Car firms urged to review customer contracts

Law firm Moore Blatch is warning car dealerships and any other consumer-facing businesses to review their customer sales contracts and check compliance ahead of the Consumer Rights Act, which comes into force on 1st October 2015 and will give consumers new rights in respect of faulty or not as described goods, services and digital content.

The Act replaces a number of laws with regard to business-to-consumer transactions and introduces two new areas of law – digital content, meaning new rights for consumers to get a repair or replacement of faulty digital content, such as online films, games, music downloads, and e-books; and rules on what should happen if a service is not provided with reasonable care and skill, or as agreed. Consumers will now have a clear right to demand that substandard services are redone or failing that receive a price reduction.

In addition, the Act updates existing laws on what a business should do when goods are faulty, including a 30 day time period to return faulty goods and get a full refund. Before, there had not been a specific timeframe, just a ‘reasonable time’. Certain pre-contractual information provided by sales teams or in sales material may become an implied term of the contract so such information must be up-to-date and accurate to avoid claims for breach of such terms.

There will also be a clearly defined tiered structure setting out rights to a refund, repair or replacement of faulty goods, digital content and services.

Moore Blatch advises that businesses look to review their:

  • Sales contracts (including standard website and app terms);
  • Limitation of liability clauses, checking compliances and references to legislation;
  • Pre-contractual information (including notices and announcements); and
  • Cancellation and returns policies.

Sarah Crookall, associate solicitor, corporate and commercial, Moore Blatch, commented, ‘A lot of contractual paperwork and sales literature will have to be reviewed because of the new Consumer Rights Act, and it is important that businesses are careful and prepared for the new legislation. Also consumers will now have more rights to challenge terms and conditions which are not fair, or are hidden in the small print.’