Legal Analysis Of Consumer Rights Act, 2015: Case Study On Faulty TV Set Purchase

Title: An ability to appropriately apply the law to business situations

You are required to follow the instructions as specified towards each task and support with research by using supportive materials like Case laws, legislations, Business Law textbooks, websites, etc., and give a feedback on the findings by relating your arguments to the relevant case studies as specified towards each task. The case studies are specified before each task below:-

After closing from work one day, Mr John decided to stop by a Departmental Store to check out the latest TV sets in stock with a view to replacing the old one at home. The store manager, Miss Sarah took Mr John round to show him all they have got in stock and answer all his questions about the TV sets. John was particularly impressed with one of the TV sets which the store manager described as ‘very high quality, durable and good value for money’. This was also written and pasted on the TV set as well. Mr John decided to purchase the flat screen 42?inch remote control TV set and after signing all the paper works, Mr John was informed that the TV set would be delivered to his house within the next three working days. Mr John was very happy when his new TV set was eventually delivered and installed by the engineers of the Departmental store.

The TV set was working fine for the first three weeks. However one fine day just as he sat down to enjoy the Sunday afternoon film, there was a flash and puffs of smoke could be seen coming out from the back of the set. When he called and informed the Departmental store about it, they said when the TV set was installed, it was working well and that Mr John had even signed the document issued by the engineers who had installed it as prove that everything was okay before they left,hence they will not be accepting any responsibility for the faulty TV. The Departmental Store also said the contractual document which John had signed had a clause which made it clear that the Store accepts no responsibility for the malfunctioning of goods once supplied and installed.

Mr John has now come to you for advice as to what his options are in law.

Address the above case study in dealing with the issues below.

Q1: Analyse and advice Mr John on the legal rules on implied terms relating to the sale of goods and supply of services.

Q2: Analyse and advice Mr John on the statutory provisions on the transfer of property and possession.

Q3 Evaluate the statutory provisions on buyer’s and seller’s remedies in sale of goods contracts.

Q4 Apply product liability statutory provisions for faulty goods

The issue in this question is related with the implied terms concerning the sale of goods and the supply of services. For this purpose, the provisions of Consumer Rights Act, 2015 need to be considered.

Consumer Rights Act, 2015 had been introduced by the government for the purpose of consolidating and overhauling the earlier consumer rights legislation in the UK that was considered to be confusing and fragmented. This legislation came into force on 1st October, 2015. This legislation replaces 8 existing laws, which includes the Sale of Goods Act, 1979 and also the Supply of Goods and Services Act, 1982.

Therefore in context of sale and supply of goods, the law provides that terms can be implied in consumer contracts according to which the (i) goods should be of satisfactory quality (ii) fit for a particular purpose and (iii) match the description shown to the consumer. In this regard, the Act provides that any pre-contact information like the details on payment, delivery and after sales service are also covered by the implied terms related with the contract (Avi,Cherrier and Canniford, 2006). In case the goods are found to be faulty or do not match the description, a short term right has been provided to the consumer according to which the goods can be rejected by the consumer within 30 days unless in case of perishable goods, where the expected shelf life of goods is shorter. Similarly, a right is also available to the consumers according to which they can make a request that the faulty or wrongly described goods need to be replaced or repaired. This provision is applicable even after the expiry of the 30 day right to reject the goods. Another right available to the consumers is to seek reduction in the price of goods or to reject the goods after they have made an unsuccessful attempt of replacing or repairing the goods.

The burden of proof in such cases lies on the consumer for establishing that the goods are not according to the contract if the consumer wants to exercise their short-term right to reject the goods or if after the expiry of more than six months, the consumer will be required to establish that the defect was present in the goods when they were delivered.

As is the case with the implied terms that were present under the Sale of Goods Act,. The law requires that the word should be of a particular standard. Therefore in this regard, it has been provided by the Consumer Rights Act that all the goods that have been supplied in accordance with the consumer contract need to be:-

• Of satisfactory quality;
• Fit for purpose;
• Match the description, model or sample; and
• They should be installed properly (if it is a part of contract).

Rights of consumers regarding return of goods. The consumers have an initial right of rejecting the goods. Automatically there is a period of 30 days to return the goods in case the goods failed to meet the implied terms unless the expected life of the goods is less than 30 days. This right allows the consumers to have complete refund of 100%. The rights of the consumers related with repair or replacement. In case the lapse of the period of 30 days or during this period, the consumer has decided that they are not going to exercise the right of rejecting the goods, the consumers will be entitled in the first instances to claim replacement or repair of goods (Ashlee and Grayson, 2008). There they will be considered to be a failure if after making an attempt related with repair or replacement of the goods, the goods still fail to meet the required conditions. The next right is related with production of price and the final right to reject the goods. In case repair or replacement of the goods is not available or remains unsuccessful for the consumer, the consumers are allowed by the law to blame a reduction in price or the final right to reject the goods. The refund or the reduction can go up to 100 percent of the value of the product.

Legal Analysis

However, it needs to be noted that the rights of the consumers mentioned above are subject to the below mentioned exclusions. Therefore the law provides that before contract (i) when the defects present in the goods have been brought to the notice of the consumer, or if the goods have been examined by the consumer and any such defects would have been obvious; (ii) when the consumer has a change of mind regarding the desire for the goods; (iii) or if the product was used for a particular purpose that is neither obvious nor made known to the trader; (iv), where the goods appeared due to fair wear and tear (this is applicable only six months after the goods have been supplied to the consumer).

