More information on the supply of goods

Rejecting faulty goods soon after buying them

If goods are found to be faulty or do not match the description the consumer was given when they were bought, a consumer can ‘reject’ them – by this we essentially mean returning the goods to the trader and getting your money back.

The consumer can only reject the goods within a ‘reasonable time’ after purchase (as explained below, there are currently differences if goods are supplied in other ways),  and provided he has neither indicated to the trader that he accepts the goods nor done something which shows he treated the goods as his own (eg altering the goods or trying to repair the goods himself). The consumer must have a ‘reasonable opportunity’ to examine the goods before losing the right to reject them.

What is a ‘reasonable time’ will depend on the circumstances and the complexity of the goods (a car, for example, will require longer to evaluate than a kitchen knife). In general, consumers have only a short time to reject goods.

The government is proposing to clarify the issue by establishing a normal period of 30 days for the right to reject substandard goods which are purchased, with two exceptions:

a) where the goods are perishable and would not be expected to last 30 days, (eg a sandwich)

b) where it might reasonably be understood by both parties that there might be a delay before using the goods, so that 30 days would not be sufficient for the consumer to inspect and try them out (eg a jumper bought in the run up to Christmas).

The government also proposes that the 30 day period should be suspended for the duration of any repair work or the delivery of a replacement.

The government is also proposing that consumers should have a minimum of 7 days to inspect the goods after a repair has been carried out (or the remainder of the suspended 30 day period, whichever is longer). The government is proposing this addition because it is keen that consumers should feel that repair is a valid option even within the first 30 days, rather than simply choosing rejection which would have a detrimental effect on traders and on the environment.

Without this addition, if a fault appeared on day 29 and was repaired, the consumer would only have a single day to inspect the goods before their option to reject the goods expired.

Repair or replacement after the 30 day period

If the goods are found to be faulty after the 30 day period has expired, then a consumer cannot insist on a refund but must give the trader the opportunity to repair or replace the goods. A consumer can choose between repair and replacement. However, a consumer cannot insist on one of these options if it is impossible or disproportionate compared to the other.

What happens if the repair or the replacement can’t be provided or keeps failing?

If the trader fails to provide a repair or replacement  within a ‘reasonable time’ or without ‘significant inconvenience’ to the consumer, then the consumer has other options. But some consumers may find it difficult to argue that the repair or replacement has not been provided according to these requirements, and may become trapped in a cycle of repairs or replacements.

The government proposes to strengthen consumers rights in this regard by placing a limit on the number of repairs or replacements a consumer must accept before having the right to a refund or reduction in price.

Refunds (with deduction) or price reduction (if you keep the goods)

If the trader fails to provide a repair or replacement within a ‘reasonable time’ or without ‘significant inconvenience’ to the consumer, or if both repair and replacement are impossible, a consumer may choose either to keep the goods but receive a reduction of an ‘appropriate amount’ from the purchase price; or to terminate their contract with the trader, returning the goods and receiving a refund.

If the consumer opts to return the goods and obtain a refund, the refund need not be the full purchase price paid, as the trader can make a deduction to take account of the use the consumer has had of the goods. The amount of the deduction, or the means of calculating it, is not fixed by law.

The government is considering several options for specifying the maximum deduction for use which traders may make.  In summary, the options under consideration are:

1. No deduction to be allowed (i.e. a full refund would be mandatory) for the first six months after purchase, then thresholds would apply for the minimum refund the consumer must receive – the minimum refund would gradually decrease every six months and end six years after purchase (five years in Scotland); as consumers’ legal rights to claim a refund expire after these periods.
2. No deduction to be allowed in the first three months, then thresholds would apply for the minimum refund required – but in this option, the thresholds would then decrease less regularly at two, four and six (five in Scotland) years after the purchase.
3. To apply one of the above schemes for decreasing thresholds (a or b), but also allow for exceptions where there is objective third-party evidence for the second-hand value of the goods in question.

The government is also considering options of making no changes to the current regime, and removing the right for traders to make deductions for use, as well as combinations of options (a) to (c).   

Different types of contracts

Not every form of supply of goods is covered by consumer laws. For the types of supply of goods which are covered, there are also differences in how the law protects consumers. The following are covered (these are forms of supply under a contract):

• Sale – goods exchanged for money (most standard retail transactions are sales)
• Conditional Sale – sale where the consumer pays in instalments and only obtains ownership of the goods when he makes the final payment, although he may use the goods in the meantime
• Barter or Exchange – goods exchanged for something other than money
• Work & Materials – goods supplied as an incidental part of a contract for work or services
• Hire Purchase – a hire contract with an option to buy the goods at the end of the hiring period
• Hire – a hire contract with no intention that the consumer will obtain ownership of the goods

It is not always obvious what type of contract has been entered into (for example conditional sale and hire purchase arrangements can appear very similar). This can have an impact on the consumer’s rights as these are not the same across the board.

Different types of rights

Depending on the type of contract, different consumer rights exist.

Rejecting faulty goods for a full refund	This is either a short term right (in the case of sale) where the fault must be identified within a ‘reasonable time’; or a long term right (in other contracts) where the goods can be rejected at any time within 6 years (5 in Scotland) once a fault is found, as long at the consumer has not acted to indicate that they accept it (for example, continuing to use it after the fault has developed). In either case, the consumer must prove that the fault was present at the time of delivery.
Repairs or replacements	For some types of contract the consumer has a right to a repair or replacement of the faulty goods. As below, this does not apply to hire or hire purchase.
Reduction in price or a refund	For some types of contract the consumer has a right to a reasonable reduction in the cost of faulty goods, or refund.Access to either of these outcomes is dependent on neither repair nor replacement being available within reasonable time or without significant inconvenience to the consumer.

  These different rights apply as follows:

Contract Type	Remedies Available (where goods are not of satisfactory quality, or do not correspond with description or sample, or are not fit for a known purpose )
	Right to Reject	Repair or replacement…	…followed by money off (if you keep the goods) or a (partial) refund
Sale	Short-term	Yes	Yes
Conditional Sale	Long-term	Yes	Yes
Barter or Exchange	Long-term	Yes	Yes
Work & Materials	Long-term	Yes	Yes
Hire Purchase	Long-term	No	No
Hire	Long-term	No	No

The government proposes to simplify the situation by applying the same consumer rights to all contract types. These rights would be based on the rights that apply to sale of goods as these are the most commonly used rights.