Consumer Sale of Goods
Purpose of the 2022 Act
The purpose of this Consumer Rights Act 2022 is to consolidate and update the legislative provisions that regulate the main types of consumer contract. It also gives effect to Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services, Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods, and to the main provisions of Directive (EU) 2019/2161 on the better enforcement and modernisation of Union consumer protection rules.
Sales contracts
A sales contract is one where the trader transfers or undertakes to transfer ownership of goods to a consumer and the consumer pays or undertakes to pay the price of the goods or transfers or undertakes to transfer ownership of the goods to the trader in payment of the price. Paying a price by the consumer includes using by way of payment any facility by which payment has been made.
A sales contract may be a transaction where the ownership of the goods is transferred from the trader to the consumer or will be transferred at a future time or subject to such a condition. An agreement to sell becomes a sale when time elapses or the condition is met for transfer of the ownership of the goods.
A sales contract may be absolute or conditional. It is conditional if the trader retains ownership of the goods until the conditions are met. It is non-conditional if it is a hire-purchase agreement. In this section, ‘hire- purchase agreement’ has the same meaning as it has in the Consumer Credit Act 1995.
The Minister may make regulations to apply the legilsation to contracts for the sale of goods with digital elements where the consumer provides, or undertakes to provide, personal data instead of paying the price to the trader. Provision of personal data in this case is separate to where personal data is processed by the trader for the purpose of supplying the goods with digital elements or complying with necessary legal requirements.
The Minister may make regulations, having consulted as appropriate, where the specified contracts are on a significant scale and their regulation is in the interest of consumer protection and fair competition. The regulations may provide for the application of the legislation, as provided for in the regulations, to be subject to modifications as specified.
Right to terminate sales contract where no right to sell
Where a sales contract is concluded between a trader and consumer, the trader must ensure that he has the right to sell the goods when ownership of the goods is to be transferred under the contract. If the trader does not have this right, the consumer can terminate the contract. In this case, the consumer will exercise the right to terminate the contract and the trader will comply with the obligations. In case of dispute, the burden of proof is on the trader to show he has the right to sell the goods.
Goods to be in conformity with sales contract
Where a sales contract is concluded between a trader and a consumer, the trader must deliver goods that are in conformity with the contract at the relevant time. To be in conformity, goods must comply with the below requirements, where applicable. Otherwise, the remedies specified in are available to the consumer. “Relevant time” is defined.
Goods to be free from encumbrance
The trader must ensure that the goods must be free from any charge not disclosed to the consumer before entering into the contract and must remain so until ownership is transferred, and the consumer may only be affected by any person entitled to a benefit already disclosed. Where only limited title to the goods transfer, that the trader or person other than the trader may have, all charges must be disclosed before the contract is entered into and the consumer may only be affected by a claim under a charge already disclosed.
The consumer has the right to remedies where the goods are not in compliance, where all known charges are not disclosed by the trader and where a restriction prevents or limits the use of the goods. Where a dispute arises, the burden of proof rests on the trader to show that, the goods were in compliance with the contract, all known charges were disclosed, and the consumer had the right to possess the goods.
Subjective requirements for conformity
The goods delivered under a sales contract will be of such quantity, quality, functionality, interoperability; fit for the agreed purpose; installed and updated as specified in the sales contract. Information which the trader must provide to the consumer in a distance or off-premises contract forms part of the sale contract and the goods must comply with such terms also.
The trader must provide spare parts and an adequate after-sale service, as stated in an offer, description or advertisement related to the goods on behalf of the producer or the trader’s own behalf, for a stated or reasonable period of time.
Objective requirements for conformity with sales contract
The goods delivered under a sales contract must comply with applicable laws, standards, or codes of conduct; correspond to any description of a sample or model made available to the consumer; delivered with instructions, where applicable. They must possess the features of durability, compatibility and security expected of the goods, particularly features referred to in any public statement. The reference to the durability of the goods means the ability of the goods to maintain their functions and performance through normal use and which the consumer could reasonably expect.
The trader is not bound by any public statement on the durability of the goods where he shows that he was not aware of it, or it had been corrected or the consumer could not have been influenced by it. Where a sales contract for the sale of goods with digital elements provides for a single act of supply of digital content or digital services, the trader must ensure that the consumer is informed of and supplied with the updates necessary to keep the goods in conformity with the contract for a reasonable time period.
Where such a contract provides for a continuous supply of digital content or digital service for a period exceeding two years, the trader must ensure that the consumer is informed of and supplied with any updates (including a security update) necessary to keep the goods in conformity during that period. If the time period of supply does not exceed two years, the trader must ensure that the consumer is informed of and supplied with any updates (including a security update) necessary to keep the goods in conformity for two years beginning with the relevant time.
The trader is not liable for any lack of conformity where the consumer fails to install updates supplied within a reasonable time and had been informed of the updates. There will be no lack of conformity with the sales contract under this section where the consumer was informed of and accepted a deviation from particular requirements when concluding the sales contract. In case of dispute, the burden of proof rests on the trader to show the consumer was informed of and accepted the deviation.
Incorrect installation of goods
An incorrect installation of the goods will result in a lack of conformity of the goods with the sales contract where the installation forms part of the contract and was carried out under the trader’s responsibility or the incorrect installation was due to shortcomings in the installation instructions provided by the trader.
The above requirements are implied in every sales contract and will have effect as if they were terms of such a contract.
Liability of trader under sales contract
The trader is e liable to the consumer for a lack of conformity of the goods with the sales contract that exists at the relevant time. If the contract provides for delivery of goods on more than one occasion, liability of the trader applies on any of those occasions.
If the contract is for goods with digital elements for a continuous supply of digital content or digital service for a specified period, liability applies for a lack of conformity of the digital content or digital service during that period. Where updates are supplied by the trader or any other person supplying the digital content or digital service, liability of the trader applies for lack of conformity caused by an update which exists at the time of supply or installation or caused by a failure to supply an update when it should have been supplied.
The consumer’s right to a remedy for lack of conformity with the sales contract where the trader is liable applies for 6 years from (i) the relevant time for goods other than goods with digital elements and (ii) the time the lack of conformity of the digital content or digital service occurs or becomes apparent during the period they are supplied under the sales contract for goods with digital elements.
Burden of proof
A lack of conformity with the contract during the period of 12 months beginning with the relevant time that goods were supplied is presumed to have existed at the relevant time unless proven otherwise or such presumption is unreasonable. For goods with digital elements where the contract provides for continuous supply of those elements for a specified period, the burden of proof is on the trader for a lack of conformity that becomes apparent during that period.
The consumer only needs to prove that the goods are not in conformity and that this became apparent during the period of 12 months beginning with the relevant time. A consumer is not restricted from seeking a remedy after the expiry of the period of 12 months beginning with the relevant time.