Legal Analysis For ‘Crunchem Cars Ltd.’ And Its Customers - Essay.

Question:

‘Crunchem Cars Ltd.’ is a car dealership owned and run by Fred Wormwood The dealership sells both new and secondhand cars. Fred also has a secondary income which involves selling various electrical appliances from his home. However, Fred has received numerous complaints concerning some of the cars and electrical appliances he has recently sold.

A small notice displayed in the dealership office states:

‘No exchanges or refunds available. No liability for negligence. The Sale of Goods Act, The Consumer Protection Act, The Consumer Rights Act and all common law rules are hereby excluded from all sale contracts’

Michael owns a company that hires cars. He purchased two of the company’s new cars. When Michael got the cars home he noticed a long scratch on one of the new cars running along the vehicle’s roof.

Matilda, an Art and Design student from Yorkshire, purchases a top of the range soup maker for her new flat. She opened the appliance several weeks after purchase and realized that the glass jug, which is essential to the operation of the machine, was broken. Several accessories were also missing from the box.

Jennifer, an English degree student from Newcastle, purchased an overpriced second hand car from ‘Crunchem Cars Ltd.’ three weeks ago. Yesterday, Jennifer was driving home from college when her brakes failed to work effectively. Although Jennifer was not injured her passenger, Agatha, suffered whiplash.

Develop a 25 minute mock consultation which analyses any potential legalities that the company may face in relation to the 3 customers. 

Consumer protection in the United Kingdom is provided through the implementation of the different Acts of the Parliament, statutory instruments, government agencies, etc. The main purpose of the consumer protection is to provide such goods and services which ensure fairness in the transactions and quality of the goods and services purchased by the consumers (Gov.UK, 2018). This protection is provided by the law at the time when consumer purchased goods and services. It mainly provide in those situations, when consumers are treated unfairly and when things go in the wrong direction such as issues related to the contracts, faculty goods, poor services, issues related to the sellers, etc. The main areas for the purpose of regulating the consumer affairs include:

• Fair terms in the contracts in context of the goods and services, and these provisions consider the surprising and difficult terms as unfair.
• Product safety regulations ensure thatcustomers cannot purchase any such goods that are potentially harmful.
• Financial regulations are also made for providing accessto the cheaper credit and for the people so that they can understand the obligations they have while taking loans.

This paper defines the scenario of the consumer protection on the basis of three case studies and in this context we consider the provisions of The Sale of Goods Act, The Consumer Protection Act, The Consumer Rights Act, and the other relevant laws. Lastly, paper is concluded with brief conclusion.

Section 13 of the Consumer Rights Act 2015 states, in case goods supplied by the seller are examined on the basis of sample before entering into the contract of sale, then every contract on which this section applied must include these terms:

• Goods supplied by the seller must be matched with the sample, but there is an exception that any difference between the sample and the goods are informed to the consumer before both the parties enter into contract of sale.
• Goods must be free from any such defect which demeans the quality of the goods or such defect would not present at the time of the examination of the sample.

Section 19 (3) of the Consumer Act 2015 states, if the goods purchased by the consumer does not confirm to the contract because of the breach of any implied terms stated under section 13, then following rights are available to the consumer:

• Consumer has short term right to reject the goods under section 20 and 22 of the Act.
• Consumer also has right to repair and replace the goods under section 23 of the Act.
• Consumer has right to reduce the price of the goods and also has right to reject the goods under section 20 and 24 of the Act. 

Section 15 of the Sales of Goods Act 1979, applied on the sales of the goods by sample, and as per this section implied terms are there that sold goods must be match with the sample of the goods which are examined before the parties enter into contract of goods of sale. It also states that goods must be free from any defect and will be of satisfactory quality.

This section also defines the acceptability test under which purchaser purchased the goods on the reasonable price after having the knowledge of the defect. This can be understood through case law Shine V General Gurantee corp in 1988, second hand car was purchased by the purchaser from the dealer. After some time, it was revealed that the car had involved in the accident and sub-merged under the water. Judge stated that a reasonable person will not buy damaged car at a substantially reduced price.

Case Study 2

In the present case, Michael purchased two cars from the company, and when got the cars at home he notice long scratch on one of the new car. In this case, section 13 of the Consumer Rights Act 2015 is applied and as per this section goods provided by the seller must match with the sample. In this car has the defect which demeans the quality of the car. Therefore, section 19 provides following rights to the Michael:

• Short term right to reject the goods under section 20 and 22 of the Act.
• Right to repair and replace the goods under section 23 of the Act.
• Right to reduce the price of the goods and also has right reject the goods under section 20 and 24 of the Act.

Section 9 of the Consumer Rights Act 2015 states that every contract of the sale must include the term related to the satisfactory quality of the goods. Quality of the goods is satisfactory in nature if it meet those standards that any reasonable person would consider satisfactory, and for this purpose following things are taking into account:

• Description related to the goods.
• Price or other relevant considerations related to the goods.
• All the other necessary situations.

It must be noted that quality of the goods includes the state and condition of the goods, and the following elements in normal cases are considered as elements of the quality of the gods:

• Goods are fit for all the purposes for which goods are supplied.
• Appearance and finish of the goods.
• Goods are free from minor defects.
• Goods ensure safety.
• Goods ensure durability.

 It must be noted that term stated in clause 1 of this section does not cover anything which makes the quality of the goods unsatisfactory:

• In case defect particularly sated to the consumer before entering into contract of sale.
• In case consumer examines the goods before contract is made and at the time of examination such defect is present.
• In case of a contract of sale of goods by sample, defect is present at the time of reasonable examination of sample.

