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The Consumer Rights Act 2015: Simplifying the Law for Businesses and Consumers

15 Mar 2016

The Consumer Rights Act came into force fairly recently on 1 October 2015 to consolidate and modernise the law relating to the purchase of goods and services by consumers, while improving the benefits for consumers and businesses. The Act applies exclusively to consumers; private sellers and buyers who are not acting in the course of a business are not covered by the Act.

The theory behind this Act is that the law will become clearer and more understandable; consumers are more likely to buy – and businesses can sell to them – with confidence. Should a problem arise, both parties will be able to resolve disputes quickly and cheaply. The intention is that both businesses and consumers who understand their rights and responsibilities will save time and money.

What about other consumer laws?

The Consumer Rights Act largely replaces and consolidates the three major pieces of consumer legislation: the Sale of Goods Act, the Unfair Terms in Consumer Contracts Regulations and the Supply of Goods and Services Act.

How has the law developed?

The Consumer Rights Act introduces or refines the following principles:

  • 30 day decision period –

The consumer has 30 days to ‘reject’ goods and obtain a full refund if goods are faulty;

  • Tiered remedy system –

There is now a tiered remedy system in place for faulty goods, digital content and services. Whether a consumer is entitled to a refund depends on how much time has passed since the purchase;

  • Refund eligibility –

If the business fails to repair or replace a faulty item, the consumer is entitled to ask for a refund or price reduction;

  • Alternative options to a refund/reduction –

If the consumer does not want a refund or price reduction, the consumer is entitled to a second repair or replacement at no cost;

  • Refund value –

No deduction is allowed from a refund in the first 6 months after purchase, except where the purchase is a motor vehicle;

  • Digital products –

Consumers have rights in relation to online digital content that is paid for, digital content supplied free with paid-for items and digital content supplied on a physical medium; and

  • Contract negotiations –

Consumers can challenge key terms of a contract, including price, on the basis that they are unfair unless they are prominent and transparent.

Notable similarities

Those with knowledge of the Sale of Goods Act will find the ‘product quality’ provisions of the Act familiar, as the Consumer Rights Act requires that goods (whether physical or digital) must be of satisfactory quality, fit for purpose and as described.

Likewise for services, the general principles in the Supply of Goods and Services Act live on in the Consumer Rights Act; any supplier of a service, whether with or without goods, must adhere to the following:

  • The service must be performed with reasonable care and skill;
  • Information which is said or written is binding where the consumer relies upon it;
  • Where the price is not agreed beforehand, the service must be provided for a reasonable sum; and
  • The service must be carried out in a reasonable time.

If the service provided doesn’t satisfy the above criteria the consumer is entitled to rectification of the element of the service which is inadequate or performance of the whole service again at no extra cost, within a reasonable time and without causing significant inconvenience. Or, where that is not possible, a price reduction.

More options for resolving consumer disputes

In those rare occasions where a dispute does arise, Alternative Dispute Resolution (ADR) is now available to all businesses when it cannot be settled directly. A business should make the consumer aware of a relevant certified ADR provider and whether or not they are prepared to use the ADR provider to deal with the dispute. Please note that a business is not forced to use ADR unless it operates in a sector where existing legislation makes it mandatory.

For further information, please contact Jan Rzedzian

Call: 0191 232 8345

Email: Jan.Rzedzian@hay-kilner.co.uk