Rules governing contracts between traders and consumers including the information that consumers must receive before a sale and cooling off periods
Consumer law affects most businesses in Northern Ireland. If you supply goods or services to consumers, your business should be aware of the regulations. Every time you sell something you make a contract with the consumer.
The rules cover the information a consumer is entitled to receive before their purchase and their right to cancel a contract. There is a 14 day cooling-off period for consumers who bought goods or services online, by mail order, by telephone or away from your normal trading premises.
The rules also cover:
- the information you must give to customers before and after making a sale
- clear rights when consumers change their minds
- consumer contracts delivery and risk times and who is responsible during the delivery process
- consumer contracts additional charges no longer allowed to be a default option
- new rules on customer helplines charges
This guide helps you to understand consumer contract law and the rules on providing consumers with contract information. It explains types of consumer contracts and exemptions from consumer contract rules.
Types of consumer contract
Definitions of consumer contract types to allow traders to understand their obligations including distance, off premises, sales, service and digital contracts
Consumer contract rules vary depending on the type of contract. In today's competitive marketplaces, businesses may be involved in several types of transaction eg a trader selling goods from a high street shop and also from a website. Understanding the definitions of the contracts you make will help you to follow the correct rules.
Consumer contracts are divided into three main types:
- distance contracts - such as telephone, mail order and online sales, where the trader and consumer are not physically together - this refers to an organised means of distance selling, not just a one off
- off-premises contracts - contracts concluded away from business premises and where both trader and consumer are present eg when visiting someone's home
- on-premises contract - sales on your business premises, including a trader's permanent premises as well as temporary premises (such as a market stall) where you usually operate
The content of contracts is also divided into three main types:
- sales contracts - including contracts for the sale of goods and also for the supply of goods and services together eg a film on a DVD, supplying software on a disc, and the supply and fitting of a patio
- service contracts - contracts that are for services only eg the services of a personal trainer or lawyer - supply of gas and electricity by utility suppliers will also be covered by this definition, whereas gas and electricity will be classed as goods when sold in limited amounts eg batteries and gas in containers
- digital content - the supply of data eg music and software downloads or streamed films
Providing consumers with contract information
You need to provide certain information to a consumer before entering into a contract. This must be on a 'durable' medium, such as a letter, CD/DVD, email, text or by personal account on a website.
In general, the following pieces of information need to be provided:
- the main characteristics of the goods or services
- your identity including address and contact details
- the total price of the goods or services inclusive of taxes (or how the price is calculated)
- any additional delivery charges, or advice that charges may be payable
- any arrangements for payment, delivery, performance, and the time by which you will deliver the goods or perform the service
- details of any complaint handling policy
- in the case of a sales contract, a reminder that (as the trader) you are under a legal duty to supply goods under the contract
- the existence and the conditions of any after-sales services and commercial guarantees
- details of any duration of the contract, or conditions for terminating the contract if it will be automatically renewed
- details of functionality if you are supplying digital content
- compatibility details for digital content with hardware and software
These rules apply to on-premises sales. However, for low cost day-to-day transactions where the consumer is very familiar with the goods or service on-premises traders are exempt from many of the information requirements. For example - buying a newspaper, a cup of coffee or groceries. Information such as price and main characteristics must still be given.
Extra information needs to be provided before a contract is made with a consumer buying goods off-premises. This includes online, by mail order, by telephone or a similar distance sales. See off-premises consumer contracts.
Off-premises consumer contracts
You must provide consumers with certain information before entering a contract. See providing consumers with contract information for the information that must be provided for all transactions.
Additional information needs to be provided before a contract is made with a consumer buying goods off-premises, online, by mail order, by telephone or a similar distance sale:
- if you're acting on behalf of another trader, their address and name
- where the consumer can address any complaints (if different from addresses already provided)
- for an ongoing contract or subscription, the total costs per billing period, or the total monthly costs for fixed rate contracts
- any required communications costs above basic call rates - see consumer contracts additional charges
- where a right to cancel exists, the conditions, time limit and process for cancelling (if a right to cancel applies)
- the consumer will have to bear the cost of returning the goods in case of cancellation and, for distance contracts, the return costs if the goods cannot normally be returned by post (if this applies)
- if the consumer exercises the right to cancel after an express request to start the supply of a service within the cancellation period, they may be liable to pay you reasonable costs
- details of where there is no right to cancel, or how the consumer may lose the right to cancel
- the existence and the conditions of any after-sale customer assistance, after-sales services and commercial guarantees
- if you work under a code of conduct, and how to obtain a copy
- any minimum duration of the consumer's obligations under the contract
- any conditions of deposits or other financial guarantees to be paid or provided
- details of any out-of-court complaint and process for redress mechanisms and how the consumer can use it
Where a right to cancel exists, you must give the consumer the model cancellation form (this should be in format provided by the Consumer Contracts Regulations). It is a criminal offence to not provide the consumer with their cancellation rights (where they exist).
If you do not tell the consumer about delivery charges or costs of returning items before entering the contract - they are not liable to pay the charges.
If you are trading online, you need to make absolutely clear where there is an obligation for a consumer to pay. This can be through a clearly labelled 'pay now' button at the correct stage in the ordering process.
Right to cancel consumer contracts
The rights consumers have to cancel off-premises and distance contracts under the consumer contracts regulations within the 14 day cooling off period
Consumers who decide that they do not wish to proceed with an off-premises or distance contract have two main rights. They can:
- withdraw their offer if it has not been accepted by you - this is an open-ended right, which will end when the contract is made, after which they can move to their right to cancel if appropriate
- cancel a contract - within a specified period of time consumers have the right to pull out of a contract, providing the contract is not one where there is no right to cancel
For more information on the differences between on-premises, off-premises and distance contracts, see types of consumer contract.
