• Startups
  • January 06, 2015

Consumer Contracts - Are You Up To Date?

By Lawbite Team

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  In the summer of 2014, changes were made to rules relating to Consumer Contracts, which affect most businesses. The law in relation to contracts made between a consumer and a trader changed on 13 June 2014, with the introduction of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.   
What you should know and does it affect your business? The Regulations affect 'Traders' and 'Consumers', so it is useful to know whether you are a 'Trader' or a 'Consumer'. A trader is someone acting in relation to their trade, business, craft or profession, whether acting personally or through another person who may be acting in the Trader's name or on the trader's behalf e.g. under a Company or via an agent/employee. A Consumer is an individual acting for purposes wholly or mainly outside that individual's trade, business, craft or profession; There are important changes that traders should be aware of. It is a good idea to review your contracts and have your systems in order to make sure you are fully compliant: •    Your Consumers under distance contracts and off premises contracts must be told that they have a right to cancel. •    Some Contracts will have the 'cooling-off period' extended from 7 to 14 days, allowing Consumers the right to cancel within a longer time-frame. Consumers can cancel within 14 days of the date of the contract for services and within 14 days of receipt of the goods for a contract for the supply of goods or (for both) 14 days from the date on which all the required pre-contract information has been provided to the consumer. There are specific requirements also for when the information should be given and can varies depending on the type of contract. •    Where the is a right to Cancel exists and before the Consumer becomes bound by the contract, you must provide the consumer with a Model Cancellation Form. •    If you create or agree a contract on the phone, you must identify yourself and explain the commercial reason for calling at the start of the call. •    Any phone calls made by Consumers to discuss an on-going or existing Contract should not be charged at a premium rate but a basic rate. •   There is a requirement to provide certain pre-contact information- most types of contracts must state your (trader's) contact details, name and address, the main features of the goods/services, price information, length of the contract and termination conditions. •    If you need to take any additional payments you must have the consumer's consent before hand. You cannot have pre-ticked boxes for added extras, they must have been agreed to expressly by the Consumer. •  Any goods should be delivered to Consumers within 30 days unless this has been discussed and agreed otherwise. •  For Contracts that have been created online, you need to make sure that the consumer knows that by placing an order there is an obligation to pay. This means that any buttons which initiate payment must be expressly marked with "order with an obligation to pay" or something very similar. The rules are detailed and need to be applied depending on how you operate your business eg. online trading, off-premises (which is described in the regulations) so it is worth reviewing how you operate and ensuring you are working within the rules.   Rafiya Shaikh - 

LawBite Commercial LawBrief. For further legal advice you can contact Rafiya via our online legal advice portal.       Journey further...

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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