Contracts for the supply of digital content
Under the current law, no specific statutory obligations, rights or remedies apply where a trader supplies digital content. Under the CRA:
- Quality Standards: New statutory quality standards (which cannot be limited or excluded) will apply to supplies of digital content to consumers. These are very similar to the quality standards that will apply to goods;
- Statutory remedies: A consumer will have specific statutory remedies if digital content does not meet the statutory quality standards. A consumer will have the right to have non-conforming digital content repaired or replaced and there will also be a right to a price reduction in certain circumstances (e.g. if digital content cannot be repaired or replaced within a reasonable time). Unlike goods, however, there will be no right for consumers to reject digital content and receive a refund. That said, if digital content is supplied in a tangible form (e.g. on a disk or as part of a digital camera) and the digital content is faulty, the product as a whole will automatically be deemed not to conform to the contract and the full range of goods remedies will apply (including a right to reject).
Generally, the rights and remedies set out in the CRA relating to digital content will only apply where:
- a consumer pays for the digital content with money or a facility which has monetary value (such as a token, virtual currency or a gift voucher); or
- the digital content is associated with paid for goods, other digital content or services (e.g. it comes free with a paid for magazine).
However, the CRA also includes certain rights that are not conditional upon the digital content having been “paid for”. Such rights and the related remedies apply where digital content supplied by a trader causes damage to a device or other digital content owned by the consumer.
Contracts for the supply of services
- New quality standard: As well as an obligation to supply services with reasonable care and skill, a trader will be subject to a new obligation to ensure that the service it provides complies with any information that the trader has voluntarily supplied (orally or in writing) to the consumer, where the consumer has taken this information into account when making any decision about the service (including whether to enter into the contract).
In addition, any service supplied will need to continue to comply with any pre-contract information supplied under the 2013 Regulations.
- New statutory remedies: If a service is not provided with reasonable care and skill or in line with information provided by the trader about the service, the service will not conform to the contract. In this situation, a consumer will have the right to require that the service is re-performed properly (this may require the trader to re-perform all or part of the service). The consumer can also require a price reduction in certain circumstances (e.g. if it is not possible for the trader to re-perform the service or if the service is not re-performed in conformity with the contract within a reasonable time).
The provisions in the CRA relating to services contracts will not apply to contracts of employment or apprenticeship. Also, where there is legislation that contains more detailed provisions about the rights or duties that apply to certain services, such provisions will take precedence over the services provisions included in the CRA.
Exclusions and limitations of liability and unfair terms
The CRA creates a new regime (a combination of UCTA and the UTCCRs) that will control attempts to exclude or limit a consumer’s rights and remedies under the CRA and also the inclusion of unfair terms in consumer contracts. For the most part, the CRA prohibits attempts by traders to limit or exclude their statutory liability (though there are certain exceptions). The provisions relating to unfair terms largely repeat the laws currently set out in the UTCCRs (which will be repealed when the CRA comes into force).
WHAT SHOULD YOU DO TO COMPLY WITH THE CRA?
- Familiarise yourself with the specific rules that will apply to the types of contract your business enters into;
- Conduct an audit of your standard terms, other consumer related documentation, your website, and your policies and procedures to identify any changes that will need to be made;
- Implement the necessary changes by 1st October (e.g. prepare new versions of your standard terms and returns policies);
- Train members of staff who deal with customers on the new rights and remedies consumers will have.
The Trading Standards Institute has recently produced a number of business companion guides on the CRA which you may find useful. It has also produced sample "point of sale" information which businesses can use to inform consumers about their rights.
This would also be a good time, if you have not already done so, to check that you are compliant with the 2013 Regulations. The 2013 Regulations are particularly important if you supply goods, services or digital content to consumers online.
HOW CAN GELDARDS HELP?
- We can provide bespoke training to you and your staff to help you get ready for the changes that the CRA will introduce.
- We can help you to identify areas of risk within your business.
- We can assist you to make any necessary changes to your standard terms, website, policies and procedures etc.
If you would like any further information about the CRA or the ways in which Geldards may be able to assist your business, don’t hesitate to contact any member of the commercial team.
Please also keep an eye out for our additional guides on the CRA, which will look in more detail at certain aspects of the changes.
ONE MORE THING…
In addition to CRA, other consumer law changes are also in the pipeline. From October of this year, new rules will come into force relating to the use of alternative forms of dispute resolution (“ADR”) to settle disputes relating to consumer contracts (for example, mediation). Amongst other things, the new laws will, in certain circumstances, introduce obligations on traders to signpost consumers to the availability of ADR as a means of resolving disputes. Keep an eye out for our guide on the ADR Regulations.
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