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As an expert for disputes within the communications sector, I am asked frequently about a consumer’s rights in respect to faulty mobile phone handsets, but also asked by businesses about their rights in the same regard. Today, following the announcement of the faulty Samsung Galaxy Note 7, I have had a number of contacts in respect to concerns regarding this matter. Now firstly let me just point out Samsung are completing a product recall and your retailer or service provider will assist you with the recall process. Due to this if you are a business user who has this device then they will also assist you in finding a replacement handset, that is equivalent to the specifications of the Note 7 or provide you with sufficient information for you to make an informed decision. However, a faulty Note 7 alone will not necessarily permit you to exit the contract with a service provider. It may be worth noting that you are not always paying for the handset, but simply for your service provisions where the handset has been given to you as a gift. If you are paying for your handset as part of your package then in this instance you will be entitled to exchange the handset, or cancel the handset element but it will not entitle you to cancel the service provision aspect of the contract. This would be solely at the service provider discretion, as this of course, forms a business-to-business contract. Business-to-Business Contracts: Your Rights The law treats business-to-business contracts differently than it does business-to-consumer contracts. These differences include the following: 
  • Businesses do not get cooling off periods when signing up to contracts at home, on business premises or at a distance. Unless the contract you have with the company you are purchasing the product from states you have a cooling off period, you will not have one.
  • A large proportion of the legislation relating to unfair terms either do not apply in a business-to-business contract or only apply at the discretion of the court. It is always important therefore to check your terms and conditions prior to signing up to a contract.
  • The Consumer Rights Act 2015 does not apply to business-to-business transactions, however, a business contract is still afforded the same protection under Sale of Goods Act 1979, the Supply of Goods and Services Act 1982 and the Unfair Contract Terms Act 1977.
  • Goods must be fit for purpose and of satisfactory quality.
  • Where a commercial buyer takes delivery of goods and signs a delivery note stating that the goods have been “accepted” then it will be a question of fact whether the buyer has had a reasonable opportunity of examining those goods and legally accepted them. So it is important that you notify the provider of any fault, damage or defect upon receipt of the goods to demonstrate your rejection.
If you are a business and have any questions, please do not hesitate to get in touch. John Facenfield is an accredited mediator and Business Development Manager at The Retail Ombudsman.  

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