Trading Standards Institute Advice

The sale and supply of goods

In the guide

This guidance is for England & Wales

On 1 October 2015 the Consumer Rights Act 2015 changed the rules relating to the supply of goods, services and digital content for contracts made from that date. A single set of rules now apply to all contracts where goods are supplied, including sale, hire, hire-purchase and work / materials contracts. New rules also apply to the supply of services and the Act sets out, for the first time, specific rules relating to digital content.

This is a guide to the rights and obligations that arise when a trader supplies goods to a consumer. It answers questions that are commonly raised by traders about their obligations towards the individual consumer.

What is a trader?

If you are a 'person' acting for purposes relating to your trade, business, craft or profession then you are a 'trader'.

A person can mean more than one individual - for example, if your business is a partnership of two or more people. A person can also be a company, a charity (or other not-for-profit organisation), a government department, a local authority or a public authority.

If you are a trader that allows another person to act in your name or on your behalf you would still be responsible for those contracts - for example, if you employ people to make contracts for selling cars to your customers or you sub-contract with someone else to supply labour when building a wall.

What is a consumer?

For the purposes of this guide, a 'consumer' is an individual who, in his dealings with a trader, is not acting for the purposes of a business. Where a consumer presents himself as a business (for example, by buying goods for personal use from a trade outlet on a trade account) the law does not consider him to be a consumer.

Also, an individual is considered to be a consumer only in some respects when buying second-hand goods at a public auction where individuals can attend in person.

If the trader claims that the buyer is not a consumer and that the buyer's rights are therefore limited, it is for the trader to prove this.

Formation of a contract

The contract

When a consumer buys goods from a trader, both parties enter into a contract. A contract may be defined as an agreement between two or more parties that is intended to be legally binding. In addition to terms agreed between the parties, the law sets certain standards for consumer contracts.

In order for a term to be binding it must clearly be part of the contract and be legal. Terms given to a consumer after the contract is made (for example, terms written only on the back of a receipt) are not part of the contract and they have no effect.

A contract does not have to be written down, but it is advisable to detail important terms in writing so there can be no dispute later on.

Failure to comply with the terms of the contract is referred to as a breach of contract and the person committing the breach normally has to correct it in some way.

How is the contract made?

The essential element in forming a contract is the agreement (consisting of an offer and acceptance). At least two parties are required (such as the trader and the consumer). One of them (the offeror) makes an offer, which the other (the offeree) accepts. An offer is an expression of willingness to contract made with the intention that it shall become binding on the offeror as soon as it is accepted by the offeree.

When a trader displays or advertises goods (for example, by displaying them on a shelf in a shop alongside a price ticket) it is usually giving consumers what is referred to as an 'invitation to treat'. The consumer can then make an offer to buy the goods. At this point the trader is under no obligation to accept the offer - a contract is made if and when the trader accepts.

Sometimes, the process works the other way round - that is, the trader makes an offer to the consumer and a contract is made when the consumer accepts the offer.

Under the contract, the consumer will agree to pay the trader a sum of money and/or do something else in return for the goods the trader supplies. This commitment is known as the 'consideration' in the contract. If there is no consideration (that is, if a trader offers to supply goods completely free of any charge or other obligation) there is no contract at all.

What happens when the consumer changes his mind?

Normally a consumer has no automatic right to change his mind and to cancel a contract; therefore if this happens he is in breach of contract. However, there is an automatic right to cancel in some special cases, including most consumer contracts made at a distance (for example, mail order or internet) or at a consumer's home etc. See 'Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013' below.

If a consumer cancels the contract wrongfully, the trader can claim the reasonable costs incurred. Where the trader cannot recover the lost sale (for example, by selling the item to someone else) they may be entitled to claim loss of profit too. If the consumer has made full or part payment up front, the trader can only retain enough to cover these losses and must refund the difference.

What the consumer can expect (statutory rights)

Under the Consumer Rights Act 2015, certain standards apply to every transaction for the sale and supply of goods (including hire purchase, hire, part exchange and contracts for work and materials).