 Section 14 of the Sales of Goods Act 1979 states, there is no implied warranty in the context of fitness of particular purpose or quality of the goods provided under the contract of sale. In case seller sells the good then there is implied warranty that goods supplied in the contract are of satisfactory quality.

In context of this Act, goods are of satisfactory quality in case goods meet the standard that reasonable person would considered satisfactory and for this purpose they consider the description of the goods, price of the goods and other necessary situations. 

Section 14 is considered as condition in the sales of goods act, and this section is applied in case when goods are sold under commercial purpose and it does not apply if goods are sold in private capacity. However, any misrepresentation or breach of this implied term may be considered as breach of contract. The Sales of Goods in the Course of business has been described in broader context by the Court. However, there is strict applicability of section 14 in case of fault of seller.

This can be understood through case law Stevenson v Rogers 1999, in this case Court explains the section 14 in context of fisherman who sold his boat. In this Court decided that fisherman breach section 14 of SGA.

Case Study 3

Section 19 (3) of the Consumer Act 2015 states that if the goods purchased by the consumer does not confirm to the contract because of the breach of any implied terms stated under section 9, then following rights are available to the consumer:

• Consumer has short term right to reject the goods under section 20 and 22 of the Act.
• Consumer also has right to repair and replace the goods under section 23 of the Act.
• Consumer has right to reduce the price of the goods and also has right reject the goods under section 20 and 24 of the Act.

In the present case, Matilda purchased top range of soup maker for the purpose of her new flat. After purchasing the appliance, she opened it after some weeks and found that jug was broken and jug was the necessary tool for the operation of the machine. Some other accessories are also missing. 

In this case, section 9 of the Consumer Act 2015 is applied which states that every contract of sale must include the term related to the satisfactory quality of the goods. Quality of the goods must be satisfactory in nature and this requirement is met if such goods meet those standards that any reasonable person would consider satisfactory. In this case, Matilda has right to replace the goods under section 23. As per section 23 if consumer wants to repair the goods then it is the duty of trader to repair or replace the goods and the trader must:

• Trader must repair or replace or repair the goods within reasonable period of time without causing any inconvenience to the consumer.
• Trader must bear the necessary cost which is incurred for repairing or replacing the goods.

Section 9 of the Consumer Rights Act 2015 states that every contract of sale must include the term related to satisfactory quality of the goods. Quality of the goods is satisfactory in nature in case it meet those standards that any reasonable person would consider satisfactory, and for this purpose following things are taking into account:

• Description related to the goods.
• Price or other relevant considerations related to the goods.
• All the other necessary situations.

It must be noted that quality of the goods includes the state and condition of the goods, and the following elements in normal cases are considered as elements of quality of the gods:

• Goods are fit for all the purposes for which goods are supplied.
• Appearance and finish of the goods.
• Goods are free from minor defects.
• Goods ensure safety.
• Goods ensure durability.

Section 2 of the Consumer Protection Act 1987 states the liability for the defective products, and as per this section damage is caused wholly or partly by the defect occurred in the product, and any person on whom this section is applied are liable to pay damages. Following are the persons on whom this section is applied:

• Producer of the product.
• Any person who put his name on the product or use the trademark or any other mark related to the product, or consider himself producer of the product.

In the present case, Jennifer purchased a second hand car which is overpriced from the Crunchem Cars Ltd. After some time, breaks of the car failed and do not work effectively. Though, Jenifer does not injure her passenger but Agatha, suffered whiplash. In the present case, Crunchem Cars Ltd is liable for damages under section 2 of the Consumer Protection Act 1987. 

Section 31 of the Consumer Rights act 2015 states that it is not possible for trader to exclude or restrict its liability which arise under any of the provisions stated below:

• Provision related to satisfactory quality of the goods (Section 9).
• Goods must be fit for particular purpose (section 10).
• Goods must be match with the description (Section 11)
• Goods must be match with the sample (Section 13).

This section further states that any term in the contract related to sales of goods is not binding on the consumer up to the extent that such term would be:

• Such term specifically excludes the right or remedy available to the consumer.
• Such term makes right or remedy exercisable on the basis of restrictive or onerous condition.
• As it allows the trader to put the buyer on the disadvantage because of such right or remedy.
• As it excludes or restrict the rules of evidence or procedures.

Therefore, in this case it is not possible for Fred Wormwood to exclude the liability in above stated cases on the basis of exclusion clause stated in the file.

Conclusion:

After considering the above facts, it can be said that United Kingdom introduce number of Acts for ensuring the consumer protection in the country, and these Acts also impose obligation on the traders to act fairly with the consumers. Consumer protection is provided by the law at the time when consumers purchased the goods and services. This protection is provided when consumer is treated unfairly and when things go in wrong direction such as issues related to contracts, faculty goods, poor services, issues related to sellers, etc. 

References:

Consumer Protection Act 1987- Section 2.

Consumer rights Act 2015- Section 13.

Consumer rights Act 2015- Section 19.

Consumer rights Act 2015- Section 31.

Consumer rights Act 2015- Section 9.

Gov.UK. Consumer Rights. Available at: https://www.gov.uk/consumer-protection-rights. Accessed on 8^th February 2018.

OutLaw.com. The Consumer Rights Act: consolidating UK consumer protection laws. Available at: https://www.out-law.com/en/topics/commercial/consumer-protection/the-consumer-rights-act-consolidating-uk-consumer-protection-laws/. Accessed on 8^th February 2018.

Shine V General Gurantee corp in 1988.

Stevenson v Rogers 1999.

The Sales of Goods Act 1979- Section 14.

The Sales of Goods Act 1979- Section 15.