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If your products or services are aimed at consumers, your position as a supplier is impacted by a wide variety of consumer protection legislation. This legislation provides consumers with important protection in relation to quality and price, as well as hidden terms or terms that absolve businesses of the implications of non-performance.
While in business-to-business (B2B) arrangements it is normal practice to try and limit your liability, in business-to-consumer (B2C) arrangements, your ability to limit liability for defective products or poor service is greatly reduced. This is because terms that deprive a consumer of their statutory rights are often ineffective.
Equally, where contracts are entered into remotely or off trade premises, consumers have additional rights, including cancellation rights.
How JMW Can Help
Our team works closely with businesses to understand the ways in which they work, and the products or services offered. We help businesses understand their obligations in relation to consumers and structure their processes and policies to protect their interests, without infringing on consumer protection legislation.
We regularly advise businesses in relation to a number of B2C arrangements, including:
- Terms and conditions of sale
- Rights in relation to distance or off-premises sales
- Promotions and prize draws
Protecting Your Business
To ensure that your consumer contracts are not likely to be challenged in an unfair contract term dispute, it is vital that you ensure contracts are well-drafted, clear and legally compliant. Problems tend to arise around the terms related to cancellation charges and a business’s ability to change the terms of a contract once they have been agreed.
Contracts should be created that include:
- Precise, simple and jargon-free terms
- Reasonable obligations for the consumer, including costs, time limits and procedures
- No hidden fees or charges
Particular care should also be taken to ensure that any terms and conditions that could go against consumers, such as cancellation fees and limiting your liability, are handled correctly.
Our solicitors understand what needs to be considered when creating consumer contracts to ensure terms are enforceable, and can provide tailored advice and support to meet your business requirements.
What are consumer contract regulations?
Consumers are protected against unfair terms in a contract under the Consumer Rights Act 2015, which consolidated three pieces of legislation into one: the Sale of Goods Act 1979, the Unfair Terms in Consumer Contract Regulations 1999, and the Supply of Goods and Services Act 1982.
The act outlines that consumers will not be bound by standard terms in a contract made with a business if they are deemed unfair. This is likely to happen if the terms in a contract are not clear, prominent or transparent.
What happens if a consumer believes a term in the contract is unfair?
If a consumer believes a contract term is unfair, they can raise a court complaint or complain to trading standards. We aim to avoid court proceedings from taking place, as this can be a costly and lengthy process that can cause harm to your business.
Who enforces consumer contract regulations?
Consumer protection is mainly enforced by the courts and trading standards but the Competition and Markets Authority (CMA) has the power to look at specific sectors. The regulatory body has consumer protection powers to address market-wide consumer problems and has the ability to conduct an investigation.
Are there any claims that can be brought against a consumer?
Claims can be made against a consumer that cancels their contract if:
- Work has started
- There has been any profit loss
- There are administration and marketing costs
You are unlikely to be able to bring a claim for anything else, as additional charges may be deemed unfair.