Business's Obligations under Consumer Law

As a trader you will have liability arising out of the breach of a term in a contract which you enter into with a consumer even if that term wasn’t specifically stated in it. Confused? Read on…

This article outlines your obligations under the Consumer Rights Act 2015 and what legal entitlements your customers may have if things go wrong.

Certain requirements are ‘implied’ in every contract entered into between a business and consumer after 1 October 2015 (other provisions remain in place for contracts before this date) and you will need to be aware of them and ensure that you comply with them when entering into contracts with your customers.

What is an Implied Term?

Certain terms are implied in contracts whether they are expressly set out or not. For example, services must be carried out with reasonable care and skill.

What is an Express Term?

Express terms would typically include price, details of the geographical relocation, timeframes etc. In other words, the information that you agree specifically with your customer to meet their particular requirements.

Also, any information, whether, it is discussed or written will be binding on a business if the consumer relies on it. This means that any information you give to a customer should be clear, accurate and given on the understanding that the consumer can rely on it.

For example, this could include any information you give to your customers about the size of a vehicle that may be required to move their belongings and the price differentials that apply, additional charges, such as customs tariffs, and any other guidance you provide about the service.

It is crucial, therefore, that the information provided in your quotation is accurate, as it is binding when accepted by the consumer, and is a reflection of the work you are agreeing to undertake.

Are you the contracting party?

A consumer’s contract will be with the business and not with any sub-contractor. The person paid generally is the person who forms the contract with the consumer.

The business will be responsible under the contract to perform any remedies arising out of breach of contract even if this because of a sub contractor’s fault.

Example:

You form a contract for a customer’s relocation from England to the USA, reliant on a local removal firm in the USA with whom you have a sub-contract. Your customer does not have any documentation from the sub-contracted removal firm and does not pay any monies to them directly. You would therefore retain responsibility for any issues that arises with the performance of that part of the contract.

What is the consumer entitled to?

A consumer is entitled to a remedy where there has been a breach of an express or implied term of a contract whether this is written or verbally agreed.

Where services are being supplied, the most appropriate remedy will usually be repeat performance or, where this cannot be carried out in timely manner and without significant inconvenience to a consumer, a price reduction (which could be up to 100%). It may be, therefore, in the event of an issue with the performance of one part of the service a reduction in price is the best practical resolution. It will in the context of a removal contract often not be possible or appropriate to carry out a repeat performance.

Practical Steps

Making sure both parties know their rights and responsibilities is crucial to ensuring the smooth running of any project. Be particularly careful to explain these clearly to vulnerable consumers. Whether you are the contracting business or sub-contractor, knowing your obligations is vital. Ensuring this is documented and any variations agreed in writing will assist you in managing any claims which may arise in the future.

By making sure you are aware of your obligations and the consumer’s entitlement if anything goes wrong, you will be better able to manage any disputes and demonstrate your commitment to fair dealing with your customers.