Consumer Contract Pitfalls

Hello. Welcome to this data webinar on consumer contract pitfalls. So we'll be looking at both. The drafting on the litigating with B two C contracts has been a lot of changes recently. Unless you can see the aims of Today in our 30 minute webinar get through all of that thinks will be doing really well is to understand the implementation of the Consumer Rights Directive through the Consumer Rights Act. Um Andi, also to think about direct consumer remedies against traders, for misleading on aggressive practices again to look at structural reform of consumer institutions, new A. D. Our rights and specialist regimes. But we're going to start with one the most important and quickest winds when it comes to looking at the changes to consumer rights, which is the mandatory requirement for cancellation notices. And that's the quickest and the easiest way to start, because if that consumer should have had a cancellation notice included in the contract and hasn't done, and it is possible to achieve a remedy, which is basically to avoid the contract or to start off a new cancellation period. So let's have a look at what we mean by this cancellation rights the cancellation regulations came in on the 13th of June 2014 a while ago. Now on, they refer in highlight form two off premises contracts. There's also some online issues as well. Andi. It puts a 14 day cooling off mandatory period from off premises contract to the from the time that you entered that contract to the end of the 14 day period in which the consumer may canceled. There are some exceptions on a notice of cancellation must be given by the consumer. But basically the contract becomes unenforceable. And you have been a 12 month period on another two weeks, 12 months in two weeks, all that notice to work so you could serve notice. Of course, I don't want an unenforceable contract. Here's my notice, you know, here it is. This is what you should have had. But then you have to wait for another year on two weeks. So it really does put the trader without a notice in a difficult position. There are also some minor changes to help line and inertia selling. So help lines have to be, uh, a normal number, which would be 123 number 08 numbers can be charged at national rate but often are were expensive to use. So again, on inertia selling there is other legislation dealing with inertia selling. But this is the this isn't more of that. Truly. Under the data protection, the GPR is probably a better, better moment. So does the or Do the cancellation regulations apply to allow contracts? While there are some contracts that are exempt? Not many and they're pretty rare. State agents, for example, are covered. Person exemption relates the contractor in the Bendel, Orlando or less saw on the bio tenant Lissi. And not to be associated services such as marketing betting, listing etcetera. So there's sort of a S T type contracts are out, but things around them in a builder. If it's a standalone new build or substantial conversion work, then again, the regulations may not necessary apply but extensions. Conservatives do not create new rights to property, but simply extended existing property. It doesn't at milk. Men are, except that's good to know, isn't it? There's also a day minimus threshold of around 40 quid. So what we really need to understand about BTC contracts is whether or not the sale took place on on premises now on premises is basically you. Go to the shop, you go to the place, the outlet Andi. They will be familiar or conceal with their own eyes the goods and services. So the level of information that is otherwise required by the regulations it's superfluous. And therefore buying a cup of coffee or groceries means that you don't need to worry too much about providing oodles of information in the shed. One is pretty well obvious from circumstances. The price that context were etcetera the address when I'm there on time. So I know where it starts to become more complicated and we have a different schedule of additional information. Is in distance contracts that some of you remember the old distance selling the Essar's. But they're now they're gone, being replaced by the cancellation regulations. The consumer has Beene defined as somebody who's acting wholly or outside trade. Mrs. Profession trader is the converse. So it's somebody who is acting with a trade, business, craft or profession, whether they're acting in the name on behalf. A distance contract is between a trader on a consumer under an organized distant sales or service provision, skin And the point is, I cannot see the whites of your eyes. You're not as a consumer in my simultaneous physical presence. So not we're not talking about sky. We're talking about literally standing that and so on On premises contract is not distance on not off premises. So basically on off premises contract is similar. Let me just show you what that one is on off premises contract is when I go to a trade for with my stool. It's not my premises, but you are standing in my simultaneous physical presence on once you're in my simultaneous physical premise. That presence. Then, although I can't see you even see me, we're not where we should pay. We're in a temporary situation. Temporary sales situation Ship could be business premises of distance communications immediately after consumer was individually addressed. Or it could be during excursion or a temporary business premises at a fair or show. But it's not quite on the premises. So where it's a distance or off premises contract than the information requirements are set out in Schedule two. So shed your one is for on premises and pretty much obvious, scheduled to its that everything else on, then