The Consumer Rights Act 2015 Advice

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The Consumer Rights Act 2015 Advice

The Consumer Rights Act 2015 (herein referred to as the CRA) has reformed and consolidated the previous “unfair contract terms in consumer contracts” regulations accordingly the revocation and consolidation is outlined in Part 2 of the CRA which amends the Unfair Contract Terms Act 1977 and when considering issues in business to consumer [B-C] contracts.

The regulations further revoke the Unfair Terms in Consumer Contracts Regulations 1999.

 So, what’s covered?

Consumer Contracts (not employment or apprenticeship business to business or more importantly consumer to consumer); and a pre-contractual notice to the extent that it relates to the rights or obligations between a trader and a consumer or purports to exclude or limit a trader’s liability to a consumer.

The notice does not have to be in writing but is any communication or announcement as long as it is reasonable to assume it is intended to be seen or heard by a consumer.

The fact that notices are explicitly incorporated in the regulations, the written terms in the consumer contracts and notices must be transparent, in plain and intelligible language and legible (if expressed in text);

The scope of terms which may be assessed for fairness; and 3 new additions to the ‘grey list’ of terms which may be regarded as unfair (These are set out in Schedule 2 of the CRA).

General rules regarding express terms in a consumer contract or notice

must be transparent.

No exclusion or limitation for liability for death or

 personal injury arising from negligence will be valid.

Remedy

Where a clause is non-binding (because of being declared unfair) the rest of the contract will take effect as far as reasonable and practicable.

Where a term can have duplicitous meaning, the interpretation most favourable to the consumer will always prevail.

What are the general rules about (fairness of contract terms and notices)

The Contract terms and notices must be fair.

An unfair term or notice will not be binding on the consumer unless the consumer overtly chooses to be bound by it.

A term will be unfair if,

contrary to good faith requirements,

it causes a significant imbalance in the parties’ rights and obligations under the contract and to the detriment of the consumer.

A term of a consumer contract may not be assessed for fairness where it specifies the main subject matter of the contract or the assessment is of the appropriateness of the price payable, provided the term is transparent (in plain and intelligible language and legible where written) and prominent (brought to the consumer’s attention in such a way that the average consumer would be aware of it).

The terms which may be regarded as unfair

Schedule 2 of the CRA sets out an “indicative and non-exhaustive” list of terms in consumer contracts which may be regarded as unfair.

This includes three new ‘grey list’ terms:

  • disproportionately high charges where the consumer decides not to conclude or perform the contract or for services which have not been supplied, even where the consumer cancels the contract;
  •  terms allowing the trader to determine the characteristics or subject matter after the consumer is bound; and
  •  terms allowing the trader to determine the price after the consumer is bound.

A term of a consumer contract must be regarded as unfair if it has the effect that the consumer bears the burden of proof with respect to compliance by a distance supplier or an intermediary with an obligation under any enactment or rule implementing the Distance Marketing Directive (relating to the distance marketing of consumer financial services)