000 it is generally not worthwhile (financially) instructing a
solicitor. It will end up costing you more than your claim is worth.
But the County Court system is
used to people taking action for themselves and there are many leaflets
available to help you complete the forms that you need to complete to start a
court action, and then progress it through to a hearing and hopefully a
successful conclusion. You can even get the forms and guidance online at the
Court Service website, and if your claim is for money only, then you could give
the court’s own Money Claim Online system a whirl.
In a nutshell the procedure is
to complete a Claim Form; ask the Court to issue the proceedings and they then
serve the Claim on the defendant. He must then respond within a certain time. If
he doesn’t you can apply for judgment in your favour. If he does the case will
have a preliminary hearing where the District Judge will tell both sides what
else they need to do before the date that he sets for the case to be heard. If
it gets to a hearing then you will need to prepare your argument carefully and
have answers ready for any argument that the other side has to counter your
claim. You will need to produce your evidence of your contract with the
defendant and in what way they have breached the contract. Just work through
things slowly and logically and try not to get too nervous or agitated, no
matter what the other side may say.
Usually the District Judge
will make his decision at the end of the hearing, and if it is in your favour
then you will have a judgment against the other party, which hopefully they will
pay up without any problem. If they do not then there are various ways that you
can enforce the judgment.
You will need to be organised
and determined, but don’t be afraid to enforce your rights.
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