The person transferring or selling the goods must have the right to do so and the goods must:

  • be of a satisfactory quality. Goods must be of a standard that a reasonable person would regard as satisfactory. Quality is a general term, which covers a number of matters including:
    - fitness for all the purposes for which goods of that kind are usually supplied
    - appearance and finish
    - freedom from minor defects
    - safety
    - durability
    In assessing quality, all relevant circumstances must be considered, including price, description and your or the manufacturer's advertising
  • be fit for a particular purpose. When a consumer indicates that goods are required for a particular purpose, or where it is obvious that goods are intended for a particular purpose and a trader supplies them to meet that requirement, the goods should be fit for that specified purpose
  • match the description, sample or model. When a consumer relies on a description, sample or display model the goods supplied must conform to it. If the goods do not conform, an offence may have been committed
  • be installed correctly, where installation has been agreed as part of the contract

Any digital content supplied with the goods must also be of satisfactory quality, fit for a particular purpose and as described - for more information see 'Digital content'.

Remedy for breach

The short-term right to reject

If, when they are supplied, the goods do not meet the requirements above, there is a short period during which the consumer is entitled to reject them. This short-term right to reject goods lasts for 30 days unless the expected life of the goods is shorter, as with highly perishable goods. The right does not apply in cases where the only breach relates to an incorrect installation of goods.

If the consumer asks for repair or replacement during this initial 30-day period, the period is paused so that the consumer has the remainder of the 30-day period, or seven days (whichever is longer) to check whether the repair or replacement has been successful and to decide whether to reject the goods.

When a consumer rejects goods he can claim a refund. This would be a full refund or, in the case of hire, a refund for any part of the hire that was paid for but not supplied. He is also released from all his outstanding obligations under the contract - for example, the outstanding instalments in a contract of hire purchase. A refund must be given without undue delay and in any event within 14 days of the trader agreeing that the consumer is entitled to a refund.

The trader is responsible for the reasonable cost of returning the goods except where the consumer is returning them to the place where he took possession of them - for example, the retail shop where he bought them. However, the consumer is not required to return the goods to this place unless this was agreed from the outset as part of the contract. Even if the consumer returns goods to the shop, he may in some circumstances be able to claim some or all of that cost from the trader - for example, where a motor vehicle breaks down and the consumer has to pay for a recovery service to return it.

Repair or replacement

When there is a breach of contract, but the consumer has lost or chooses not to exercise his right to reject goods, he will be entitled in the first instance to claim a repair or replacement.

Where a repair or replacement is claimed, the trader must do this at no cost to the consumer, within a reasonable time and without causing significant inconvenience.

The consumer cannot choose one of these remedies above the other if the chosen remedy is either impossible or disproportionate as compared to the other remedy. Also, once the consumer has chosen a remedy, he must give the trader a reasonable time to provide that remedy.

The remedies fail if, after just one attempt at repair or replacement, the goods still do not meet the necessary requirements. The consumer does not have to give the trader multiple opportunities to repair or replace, although he can do so if he wishes. The remedies also fail if they are not provided within a reasonable time and without causing significant inconvenience to the consumer.

In either case where repair or replacement fail, the consumer is entitled to further repairs or replacements or he can claim a price reduction or the right to reject. The same rule applies if both repair and replacement are impossible or disproportionate from the outset.

Price reduction & the final right to reject

If repair or replacement is not available or is unsuccessful, or is not provided within a reasonable time and without significant inconvenience to the consumer, then the consumer can claim a price reduction or reject the goods.

Where repair or replacement fail, are not available, or were not provided within a reasonable time and without causing significant inconvenience to the consumer, the consumer chooses whether to keep the goods or return them. If he keeps the goods, then his claim will be for a reduction in price; if he returns them, he is rejecting them.

A price reduction must be an appropriate amount, which will depend on all the circumstances of the claim. It can be any amount up to the whole price.

If the consumer rejects the goods, then he is entitled to a refund. This refund may be reduced to take account of any use the consumer has had from the goods. However, no deduction can be made for the consumer having the goods simply because the trader has delayed in collecting them. Nor can a deduction be made where goods are rejected within six months of supply, except where the goods are a motor vehicle.