not obvious on they must be provided. Andi as part of off premises or distance. The kicker is cancellation, right? So you need to have a cancellation, right? For those types of contracts. Now the online trader needs to make absolutely clear this is the other point where we're talking about not just a cancellation notice, but also the architectures selling through online if they need to make absolutely clear to a button called Pay Now, where there is an obligation to pay so I can see the way in which the contract is progressing. I know when it is that I'm actually pressing the pay now the confirmed payment, so that's on online operational requirement must be clear. So what exactly is this cancellation notice? Well, I'm pleased to say that it's a pro former. The directive, The capitation rights directive, has actually provided it, and it's reproduced in the cancellation regulations on it's a pro former notice that sets out what it should look like, and you just simply included in the contract. You don't have to use the pro former. You could do something similar, but you must give the consumer a sort of form to fill in or a formula of words to use so that they know how to cancel the contract and that's attached to the contract in some way. Equally, there is an issue about digital content. Now for a very interesting really to watch how this market has grown, of course, what'll downloading films and songs and audio books and say Fourth and I, um, hat smile because it reminded me of a cinema project in a community where by they put a sort of a community cinema together with different films go not same time. And these two lovely ladies came in and sat through diehard 16 or something, and then at the end of it is a Well, we watched the wrong film. Can we go and see the one that we wanted to go and see? Well, you wanted? Didn't you know after sort of a few minutes of Bruce Willis that it waas the film that you wanted to go and see that it waas a different film? No, no, we didn't realize till the very end. Well, yeah, okay, but then you've already seen it, so you know. Okay, you could go watch other film I guess, But it's not fair because you already downloaded it. Listen to it. So the problem with digital content, obviously and cancellation is that you could see why that's going to be a less than satisfactory situation for the trader, as people will be counseling and expecting their money back because cancellation involves reimbursement. So digital content in schedule one is music video downloads. They're dealt with separately for that reason, ANDI partly because there's another side to it, which is just not that will. You can't cancel because you're seeing it, but also because downloading viral or, you know, stop this got some subfloor false in it is going to have an impact upon the consumers equipment. So there's a little bit of sort of protection working there by clear information about the functionality of the device or the the online application, etcetera. So the functionality of the technical protection measures, all of that information should be in place on the compatibility because the point is, if you're going to Comptel my cancellation right and I just don't get, I can't use it. That's not fair either, so effectively, then we've got to have some digital contact compatibility information on bond. What could recently be expected for meat it to make me aware off before I press the button? Because once I press the button that the end of cancellation right, so as you can see their digital content is supplied within the cancellation period, this cussed consumer ceases to have the right to cancel under regulation 29 of the wrecks before the end of the cancellation period on the supply of digital content has begun after the consumer has given their consent. They had no cost for the supply of the digital content in the cancellation periods of 14 days, where the traders failed to provide all that information, or the consumer has not given express consent to losing their cancellation. Right, so you have to be pretty careful with those specific areas. Now let's get back to said, You're too for our distance and online selling off premises selling. There are the extra bits of information that you need in Schedule two on a lot of this is also about that moving this process forward to reimbursement, and you have to make some decisions about whether or not the consumer is going to buy special delivery or having to return the costs and who's going to pay for it? You can make consumers pay for attorney down to pay for the consumer to return the goods, but she must let you know. So judge or two is information about exercising the right to cancel Andi whether or not they can immediately withdraw. There are some exceptions there. 28 36 37. Some of those exceptions are in relation to services, and that's quite an important part because if you create a city starts service, it's very difficult to recover any return a service, So that's an exception. But you must notify once I start making you conservatory. If you agree, you can't cancel because in 14 days you'll have a new conservatory. Onda. We can't put it back. So for services, only the cup cancellation right could be curtailed. Provided that you said, once you start, you lose the right. Do you want me to start? Or do you want me to wait for 14 days before I start on your phone? So this scheduled three with the part B model cancellation form, and it's dealt with by regulations 10 and 13 of cancellation regulations. Notice that regulation 19. Not that we've had any prosecutions, that there is an offence not to include cancellation right where they are required as Amanda Tree, part Bar three cancellation rights. And I put