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UK contract law and consumer legislation
Contract and Consumer Legislation
Hobby Tech Ltd, a mail order business selling electronic components and test equipment to the public, has recently started trading. We have been asked to advise on issues relating to contracts with suppliers and the current consumer protection legislation.
Supplier and Contract Law
Contract Law in the UK is legislated through the Sale and Supply of Goods Act (HMSO 1994), which provides for protection of the seller and the buyer.
When Hobby Tech Ltd., agrees to purchase goods from a supplier, a contract comes into force. Both parties, by signifying acceptance, are legally bound by the terms and conditions of that contract (Chen-Wisehart, 2005). In this case, that there will be a supply of X number of goods in exchange for a predetermined payment from Hobby Tech Ltd.
Under the contract terms, Hobby Tech can expect that the goods they receive should: -
- Be of the type, quality and quantity agreed to within the contract. (Ewan McKendrick, 2005)
- Arrive in the condition that the supplier promised they would be, i.e. working order.
- Comply with all existing regulations applicable to them. In this case it means that they also must comply with safety standards as set down within the Electrical Equipment (Safety) Regulations Act (1994).
- Be delivered in the agreed timescale.
It should be noted that title of goods passes from the seller to the buyer once the buyer is satisfied all of above points have been covered, has inspected the goods and notified the seller of acceptance, and have paid for the goods, unless later payment dates have been agreed. In the event of a breach, the act provides for protection and remedies for both the seller and the buyer. If Hobby Tech does not pay for the goods, but has accepted them, the seller has the right to redress through the courts for the payment and any damages incurred. Similarly, if there are breaches on the part of the seller, for example goods are faulty or not up to safety standards, Hobby Tech Ltd. has the right to seek redress and damages.
In view of the industry and structure of Hobby Tech’s business, three areas of law need to be considered. The following guide provides a brief outline of these.
- Supply of Goods and Services
The terms and conditions of the Sale of Goods Act also apply to consumers. However, in additions to those discussed, the act includes additional rights for the consumer as a buyer in the case of breaches. These include the consumer demanding the repair or replacement of the goods and their right to rescind the contract completely should the goods be faulty or not as agreed (A Traders Guide 2005).
- Consumer protection Act 1987
In addition to A) above, the consumer can seek redress under the Consumer Protection Act 1987. (Geraint Howells and Steve Weatherill 2005). This provides them with the ability to claim damages for a period of up to six years from date of purchase, in the event of faulty goods or damage, for example to the consumers property (Consumers Affairs Directorate 2001). However, the consumer has to prove purchase. They are also able to claim against the seller in the event of injury caused to themselves or others within the same six-year period.
- Mail Order Regulations
As Hobby Tech Ltd is conducting its sales through Mail Order, the Consumer Protection (Distance Selling) Regulations 2000 also apply (HMSO 2000). This entitles the consumer to specific buyer details prior to acceptance of the purchase, as well as right to cancel (sec 10-11) and protection and redress in respect of credit card and instalment payments. Once the buyer has complained he does not have to return the goods, buy he or she must make them available for collection.
Similarly this act protects the consumer against goods being sent speculatively, which were not ordered. It all cases they can require the seller to collect.
- Electrical Safety
Electrical goods of the nature sold are regulated by the Electrical Equipment (Safety) Regulations 1994 (HMSO 1994). Under this regulation, the consumer is protected against damage that might be caused by the receipt of electrical goods that either is not certified in accordance with current British Safety Standards, and this must clearly be indicated, or goods are faulty and, as a result, cause damage to the buyer or their property. The redress for the buyer will be against the seller, not the manufacturer of the goods.
Whilst the terms and conditions in respect of the contracts between Hobby Tech Ltd and its supplier are contained within the Sale of Goods Act (1994), they need to be aware that, due to the products they are selling, and the manner of sale, namely mail order, the terms and conditions of several other acts as outlined, need to be abided by. The Acts and regulations supersede any warranties that the firm itself may offer to the consumer.
A Traders Guide (2005). The Law Relating to the Supply of Goods and Services. Department of Trade and Industry. London. UK
Chen-Wishart (2005). Contract Law. Oxford University Press. UK.
Consumers Affairs Directorate (2001) Guide to the Consumer Protection Act 1987: Product Liability and Safety Provisions. Department of Trade and Industry. London. UK
HMSO (1994) The Electrical Equipment (Safety) Regulations 1994 retrieved 1 December 2006 from http://www.opsi.gov.uk/SI/si1994/Uksi_19943260_en_1.htm
HMSO (1994). Sale and Supply of Goods Act 1994 retrieved 30 November 2006 from http://www.opsi.gov.uk/acts/acts1994/Ukpga_19940035_en_1.htm#tcon
HMSO (2000) The Consumer Protection (Distance Selling) Regulations 2000. retrieved 30 November 2006 from http://www.opsi.gov.uk/si/si2000/20002334.htm
Howells, Geraint and Weatherill, Steve (2005) Consumer Protection Law. Avebury Technical. UK
McKendrick Ewan (2005) Contract Law. Palgrave MacMillan. UK
 See parts III and IV of the Sale and Supply of Goods Act (1979) and amendments 1994
 See parts V and VI of the Sale and Supply of Goods Act (1979) and amendments 1994
 See part 5A of the Sale and Supply of Goods Act (1979) and amendments 1994
 See The Consumer Protection (Distance Selling) Regulations 2000, sec 7
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