Outline how consumers are protected in contracts for the sale of goods.

by sean54378346 (student)

Jed Hatton BTEC Reg No. BA80147

Unit 21 Contract and Business Law P2

What is a standard form contract?

A standard form contract is a contract between two parties that does not allow for negotiation, i.e. take it or leave it. It is often a contract that is entered into between unequal bargaining partners, such as when an individual customer is given a contract by the salesperson of a multinational corporation. The customer is in no position to renegotiate the standard terms of the contract and the company's representative usually does not have the authority to do so.

Statutes:

The Sales of Goods Act 1979

The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulates English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidates the original Sale of Goods Act 1893 and subsequent legislation, which in turn had changed the law.

For example, if someone buys a washing machine they would expect it to last for at least 3 years usage. The individual who bought the washing machine would be protected under the sales of goods act if the washing machine breaks; they would be refunded with a new washing machine or a sum of money.

The sales of goods act 1979 affects contractual terms because in the contract the user is protected from multiple situations if the goods aren’t of expected quality. Should the statute be breached the vendor is held responsible by law. It is an implied terms as it isn’t negotiable and is set as a benchmark for the seller of the goods to meet.

The sale and supply of goods and services act 1994

The sale and supply of goods and services act 1994 is a statute from the United Kingdom which governs contract law of the supply of goods and services. It confirms that the goods supplied are of satisfactory quality, this is the standard that a reasonable person would call satisfactory. The individual must take into consideration the appearance and finish, freedom and minor defects, safety and durability.

For example, when Rocky Tops purchased their climbing goods from Weathering Heights and discovered that the items didn’t work. In this situation they would be eligible for a refund or a replacement of the goods under this statute as the products weren’t fit for purpose.

The sale and supply of goods and services act 1994 affects contractual terms because it safe guards the buyer from spending money and receiving goods that do not work. It is an implied contractual term as the buyer should always expect the upmost usability of the product or service purchased.

The sale and supply of ...

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The sale and supply of goods and services consumer regulations 2002

The sale and supply of goods and services consumer regulations 2002 contain a few amendments of the previous act in 1994. They are mostly additional implied terms in consumer cases; at the time the contract was made the consumer didn’t know about the statement or not been made aware of the statement.

For example, if a contract was drawn up by the seller and he or she didn’t express one of the statements properly and the buyer was to sign and accept the contract without being aware of what they are getting themselves into the statute protects the individual from being tied to the contract.

This statute affects contractual terms because the seller cannot write statements embedded deep into the contract the buyer might not be aware of. It stops the buyer signing themselves into anything that they don’t understand fully or were not aware of. It is an implied term as it cannot be negotiated and is fixed for the purpose of protecting the buyer.

Consumer Protection (Distance Selling) Regulations 2000

The consumer protection (Distance Selling) regulations 2000 was put in place to protect buyers and make the process of purchasing goods from a distance a more pleasurable and secure experience. This is really important and a needed statute due to the boost in e-commerce and online trading. A number of details of the supplier must be complete before the contract, this includes; a clear identity of the supplier, the suppliers address, a description of the service, price of the goods including all taxes, delivery costs, arrangement for payment, existence of cancellation, the period for which the offer is valid and the minimum duration of the contract.

So for example, if you were to buy an item online, the Consumer Protection (Distance Selling) regulations 2000 would ensure that the supplier has all details in place like the overall price with no hidden costs, the correct address and a clear identity with contact details of the supplier. If these are not met during the contract then the consumer is protected and can take the supplier to court for a refund or replacement.

The Consumer Protection (Distance Selling) Regulations 2000 affects the contractual terms of online business because it ensures that the supplier is totally upfront with all details and nothing is hidden. It is an implied term because the act’s principles cannot be negotiated.

Unfair Contract Terms Consumer Regulation 1999

The Unfair Contract Terms Consumer Regulation 1999 applies when unfair terms are concluded between a supplier and consumer. Unfair terms include; contractual term which has not been individually negotiated, in this case the individual that claims it was not negotiated together must prove that it was.

For example, if Weathering Heights included in their contract that Rocky Tops must pay an extra £10 per month for using their brand name on the equipment. Rocky Tops didn’t negotiate this deal and wasn’t addressed when the contract was created. The Unfair Contract Terms Consumer Regulation 1999 would protect Rocky Tops from having to pay the extra money as they were not informed by Weathering Heights of an extra charge.

This statue affects contractual terms because it protects consumers from entering unfair contracts that haven’t been mutually agreed upon by both parties. The unfair contract terms are expressed as they can be negotiated and changed if one party do not agree.

Trade Description 1968

The Trade Description Act of 1968 ensures that all products sold have an accurate trade description, any suppliers selling goods that do not match the description will be held accountable by this act in court. The trade description must be accurate, this includes; quantity or size, method of manufacture or production, fitness for purpose, strength, performance, testing results, approval by an identity, place or date of manufacture or production and other history including previous ownership or use.

For example, if someone lists an item to sell on eBay as “New” when in fact it has been used by them then the consumer is protected and eligible for a refund as the description doesn’t match the product.

The trade descriptions act 1968 affects contractual terms because all descriptions that are aimed to sell the product have to be true. The trade description act is both implied and expressed term, some things like the quality of the product can be negotiated whilst the quantity of the item is an implied term as it can’t be negotiated.

Consumer Protection from unfair trading regulations 2008

The Consumer Protection from Unfair Trading Regulations 2008 prevents the use of unfair commercial practices. A commercial practice is deemed unfair if; it contravenes the requirements of professional diligence, is likely to materially distort the economic behaviour of the average consumer with regard to the product, is a misleading action and is aggressive.

For example if a supplier persuades a consumer into a contract aggressively or the consumer signs a contract without knowing what exactly the terms are then they can be protected by this statute for unfair trading.

This statute affects contractual terms because they have to make everything clear and the contract must be agreed by both parties. The unfair trading act is an expressed term as unfair trading has to be argued by one of the parties, mainly the consumer.

Unfair contract terms act 1977

Unfair Contract Terms Act 1977 was built to stop the unfair contracts being formed and to protect users who are signed to an unfair contract. Unfair terms include; contractual term which has not been individually negotiated, in this case the individual that claims it was not negotiated together must prove that it was.

An example of an unfair contract would be when a supplier creates a term that the consumer is unaware of and didn’t agree on, say an extra charge of £10 per month, the consumer would be protected under the unfair contract terms act 1977 and wouldn’t have to pay the extra charge.

This statute affects contractual terms because all of the terms expressed have to be agreed by both parties and they must be aware of what they are signing. Unfair contract terms are expressed as someone has to negotiate with the judge whether they are in an unfair contract or not.

Unit 21 Contract and Business Law P2