Remedies in the Consumer Rights Act 2015
In the second of a series of articles on the new consumer rights legislation, Professor Chris Willett discusses the remedies available when goods and digital content do not conform to the contract
This article deals with the repair, replacement, price reduction, and long-term rejection remedies in goods and digital content (DC) contracts. These remedies (which are alternatives to the short-term right to reject, but which are only time-limited by the general limitation rules) have been available in sale and some other supply of goods contracts since 2003. The Consumer Rights Act (CRA) 2015 extends them to other goods contracts (most importantly hire and hire-purchase), and all except the final right to reject are extended to DC contracts, although full refunds are sometimes available for DC.
General rules on applicability
In goods contracts these remedies apply where the goods do not conform to the contract:By being in breach of the terms on satisfactory quality, fitness for particular purpose, description, compliance with sample, or compliance with a model seen or examined;
By containing defective digital content;
By having been installed incorrectly;
By being in breach of requirements 'stated in the contract' (i.e. in breach of an express term).
In DC contracts, these remedies apply where the DC does not conform to the contract by being in breach of the terms on satisfactory quality, fitness for particular purpose, and description.
Note should be made of provisions requiring the trader to repair (or provide compensation) where DC that they have supplied under a contract causes damage to a device or DC owned by the consumer, the damage being of a type that would not have occurred if the trader had exercised reasonable care.
However, it is also important to note that in many cases where DC causes such damage, it will be because the DC is of unsatisfactory quality. The consumer will then be able to ask for repair (or replacement) or claim damages for breach of the strict liability term on satisfactory quality provision, which will normally be a more straightforward claim than entering into debates as to whether there has been a lack of reasonable care. Burden of proof rule
In the case of the repair, replacement, price reduction, and final rejection remedies, consumers are assisted by a reversal of the burden of proof during a six-month period following delivery of the goods or DC.
So, in relation to goods, section 19(14) provides that 'goods which do not conform to the contract at any time within the period of six months beginning with the day on which the goods were delivered to the consumer must be taken not to have conformed to it on that day' (for the identical provisions in DC contracts, see section 42(9)-(10)).
This is qualified by section 19(15), which provides that section 19(14) does not apply where:
It is established that the goods did conform to the contract on that day (see Froukje Faber v Autobedrijf Hazet Ochten BV (C-497/13)); and
Its application is incompatible with the nature of the goods or with how they fail to conform to the contract.
An obvious example of what is set out in section 19(15)(b) would be goods which have a very short life and which break down or deteriorate after that time. Take, for example, food that deteriorates after the use by date, which date is two weeks after the purchase. Although this deterioration takes place after, say, one month (well within the six-month period), it is incompatible with the goods and the nature of the defect to presume that the defect existed when the food was supplied.
Repair or replacement
Consumers can first ask either for repair or for replacement in relation to non-conformities in goods and DC contracts. 'Repair' means bringing the goods or DC into conformity with the contract (i.e. fixing whatever makes the goods or DC of unsatisfactory quality, unfit for purpose, etc.). 'Replacement' is not defined, but involves replacement of the overall thing that was
The repair or replacement must be done within a reasonable time and without signi?cant inconvenience to the consumer (taking into account the nature of the goods or DC and the purpose of the purchase), and the trader must bear any necessary costs incurred in doing so (e.g. labour, materials, or postage).
The 'reasonable time' requirement will depend on the facts of the particular case. In some cases (a wedding dress being an obvious example) the number of days involved in repair or replacement will be critical and, perhaps, decisive. As to the 'significant inconvenience', this might apply where the repair or replacement disrupts everyday living (e.g. a trader insists on removing or turning off a toilet or washing facilities during repairs or replacements).
The consumer cannot require the trader to repair or replace the goods if that remedy is impossible, or disproportionate compared to the other remedy. So, for example, repair might be impossible if goods or DC have been destroyed, or are otherwise beyond repair, while replacement is impossible in the case of unique items (e.g. works of art). Repair is disproportionate compared to replacement (or vice versa) if it imposes costs on the trader which are unreasonable compared to those imposed by the other, taking into account the value which the goods would have if they conformed to the contract, the significance of the lack of conformity, and whether the other remedy could be effected without significant inconvenience to the consumer.
In broad terms, this involves asking whether the costs to the trader are unreasonable compared to the other remedy. However, this is not looked at in isolation - we can see from the criteria in sections 23 and 43 that account needs to be taken of the economic and other significance of the defect, as well as at the inconvenience for the consumer in being required to accept the other remedy. For example, if a replacement would cost £50 but repair would cost £100, then repair might be disproportionate; however, if replacement goods or DC cannot be provided for some time, especially if the goods are everyday necessities,
it would not.
If the buyer asks the seller to repair or replace the goods or DC, they cannot change their mind and ask for the other remedy until they have given the seller a reasonable time to effect the remedy that was first asked for. Where the consumer has asked for repair or replacement, they may not then seek to enforce the short-term right to reject without first giving the trader a reasonable time to carry out the repair or replacement.
Price reduction and final rejection
Consumers can demand a price reduction or a final right to reject if:
The goods do not conform after one attempted repair or replacement;
Both repair and replacement are either impossible or disproportionate; or
The requested remedy is not provided within a 'reasonable time' or 'without causing significant inconvenience' to the consumer'.
As with the short-term right to reject, the final right to reject (FRR) enables the consumer to treat the contract as at an end and obtain a refund; the consumer must make the goods available and the trader must bear any reasonable costs of their return; and the trader must provide the refund without undue delay and, in any event, within 14 days of agreeing it is due, and must not impose any fee in respect of the refund.
In contrast with the short-term right to reject (which generates a full refund), if the consumer exercises the FRR, the refund may be reduced to take account of the use the consumer has had of the goods in the period since they were delivered. This rule normally only applies after six months. However, in the case of cars, such a deduction can be made even if the FRR is exercised in the first six months.
The right to a price reduction (PR) requires the trader to reduce by an appropriate amount the price the consumer is required to pay under the contract, or to provide a refund of anything already paid above the reduced amount. The amount of the reduction may, where appropriate, be the full amount of the price or whatever the consumer is required to transfer. In the end, what is an 'appropriate' PR should depend on the extent to which the non-conformity reduces the value of the goods and what it would cost to have them repaired by a third party.
Unlike with the FRR, there is no express provision requiring the trader to provide a PR without delay or within 14 days, and neither is there any express provision saying that no charge can be imposed by the trader.
Unlike in the case of goods contracts, there is no 'one shot' rule (i.e. no right to demand PR just based on there having been one failed repair or replacement) in DC contracts.