Duties and Obligations of a Trader

As a trader you are bound by various different pieces of legislation when dealing with consumers. It is important that you are aware of your duties and obligations under this legislation as failure to do so could result in court claims and media interest that could ruin your reputation.

Three of the main pieces of legislation that protect consumers are:

Frequently asked questions about this legislation 

The Consumer Rights Act (2015) harmonises the rules regarding the supply of goods, services and digital content, when the contract is business-to-consumer (B2C). It aims to protect consumers against poor-quality products and unfair business practices or contract terms with regards to transactions, repairs, refunds and delivery. A consumer is defined as 'an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession'. 

Another piece of legislation that protects consumer rights is the Consumer Protection Act 1987, which ensures that manufacturers meet safety standards. Consumers can claim compensation if a product is defective and caused personal injury or damage to property as a result.

No. The Sale of Goods Act 1979 (as amended) still sets the rules for business-to-business (B2B) contracts.

This legislation only protects the consumer when they are dealing with a Trader, defined as 'a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf'. It outlines what rights a consumer has and what your obligations are as a goods or services provider in the event of a dispute.  It does not cover private sales between two individuals where the seller/service provider is not a trader.

The terms of the Consumer Rights Act cover a series of major areas. Your business must conform to certain standards or conditions.

Title

A seller must have a ‘good title’, meaning you must have the right to sell the product. Items under a hire purchase can’t usually be defined as such,  as the finance company is technically the owner.

Description

The description you provide for every item you sell must be accurate, whether in-store or on your website. From colour and dimensions to the features they have, this needs to be correct to avoid misleading consumers.

Quality

Goods which are sold must be of a satisfactory quality. They must work properly and be undamaged. This requirement includes a range of criteria that products are assessed against to be classed as having satisfactory quality. These are:

  • Durability
  • Suitable for the intended purposes
  • Free from minor defects
  • Safe
  • Fit  for purpose

The goods should be fit for the purpose they are supplied for, If the consumer explains exactly what a purchase is for, the item provided should be reasonably fit for that specific purpose. For example, a customer might want to buy a drill capable of drilling into brick. Not all drills can do this, but by stating this is what they need the drill for, they should be recommended and sold something capable of accomplishing that task.

Standards for services

There are also certain standards that apply if you supply a service.

You must carry out the service with reasonable skill and care, or as agreed. You are bound by the information you give to the consumer (verbally or in writing), this includes quotations and any promises about timescales or results. If you didn’t agree a price or a time for completion, the service must be provided at a reasonable price and completed within a reasonable timeframe.

Delivery

Business to consumer contracts, under the act, typically include a requirement that the trader must deliver the goods to the consumer within 30 days, unless agreed otherwise. The goods are the trader's responsibility until they are with the buyer. Failure to stick to the rules means that a consumer may cancel the order and request a full refund.

‘Remedies’ is the term used to cover the options open to the consumer when there are issues with the goods and/or service and, breaching of the implied terms under the Consumer Rights Act. In business-to-consumer situations this usually means that the consumer can:

  • reject an item and claim a refund
  • claim a repair or replacement for faulty goods
  • claim either a partial or full refund instead, if the goods are out of stock

Available remedies vary depending on timeframe:

  1. In the initial 30 days after receipt of the goods the consumer has a 'short-term' right to reject the goods if they are faulty.  This means that they can, if they wish, request their money back in full.
  2. Once this 30 days has expired, the consumers' remedy changes and, generally speaking, they can only request a repair or replacement of the faulty goods.  The repair/replacement must be provided within a reasonable time and at no cost to the consumer.  The trader can refuse one of these remedies if it is disproportionately expensive compared to the other. 
  3. If goods are still faulty after at least one attempt at repair or replacement, the consumer has a ‘final right to reject’; meaning they are again entitled to ask for their money back. In these circumstances, the amount refunded can be reduced to take account of any use the consumer has had from the goods.

These apply to contracts made both on and away from business premises, as well as contracts made 'at a distance'; there are also rules for businesses providing digital content. These Regulations affect most businesses that contract with consumers, irrespective of where and how the contract is entered into. They do not apply to contracts where traders buy goods or services from consumers, nor do they apply to contracts between consumers

The Regulations require detailed information to be given to consumers and, in certain circumstances, give them a 14 day cancellation period. In addition, the regulations prohibit the use of premium-rate telephone helplines (for customers contacting a business in connection with a contract that they have with them). In addition, the Regulations prohibit the use of so-called negative options (for example pre-ticked boxes) to sell additional products to consumers that are incidental to the main contract.

The Consumer Protection from Unfair Trading Regulations control unfair practices by traders. The regulations prohibit 31 specific practices, that are always considered to be unfair, and create further offences for aggressive practices. They prohibit 'misleading actions' and 'misleading omissions' that cause, or are likely to cause, the average consumer to take a 'transactional decision' they would not have taken otherwise. They apply to commercial practices relating to products (which include goods, services and digital content) before, during and after a contract is made. These regulations set out criminal offences for traders that breach them.

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