In the present case, the television set purchase by John has been described as, of being excellent quality, durable and good value for money. However, just after three weeks, there was a flash and smoke coming out of the back of the television set. However, when John informed the departmental store, they claimed that at the time of the installation of the television set, it was working well. Moreover, a document was signed by John, given to him by the engineers wherein it was mentioned that everything was okay. Moreover, the departmental store also pointed out towards a clause present in the contractual document signed by John where it was stated that the store cannot be held responsible for the malfunctioning of goods after they have been supplied and installed. Under these circumstances, John wants to know if any remedies are available to him under the law. In view of the legal provisions mentioned above, it can be said that Consumer Rights Act, 2015 provides a remedy to the consumers including John in the present case.

In the present case, the Act allows John to reject the televisionand claim a refund of the price of the television set.

According to the Consumer Rights Act, the meaning of goods is any tangible, movable item. This includes gas, water and electricity only if these items have been supplied in a set quantity. All the contracts related with the supply of goods by the trader to the consumer fall under the purview of the Act. Therefore, it includes the sales, higher purchase and hire contracts. Although there are certain limited exceptions present in this regard. For example, the chattel mortgages, the sale of secondhand goods that have been sold during a public auction that can be attended by individuals in persons, the official sale of the property of a bankrupt and some other exceptions. Most of the provisions that have been mentioned in the Act consolidated the provisions of current law. For example, the statutory implied terms related with fitness for purpose, satisfactory quality and that the goods are going to match the description etc. However it is worth mentioning that several new provisions have also been incorporated (Fitchett and Ming, 2008).

For a number of years, the consumers who are purchasing traditional goods have taken the advantage of statutory remedies in case the terms have been breached by the supplier that can be implied in a contract of sale related with the goods. These remedies have been updated by the Consumer Rights Act, particularly with the help of the creation of a new short-term right, which allows the consumers to reject the goods and this legislation has also clarified the tiered structure regarding different remedies available to the consumers. At the same time, this legislation also extends several existing statutory remedies so that they may also include digital content and it also creates the remedies related with digital content as well as the services that have been supplied to the consumers.

Implied terms

A major change has been introduced with the enforcement of Consumer Rights Act, 2015. This change is related with the remedies that are available to the consumers. Therefore, briefly speaking, the legislation provides short cuts to the consumers to claim compensation. Therefore, if the goods turn out to be of unsatisfactory quality, the consumer may reject the goods and return them. In such a case, it is the responsibility of the business to collect the goods. However in this case, it is required that the consumer has not kept the goods for unreasonably long period. In this way, the Consumer Rights Act has introduced certainty and clarity regarding the remedies that are available to the consumers (Laczniak, Gene and Patrick, 2006). Therefore, in case of goods the Act provides that turns can still be implied in the consumer contracts according to which the goods should be as described, fit for a particular purpose and of satisfactory quality (Nill and Schibrowsky, 2007). The Act includes the terms that can be implied in consumer contracts. For example, it is required that the goods will match the model that has been examined by the consumer before the contract unless any major difference has been brought to the attention of the consumer before the contract. According to the Consumer Contracts Regulations, 2013 the changes are required to give specified the contractual information to the consumers in some cases. For example, this includes the details related with payment and delivery arrangements at the details of office sales service. According to the 2015 legislation, the pre-contact information has become an implied term of the contract. Similarly if the goods have been installed by the trader, it will be considered that the goods do not conform to contact if they have been installed incorrectly.

Short-term right to reject: this short-term right has been provided to the consumers to reject the faulty goods or the goods. That does not match the description within 30 days.

Repair or replacement: a guide has been provided to the consumers according to which they can make a request that for the goods or the goods that do not match the description should be repaired or replaced. This request can be made even after the expiry of the 30 days.

Final right to reject: a right has been provided to the consumers to seek reduction in the price or to reject the goods after one instance of unsuccessful replacement or repair.

As is the case with Sale of Goods Act, the Consumer Rights Act also requires that the products should be of satisfactory quality, matched the description and fit for purpose. These rules are also applicable in case of digital content. Therefore all the products, whether they are physical or digital, should fulfill the standards mentioned below.

Satisfactory quality: the goods should not be faulty or damaged when they are received by the consumers. In this regard, it can be seen if any reasonable person would consider it to be satisfactory for the particular goods.

Fit for purpose: the Consumer Rights Act also requires that the goods should be fit for the purpose for which they have been supplied to the consumers. At the same time the goods should also be fit for any particular purpose that has been told to the retailer by the consumer before agreeing to purchase the goods.

Match the description: it is also required under the law that the goods supplied to the consumer should match the description that has been given to the consumer or any sample or model that has been shown to the consumer before purchasing the goods.

References

Ashlee H and Grayson, K. (2008) “The Intersecting Roles of Consumer andProducer: A Critical Perspective on Co-production, Co-creation and Prosumption.’ Sociology Compass  

Avi, S., Cherrier, H. and Canniford, R. (2006) “Consumer Empowerment: A Foucauldian Interpretation. European Journal of Marketing 40:1013–30

Fitchett, J. and Ming L. (2008) “Consumer Experiences in the House of the Future: AnEnquiry into Surveillance-Based Consumer Research Techniques.” Consumption Markets &Culture  

Laczniak, G. R. and Patrick E. M. (2006) “Marketing, Consumers and Technology:Perspectives for Enhancing Ethical Transactions.” Business Ethics Quarterly 16: 313-21

Miller, D. (2007) National Responsibility and Global Justice. Oxford: Oxford UniversityPress

Nill, A. and John A. S. (2007) “Research on Marketing Ethics: A SystematicReview of the Literature.” Journal of Macromarketing