in Regulation 29 just to say, Now this is how it works and these are the exceptions. And actually, Regulation 29 comes up quite a lot in litigation. Percival. Your cancellation rights are adapted so that the consumer has to pay where enhanced delivery has bean chosen. So if you want them to pay to return it send than 34 Gidget possibility. You don't have to pay where the goods have been diminished consumer handling. And that's where packaging has been diminished or the service actually has bean a problem on bond. The goods then, are not in the same condition. Very difficult to know how much money to knock off really has to be. A reasonable amount can be resold. Etcetera could technically be almost zero, you know, Eddie or something, but they would have to be pretty badly spoiled. Um, this is Regulation 35 where the goods were returned on how the consumer pays for their own expenses to return them on regulations. 36 is the acknowledgement that once you start the service, I lose the conversation right because it'll be over or I don't want to wait. If you don't provide them with that, then the period is extended to 14 days from the date that that information is provided. So if you have a provide that information like witness may better provide it, then they will then have 14 days to think about it, so it could really be too late. You need to get it in at the beginning. Now, when it comes to reimbursement and customer returns, it's not traders. Responsibility Consumer must send them back, hand them over, use specified address and bear the direct cost of returning the goods. Unless so, I mean you can provide for enhanced delivery. As we've been talking about that next day, premium delivery, where the cost of that is paid for by the consumer, is never returned. Onda also probably obliges the customer to use a pain way back as well to you. But there are some caveats to this trader. If the traces look, you know I'll send the ban for you we'll pick it up all they felt pride information as to how this, too, and throw returns and delivery takes place. I miss guilties anybody. If you're clicking through the January sales online, I don't stop to read three information about delivery and reimbursements and so forth. And I have to say that I have a few rounds with large organizations. Where it's not entirely clear is in there somewhere, but it's not quite clear or the delivery on reimbursement Regime varies between products, and it's not clearly marked how those regimes work. So if you go to come out of anything but you have 14 days can cancel that. It really does need to clearly set up out. So when you're setting out in Hunt's delivery, they need to know that they can get their money back. When you're setting out, you know, immediate start of services. They need to know that they have lost their cancellation rights. Okay, so badging things, really killing delivery has to be within the month. 30 days now again, I had a case involving a bespoke piece of furniture on. They were absolutely adamant. They just apply to us because it's bespoke quite say that. Actually, if it is bespoke and clearly first days is going to be enough for them to get it and do that, Then again, it needs to be breeding time, period. So unless you agree it, the contract is to be treated as including. So this an implied term that delivery Tex Mex within 30 days and stop just. But it's obvious that it's bespoke. No, that's not what it says. You must agree an extra time for delivery. So operation if your client can't achieve 30 days and again badge that up, flag it up before they click on purchase something that's going to take longer than other rights. Those of the consolation regulations, as I say, been in since 2014 pretty well familiar with him now on. Basically, they're going to stop you from being empty, force a payment clause or lead potentially to recovery litigation. It's quite difficult, I think, if you are a trader to deny those rights once the item has Bean acquired, sometimes it's just easier to give them their money back. Even if it's technically, this is subtitles there, which would allow him to hold on to it all. They've gone through 40 days. I think a lot of people I like to get people a longer contractual recovery or return period, but that's the mandate treat. 14 days cooling off. Otherwise, the 2012 surcharges regulations. Not an awful lot of information about this, but they're pretty pernicious. If you're acting for traders, you're not allowed to charge for credit cards and debit cards. If they are, they can only incur at a reasonable amount of money for a cost. But this Habs I've stopped in there but not so long ago and was about to get a taxi from a central desk using a credit card on bond. They told me that there was a 7% or 17 something. What is it? I said, Well, what about consumer? Because it was a within the UK. What about consumer rights? Payment surcharges? Regulations? 