Additional compensation

Whatever remedy the consumer chooses or ends up with, he may also be able to claim compensation for losses that have been incurred. These losses might include the cost of any property damage caused by the goods, compensation for personal injury and compensation for the additional cost of buying equivalent goods if they are more expensive elsewhere.

The burden of proof

If the consumer chooses repair, replacement, price reduction or the final right to reject, and if the defect is discovered within six months of delivery, it is assumed that the fault was there at the time of delivery unless the trader can prove otherwise or unless this assumption is inconsistent with the circumstances (for example, obvious signs of misuse).

If more than six months have passed, the consumer has to prove the defect was there at the time of delivery. He must also prove the defect was there at the time of delivery if he exercises the short-term right to reject goods. Some defects do not become apparent until some time after delivery, and in these cases it is enough to prove that there was an underlying or hidden defect at that time.

Exceptions - when the consumer cannot make a claim

A consumer cannot claim for defects that are brought to his attention before the sale or if the consumer examines the goods before purchase and any defects should have been obvious.

A consumer cannot claim for damage he causes or if he simply changes his mind about wanting the goods.

Neither can a consumer claim if he chose the product himself for a purpose that is neither obvious nor made known to the trader and he then finds that the item is simply unsuitable for that purpose. For example, if a consumer buys a hedge trimmer and breaks it attempting to cut down a tree with it, he cannot make a claim unless the trader told him it would be suitable for tree-felling.

A consumer has no rights to claim for faults that appear as a result of fair wear and tear.

Time limits for court action

Consumers can expect goods not to fail prematurely, even if the reasonable life expectancy of those goods is several years. However, there is a time limit that eventually prevents consumers from making a claim through the courts.

A consumer cannot normally bring a claim to court more than six years after the breach of contract (usually the date of delivery in a contract for the sale of goods).

This does not mean all goods have to last this length of time, but this is the time limit that the law gives a consumer to take legal action.

Unfair contract terms

The Consumer Rights Act 2015 covers the use of unfair terms in consumer contracts. For more information please see 'Unfair contract terms'.

In addition, any attempt to mislead the consumer about his rights is an offence under the Consumer Protection from Unfair Trading Regulations 2008. (These Regulations cover traders' duties towards consumers in general - see 'Consumer protection from unfair trading'.)

Other rules affecting consumer contracts

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

These Regulations provide consumers with a 14-day cooling-off period for most 'distance contracts' (those made via the internet etc) and 'off-premises contracts' (those made, for example, in a consumer's home). They also require certain information to be given to consumers, both for off-premises contracts and where consumers make an agreement on a trader's business premises. Traders cannot make hidden charges, and additional charges can only be made with the consumer's express agreement.

For more information see:

  • 'Consumer contracts - distance sales'
  • 'Consumer contracts - off-premises sales'
  • 'Consumer contracts - on-premises sales'

Loss or damage in transit

If the trader arranges for goods to be delivered to a consumer, the goods remain at the trader's risk until delivery. Therefore it is the trader's responsibility to ensure that goods are not lost or damaged in transit and/or to take out appropriate insurance.

Misrepresentation

A misrepresentation is a false statement of fact made by a person or their agent that induces someone else to make a contract with them.

Dependent upon whether the misrepresentation was made fraudulently, negligently or innocently, the party who has relied on the misrepresentation will be entitled to a remedy that may include rescission (which means unwinding or cancelling the contract), refund and/or compensation.

Consumer Protection from Unfair Trading Regulations 2008

Since 1 October 2014, these Regulations have provided an additional and alternative right of redress for consumers. Where a trader has used misleading or aggressive selling practices, the consumer may be entitled to claim compensation and/or a reduction in price or to cancel the contract completely.

The Department for Business, Energy and Industrial Strategy (BEIS, which was known as the Department for Business, Innovation and Skills at the time) has produced guidance on consumers' right to redress under the Regulations: Misleading and aggressive commercial practices - New private rights for consumers (opens in a new window).

