Updates for On-Premises Consumer Contracts

August 2014

Whilst the primary focus of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 is on contracts formed either via distance selling methods (e-commerce and telesales, for example) or on an “off-premises” basis (doorstep sales being a common instance), traders are also obligated to provide certain information to customers where contracts are formed “on-premises”.

Depending upon the nature of the goods or services being sold, certain information must be given or made available to the customer before a contract is formed provided that the information is not already apparent from the context of the transaction. As to what would be considered apparent from the context, we would suggest that in many cases information such as the ‘main characteristics of the goods’ or the ‘total price of the goods’ would be so apparent. Nevertheless, it is important that traders are diligent in ensuring that all customers are in possession of all the required facts before entering into a contract.

It is also important to note that the pre-contract information requirements do not apply to so-called “day-to-day” transactions wherein a contract is performed and entered into immediately. Traders selling goods over the counter, for example, do not need to start holding up customers by requiring them to read terms and conditions before handing over the cash!

The information required by the Regulations is as follows:

  • Main characteristics of the goods or services, to the extent appropriate to the medium of communication and to the goods or services.
  • The identity of the trader (for example, their trading name), the geographical address at which they are established and their telephone number.
  • The total price for the goods or services including taxes, or where the nature of the goods or services is such that the price cannot reasonably be calculated in advance, the manner in which it is to be calculated.
  • Where applicable, all additional delivery charges or, where those charges cannot reasonably be calculated in advance, the fact that such charges may be payable.
  • Where applicable, the arrangements for payment, delivery, performance, and the time by which the trader undertakes to deliver the goods or to perform the service.
  • Where applicable, the trader’s complaints handling policy.
  • In the case of a sales contract, a reminder that the trader is under a legal duty to supply goods that are in conformity with the contract.
  • Where applicable, the existence and conditions of after-sales services and commercial guarantees.
  • The duration of the contract, where applicable, or, if the contract is of indeterminate duration or is to be extended automatically, the conditions for terminating the contract.
  • Where applicable, the functionality, including appropriate technical protection measures, of digital content.
  • Where applicable, any relevant compatibility of digital content with hardware and software that the trader is aware of or can reasonably be expected to have been aware of.

In many cases, we have no doubt that most traders will already be providing such information as a matter of course. News that new legal requirements are in force may be both disconcerting and jarring, however in this instance we would suggest that traders dealing with on-premises contracts will likely have no cause for concern.

Delivery and Risk in Sale of Goods Contracts

In addition to setting out pre-contract information requirements for on-premises contracts, the Regulations also clarify the position of traders and consumers with respect to delivery and the passing of risk in sale of goods contracts.

Unless agreed otherwise, the Regulations imply a term into all contracts for the sale of goods that the trader will deliver the goods to the consumer. Unless a delivery time is expressly agreed, the trader must deliver the goods without undue delay and, in any case, not more than 30 days after the contract is formed. If of course the transaction is such that the goods are handed over immediately upon payment, that counts as an “agreed time”.

What’s more, the Regulations set out options for customers in the event that a trader has failed to deliver the goods on time (or worse, has refused to do so). Customers may agree to a new delivery time or may opt to treat the contract as being at an end.

As to the passing of risk, the Regulations emphasise that the risk in the goods remains with the trader until they come into the customer’s physical possession (or that of someone identified by the customer). Alternatively, if the customer wishes to use a delivery service of their choosing, risk will pass to the customer when the goods are passed to that delivery service.

Updated Goods and Services Templates

A number of our terms and conditions and agreement templates for goods and services have received updates in light of the Consumer Contracts Regulations. Whilst in most cases the added provisions are not essential – in particular those relating to pre-contract information as the importance lies in providing the information, not telling customers you will provide it – they are designed to provide greater clarity and leave both parties to the transaction better informed about their respective rights and obligations.

Given the differences between the requirements imposed on traders dealing with distance sales or off-premises contracts and those dealing with on-premises contracts it is important to be aware that the updates bestowed upon these documents do not make them suitable for use in distance or off-premises situations. Of particular importance in distance and off-premises contracts is the right to cancel – often known as the “cooling-off period” – which does not apply in on-premises transactions. Please ensure that you choose your templates carefully based upon your method of contracting.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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