2012 looked at me and say, Oh, well, put your card in or not love. There's a cash point over there. Yeah, so no ridiculous amounts of costs fall. Using plastic is prohibited by these regulations, and it sets through how much you can charge. As you can see from the second bullet. It is no higher than the cost to the business. So you have to really justify that you have to be out to prove that it's cost the business that much money. Okay, so we've looked at consolation Rex. There's a surcharges, rakes and now Consumer Rights Act 2015. I'm a bit of a sort of piecemeal approach to this Consumer rights Renew, renewing on done updating on a normal 15 October 2015. Very importantly, it has updated on definitions. We need to know whether it's a good contract or a service contract or mixed contract. There's also some replacement to existing legislation, such as the same Goods Act and so forth on it deals with call quality warranty rights by using new basis to imply them into a contract. So let's start with goods most usefully goods. I think consumer rights is always easier for goods and services, and the point about Consumer rights Act 2015 is it allows for statutory remedies. Helpfully, they all begin within our so there are tears. Remedies. One of the tears of remedies is the right to reject. We've been talking about that with cancellation. It's not quite the same. Not you know, canceling the contract here. Who? Rejecting the goods and that happens within 30 days, off risk or ownership or delivery. If they accept the goods, then you're going to lose that. So you have 30 days on, sometimes a short period appropriate to make your mind up. Of course, this is not a contractual rejection period. This is a statutory rejection period, which requires a problem with the goods. Then we move on to repair or replacement or price reduction. Now that's a second tier remedy before we get to a final tier of ultimate rejection. So the trader has one opportunity to repair all the place before the final right to reject applies. So you sort of rather like the fountain chats with you. Go down through the stages of the first, the first right projection that passes quickly. Then you get repair or replacement reduction. That pass is still not good enough. Final right to reject, but you can't go to a final right to reject. Those are the 33 tiers Tier one, short term right to reject it to right to repair replacement T three right price reduction of final right to reject now again, as with the note cancellation notices, there are digital content rights on, and the digital content is all about making sure that sufficiently good quality on fit for purpose and, as describes a very similar really. But this is attacking the problem from a warranty perspective. So again, if you're selling that, you have to make sure that you call conformity is good and that the quality is there. A Zeiss, a digital content isn't spoke regime. It's a limited right to a refund because, as we were talking about cancellation, the payment from a trailer where the digital contact provided causes damage to a device or other digital content belonging to the consumer. The damage is of a kind which would not have occurred if the trader had exercised reasonable cat. So it sort of replaces cancellation by really upping the warranty of quality and giving that conformity right to damages. Look at the Consumer Rights Act, then, when it comes to services, it's slightly different to the updated rights are looking at practical remedies. I go a right to performance, so a specific performance right and secondly, using some old favorites, which is reasonable care and skill at a reasonable time period on a reasonable price. If this has not being already agreed. So Klaus, if you two gives contractual force to any representation zones taken into account in entering into the contract, so the services element top it in terms of remedies has just to tears, not three. First of all, specific performance. Just do it. And secondly, if that doesn't work, you can try a price reduction provided the performance can't be provided within a reasonable time, or the consumer that has that right to price reduction on this could include even the full amount of the price. Because services was so bad so three kiss but goods to tennis for services on also those digital content quality warranties, which, allowing for allow you to get damages where you had problems with the device. Finally under into a rights act. We have a talk radio now. The Unfair Contract Terms Act Dr 1977 has been hanging around in this place for a while. It was replaced by the Unfair Terms and Consumer Contract Regulations. 1999 Teoh take it up to be to see regime they That's Knapman doctors still there, but you don't need it for being to see on the 1999 Mexico what a 1999 regs did was introduced the bottom terms. And if you were on the grey list, you were forbidden. You were out, Lord. And so it brings to 22 term that the number of Grey List terms and in inappropriately excluding rights is my favorite. Because when you look at B two c exclusion clauses, you know that they're not gonna work. Very rarely will be to see exclusion clause work. It's surprising how many teas and sees I look out, which are destined to both b two c young b two B and contain the same exclusion doors. It's quite easy to manage that exclusion clause as being unreasonable in the context of a B to C situation, because it will probably be on the grey list. So the additional ones are hi charges which are disproportionate and also varying the basis of the contract terms conditions of the characteristics of the goods and services that you're going to provide so I can change it. But you can't approach to contracting. So what we've done then is we've got these tidied up rights. Now the unfair terms which are part of the on veterans and consumer contract regulations that UTC seals has been amended in the Consumer Rights Act on a term becomes unfair if it causes the significant imbalance in detriment of the consumer. So that's a nice big capture. So if you can't get them under specific list, you can get them under an unfair you can bounded up one around on hope that that works. So basically, the other thing I should say in that tidy up is that what were previously warranted become conditions. So fitness for purpose, satisfactory quality, compliance with district that allow parts and call quality performance indicators. They are all conditions, not warranties. Conditions of the contract contaminate, or you can