Consumer Protection Act 1987 (Part 1)

This legislation allows a person to claim compensation if he is injured by a defective product. Depending on the circumstances a claim might be made against anyone in the supply chain from manufacturer / importer to retailer.

Compensation can also be claimed under this Act for damage to personal property (but not damage to business property).

For more information, see 'Unsafe goods - liability'.

Contracts (Rights of Third Parties) Act 1999

This law gives rights to anyone who was intended to benefit from the transaction. For example, if someone buys a gift for a friend and the gift proves to be faulty, either the recipient or the buyer of the gift can take action for breach of contract (as long as it was made clear that the goods were to be given as a gift). Traders can use contract terms to exclude the rights of third parties, but in practice it will often be simpler (and provide a better customer experience) for the trader to deal directly with the recipient of a gift.

The trader's identity

The consumer needs to know, or be able to find out, who he is dealing with. A trader's identity and address must be displayed at their place of business, on key business documents and on websites. This information must also be made available to consumers before a contract is made and whenever a consumer requests it. See 'Company & business names' for more information.

If a trader fails to disclose that they are a limited company and there is then a breach of contract, the consumer may be able to claim against the directors of the business as individuals. If a trader fails to disclose that they are acting as an agent for someone else, then the consumer may be able to make any claim directly against that trader.

Common questions

Q. A consumer doesn't produce a receipt; does the trader have to do anything even if the goods are faulty?
A. There is no legal requirement for the consumer to provide or produce a receipt. If the trader does not remember the consumer buying the item they can ask the consumer to provide proof of purchase. This can be a credit card voucher or cheque stub or anything that indicates when and where the item was bought.

Q. The manufacturer offers a guarantee; can the trader refer the consumer straight to that manufacturer?
A. The consumer's statutory rights are with the trader that sold the goods to him and the guarantee offered by the manufacturer is in addition to such rights. A consumer can choose whether to pursue the trader or the manufacturer and neither may refuse the consumer his rights and direct him to the other. However, the trader in turn may have rights against their supplier.

Q. If a trader sells sale goods or seconds, surely the consumer doesn't have the same rights against the trader as he would if new or perfect goods had been purchased?
A. The same rights apply whether the goods are in the sale or sold as seconds. However, when assessing the level of quality that is satisfactory, considerations such as price, age and easily identifiable defects would be taken into account.

Q. Someone asks a trader for a quotation; how is this different to an estimate?
A. A quotation is normally a fixed price whilst an estimate is generally a rough guess of what the goods would cost.

Q. Can a trader put a notice in their shop stating that refunds are not given in any circumstances?
A. It is illegal to try to exclude a consumer's statutory rights, so a 'no refunds' notice is not permitted. A trader may wish to go beyond what the law requires and offer an exchange or refund policy for consumers who change their mind. A trader can display a notice giving details of such a policy, but it is recommended that the trader seeks advice on the wording of the notice from their local trading standards service. See 'Returns policies'.

Q. A consumer rings a trader to say that the TV he bought in that trader's shop during the previous week is defective and he demands that the trader collects it from him. Can the trader insist that he returns it?
A. A consumer contract can require the consumer to return rejected goods. The trader has to bear the reasonable cost of return other than the consumer's costs of returning to the place where he took delivery. So, if the consumer collected the TV from the shop and the contract says he has to bring it back if he rejects it, the trader can insist that he returns it. If the contract says nothing about returning goods, then he need only make it available for the trader to collect (but if he chooses to take it back himself, he cannot claim the cost back from the trader).

Q. A trader gives a consumer a credit note but he cannot find anything he wants? Does the trader have to then offer a refund and for how long should the credit note run? Can a trader offer a credit note instead of a refund?
A. In the first instance, if a consumer returns goods that do not conform with the contract, the trader cannot require the consumer to accept a credit note. The consumer can insist on a refund by the initial method of payment or as cash (or its equivalent). Similarly, if the trader has a goodwill returns policy that promises a refund if the consumer changes his mind, the consumer can expect the trader to honour this promise. If a consumer has been misled or pressured into accepting a credit note when he does not have to do so, he can still require the trader to replace it with cash or the original method of payment. In contrast, where the consumer has no legal right to a refund or makes an informed choice not to exercise this right, the trader can offer a credit note. The trader can then determine an expiry date if they inform the consumer of this time period at the time of issue.