Consumers who enter into (or offer to enter into) off-premises or distance contracts will have 14 calendar days in which to change their minds. They do not have to give you a reason for doing so. You must provide them with the cancellation form, but they do not have to use it as long as they make clear that they are cancelling.
The 14 days for cancellation starts the day after the consumer recieves the goods. In the case of service contracts, it starts when you enter into the contract with the consumer.
The consumer should generally return any goods within 14 days, unless you have offered to collect them. You should refund the consumer within 14 days of receiving the goods back or receiving proof they have been sent back. In the case of services, you should refund them within 14 days of the consumer informing you of the cancellation. This must be a full refund. You cannot charge a cancellation fee.
Collection of cancelled goods
Provided the consumer is aware before they commit to the contract that returns will be at their expense, you may charge for a collection service. However, the consumer doesn't have to pay for return if:
- the goods were left with them when you made the contract
- the goods can't be returned by post
In this case, they should make the goods available for collection instead.
For more information on responsibilities when goods are in delivery, see consumer contracts delivery and risk.
Limiting cancellation rights
If the consumer cancels after entering a contact, you may claim money for goods already used, or r services already delivered, so long as:
- before the contact, you made the consumer aware of they must pay for services or products used
- you had express consent to begin the services in the cancellation period
There are exemptions from the right to cancel consumer conttracts.
Exemptions from the right to cancel consumer contracts
Consumers who enter into (or offer to enter into) off-premises or distance contracts will normally have 14 calendar days in which to change their minds. However, a number of online and off-premises contracts do not have cancellation rights. These include:
- 'investment' type products such as vintage wines, where the price in the financial market may vary (utilities such as supply of gas are not covered by this exception)
- bespoke and customised goods
- goods which will deteriorate or expire rapidly
- newspapers and magazines (but not subscriptions)
- contracts concluded at public auction
- goods received sealed for health protection or hygiene reasons once unsealed
- sealed audio, video and software products once unsealed
- goods once they have been inseparably mixed after delivery
- contracts where the consumer has contacted the trader to effect urgent household repairs
- contracts for accommodation, transport of goods, vehicle rental, catering or services related to leisure activities, if the contract states a specific time period
- services which have been fully completed within the cancellation period (provided the consumer requested this and acknowledged that they would lose their right to cancel once fully completed)
- medicinal products or services that are either dispensed or are available free under an NHS appointment
- contracts for passenger transport services such as bus, rail or flight tickets
For more information on exemptions see exemptions from consumer contracts rules.
Consumer contracts delivery and risk
It is your responsibility as a trader to deliver goods that you have sold to a consumer, unless you have agreed otherwise.
Consumers can treat a contract as ended, and request a full refund, if:
- you refuse to deliver the goods
- you don't deliver within the agreed time and it's clear from circumstances, or from what the consumer tells you, that delivery by the agreed time was essential
- the consumer specified an appropriate delivery period, which you failed to meet
If you fail to deliver part of a contract of a variety of goods on time, a consumer can decide to cancel that part, or return the goods which have already been delivered. You must reimburse the consumer without delay for cancelled or returned goods.
Goods remain your responsibility until they have been delivered to the consumer. If your carrier fails to deliver the goods, or they deliver to the wrong address, you are responsible for them - not the consumer.
However, if the consumer agrees to use their own delivery carrier, you cease to be responsible once that carrier has received the goods.
Consumer contracts additional charges
Consumer contract rules are designed to protect consumers from paying for additional charges when buying goods or services.
No additional charges as default option
Your business might offer additional items linked to a main contract, such as:
- insurance with a contract for a holiday
- gift-wrapping when buying goods as a present
You should always ask consumers for their consent to such additional charges. You must not present these charges as the default option. For example, online consumers should not have to untick a box to remove an additional option which requires further payment.
Consumers do not have to pay for additional payments which they have not actively consented to. Consumers have the right to request a refund for any payments in this situation.
Telephone helpline charges
If you have a telephone helpline for consumers to contact you about a contract that they have entered into with you, you can't charge more than a basic call rate for this service.
This means you can only charge normal geographic or mobile call rates. If a consumer is charged more than the basic rate, they are entitled to claim any overcharge back from you.
You should check carefully with your telephone provider whether your phone line costs consumers more than basic rates.
Exemptions from consumer contracts rules
Types of consumer contracts which are exempted from the new consumer contracts regulations including gambling, construction, property and package travel
The new consumer contracts regulations do not cover all types of contracts which businesses make with consumers.
Contracts which are exempt from consumer contracts regulations include:
- gambling (as covered by the Gambling Act 2005)
- construction and sale of property (including building new properties)
- residential letting contracts
- package travel contracts
- timeshare contracts
- regular delivery supply eg milkmen
- purchases from vending machines
- single telecom connections eg payphones and café internet connection
- financial services (but not add-on services - see consumer contracts additional charges)
Some other types of contract are only partly covered by the consumer contracts regulations.
Passenger transport contracts are exempt from cancellation rights and from most of the information requirements. Items dispensed on prescription are exempt from the information and cancellation rules. For more information see providing consumers with contract information and right to cancel consumer contracts.
Low value off-premises contracts (a value of less than £42) are exempt from the information and cancellation rules, but are subject to those on additional payments and charges and delivery and risk. For more information see consumer contracts additional charges and consumer contracts delivery and risk.