get your damages or both. So it's really solidified what used to be the same goods at by including them as conditions and also giving you these extras as well in terms of a generalized category of on terms. Finally, we're going to think about unfair commercial practices Now. The consumer protection from Unfair Trading Regulations 2008 amended has now being amended to really use this piece of legislation much more usefully, and I had some litigation with strangers under this. These rates The big problem with these ranks is that they're operated by trading standards, so don't hold your breath. But they are quite useful because they create. We were talking about unfair terms. These unfair terms are no contractual. Has Consumer Rights Act their pre contractual? And so this is a sort of extension, misrepresentation and the sort of thing you have is shop early special off, closing down total liquidation. If you don't bite, you'll never Actually, what it does is build pressure on the consumer to make it a decision to enter into the contract when no such thing, it's the case, so they are unfair terms in terms of luring the consumer into the contract. Where is the unfair terms that we were previously talking about under the Consumer Rights Act Ball ones in the contract. Now those unfair terms could be generally unfair. Those aren't very helpful. Zittel term category of terms Much always useful, I would suggest, is the way in which the pre contractual cell has been misleading. So a number which says this is the best isn't true or this is a fabulous restaurant. Look at these really good reviews, but actually it's had Justus many bad reviews. You can't weed out the reviews. You're gonna see the bad as well as the good that all comes. I'll take you to the cash point. Put Yukos on, so that's aggressive. There's also a helpful, prohibited list, and if you do, nothing else is homework from this weapon are. Have a look at the consumer protection on trading regulations. Shed your It contains about 30 practices, but you're automatically a breach of statutory duty. They include things like pyramid selling bait, advertising certain adverts to Children. And I have been through this list with many organizations who we're talking about putting products online and watch the color drain from their faces. Because actually, a marketing executive would say, Oh, yes, I recognize that, Yes, I this is what we all we have that campaign you have gently say. Well, actually, these are forbidden. They are excluded practices. So you can't really that these this legislation is all about the cell, and so effectively you're setting up contracts for trader or you're trying to safeguard rights for consumer. You're looking at a period before the contract. Now what's happened since 2008 is that these air pretty popular and there is now a new right of direct action. So where's before? We have to go through trading standards where they just was saying Busy Now we can have a new direct right of action breach of statutory duty for damages. They are useful because they are pretty comprehensive. Most people breach them some to some X that happened with It was a fine promotion. They said. Well, we want to run a kind of end of stock and we want to run it next year as well. Well, either it's the end of the stock. You got recurrently have you know the same promotion eso it has seen its been quite successful to use that shill bidding is another example where people bid against himself on the baby, too. To get the price up. That's an unfair. That's a generally unfair commercial practices, something to get consuming to keep going to bid super okay, just a few words on structural reform that the Competition Markets Act has got new powers of entry on party to the enterprise at 2000 to this direct action, so they should find a good way of being able to obtain damages at least create enough eat light with trader on behalf of your consumer and finally, the alternative dispute resolution for consumer disputes. Competent authorities of emotion relationship. What mouthful means that you're supposed to make an alternative dispute resolution process so that the entity can the 80 are entity can take on despues and use. It is a way so that effectively, the consumer doesn't have to go into court. Even in small claims court, they can get suitable redress through an 80 are procedure. There are some ombudsman schemes. There are very few in that. Obviously, they're quite useful, too. If you've got time to wait to spend on them, Um, but they can help. So as well. Let's have a look at our key questions When acting in relation to B to C contracts. Firstly, check their status as a consumer. Secondly, identify the trader. Review the cell. That's the pre contractual consumer. Unfair trading practices identify the type of contract. Is it goods? Is it? Services have be appropriate cancellation rights, but off premises distance. Are there any unfair terms within the contract under the Consumer Rights Act, it said. Call conformity, but fitness for purpose, satisfactory quality, reasonable care and skill. Good warranty. But they go in these conditions. Water your relevant tears, a remedy to for services three for goods and don't get some basic contract interpretation as well is, is the contract not very clear about what they bought our? There's a general breach of contract or generally unclear provisions in that contract. You can also take issue with Well, thanks. I hope that's being some help is quite a checkered patchwork of legislation on B to C. My advice two traders, particularly if you've got somebody who has a bee in a bonnet about the goods or services, is, frankly, just to smile and wave and give them their money back. But my