Q. A consumer insists on a replacement but the item is no longer manufactured and there are none in stock.
A. A trader can offer the consumer a repair, a reduction in the price or allow the consumer to reject the goods. A repair will only be acceptable if this does not cause the consumer significant inconvenience.

Q. A trader cannot ascertain whether an item is faulty or whether it has failed due to misuse. What should they do?
A. If a consumer wishes to exercise the short-term right to reject the goods, it is for him to prove that the fault is not due to misuse. If a consumer claims a repair or replacement (or, if these fail, a price reduction or rejection) within six months of delivery, it is for the trader to prove misuse. After six months, the onus falls back on to the consumer. In any case, if the trader cannot agree on the cause of the fault, the trader may wish to obtain a second opinion - for example, from the manufacturer or an independent expert. Where an independent expert is to be used the consumer and trader should ideally both agree to this in writing.

Q. A consumer states a specific date for delivery of goods and the trader fails to deliver them on time; does the consumer have the right to cancel the contract?
A. Yes; if the consumer has made it clear that delivery within the agreed time was essential, or if this is clear from the circumstances of the contract (for example, flowers ordered for a wedding) and the trader has failed to comply, the consumer can treat this as breach of contract and cancel the contract.

Selling goods together with services and/or digital content - mixed contracts

In many cases, an agreement between a consumer and a trader won't be for just goods but may also contain services and/or digital content. The Consumer Rights Act sets out how the different elements work together. Please see 'Mixed contracts' for more information.

Consumer rights summary

To help businesses and consumers understand the changes, BEIS worked closely with business and consumer groups to develop a plain English summary of the key elements of the Act. This 'consumer rights summary' is not intended to be a comprehensive guide to consumer rights, but rather a general overview of the key consumer rights, focusing on the most common issues.

There is no legal requirement for you to display this information, but it could help you make things clearer for your customers and staff. The design of the information sheet is a basic layout and you may want to tailor it according to your business needs - for example, by offering a returns policy that builds on the statutory requirements, or adding examples from your own business (perhaps replacing the word 'goods' with something that you sell). The words are legally correct and outline your customers' rights, so we suggest tailoring and adding to these words, rather than deleting or altering the wording provided.

The summary is attached below in both PDF and Word formats, the latter to enable you to create your own version more easily:
Consumer rights summary - goods (PDF)
Consumer rights summary - goods (Word)

Penalties

The Enterprise Act 2002 creates the ability for enforcement bodies such as trading standards services to seek a court order preventing the failure to comply with the civil and criminal provisions of various pieces of consumer protection legislation, including the Consumer Rights Act 2015. Failure to comply with such a court order can lead to a maximum penalty of a fine and two years' imprisonment.

Further reading

BEIS has produced more detailed guidance to help businesses understand the implications of the Act: Consumer Rights Act: Goods guidance for business.

Supplying services

If your business also supplies services please see 'The supply of services'.

Digital content

The Consumer Rights Act 2015 also covers, for the first time, contracts between a trader and consumer in relation to digital content, as distinct from goods and services. Please see 'Digital content' for more information.

Contracts made before 1 October 2015

For contracts made before 1 October 2015, different legislation and different rules may apply. In most cases, there will be little difference in the practical steps required by both consumer and trader in resolving a complaint, but in some cases the differences may be significant. For example, there may be some cases where a consumer has the right to reject goods under an older contract even where they would not have the same right under a newer contract.

For more information please see 'The sale & supply of goods - before 1 October 2015' and 'The supply of services / goods with services - before 1 October 2015'.

Key legislation

Last reviewed / updated: October 2016

PixelPlease note

This information is intended for guidance; only the courts can give an authoritative interpretation of the law.

The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on amendments to UK legislation can be found on each link's 'More Resources' tab; amendments to EU legislation are usually incorporated into the text.

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