As a trader, your dealings with consumer-customers are much more strictly controlled than your dealings with business-customers.
A consumer is a person who purchases goods, services or digital content for their personal use and not as part of their business, profession, trade or craft. Law considers consumers to be in a weaker bargaining position in relation to traders and therefore offers them broader protections in an effort to bring balance to the trader-consumer relationship. As a trader you cannot contract out of your obligations or exclude or (unreasonably) limit your liability in a consumer contract.
The Consumer Contract Regulations came into force on 13 June 2014 and the Consumer Rights Act became law on 1 October 2015. Together, they bring significant changes to consumer rights and ultimately greater protection for consumers.
One of the protections offered is the right to cancel a contract without giving any reason during a specific time period, called “cooling-off” period, when the consumer enters into a transaction at a place which is not the trader’s business premises or at a distance, for example online. A cooling off period is usually 14 days from the delivery of the goods or, for services and digital content, after conclusion of the contract.
You might think the distinction of whether you deal with your customers at your premises, at a distance or at a place which is not your business premises would be clear. But things are not as straight forward.
What if the transaction was made at a kiosk you regularly use at a monthly fair taking place at the town’s square? One might classify this transaction as an off-premises, but the law says that “business premises means any immovable retail premises where the activity of the trader is carried out on a permanent basis OR any movable retail premises where the activity of the trader is carried out on a usual basis”. The key factor here is the regular use and not so much if the premises are movable or immovable. What will be considered as usual will depend on the circumstances, but in the example given above, it is very likely that this is an on-premises contract which means you most likely do not have to offer a cooling-off period!
What if one of your representatives approached a consumer on the street and immediately after discussing the services the consumer entered your shop and concluded the transaction? Is that an on-premises or off-premises contract? That will be an off-premises contract and the consumer will have the right to cancel within 14 days. That is because the law wants to protect the consumer from aggressive sales tactics that do not allow for time to think and reflect before making the purchase.
The above are just a couple of examples where you might fall foul of the regulations regarding the provisions of cooling-off periods. The law will classify each transaction not only based on the facts but also under the light of the law’s ultimate goal which is to protect consumers.
Our corporate commercial lawyers have extensive experience in reviewing and drafting terms and conditions of business and will help you make sure your dealings with your customers are in line with consumer protection laws.Find out more about our Corporate Commercial department