Essay: Issues of consumer law

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  • Issues of consumer law
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Removals firm:

Supply of Services

The legal relationship between the parties must be clear. The Consumer Rights Act 2015 (CRA) defines a consumer as “an individual acting for the purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”. As evident by the facts, there is a construction of a contract for supply of services between Sandeep as the consumer, and the Tiptoe Movers as the traders for the purpose of the CRA 2015.

Quality of service under statutory law

A supply of service must be of satisfactory quality under the CRA 2015 whereby standards of service performed by Tiptoe Movers must therefore legally satisfy. Section 49 of the CRA 2015 determines that the standard of services performed must conform to reasonable care and skill. The service performed must be completed in accordance to the information agreed upon with the consumer whereby the consumer relies on this information. Although strict liability can occur regarding price and time for a service, reasonable care and skill required cannot be excluded under the CRA 2015 and other limitations may be subject to a fairness-test. Such test may consider the extent to which then specific terms appear ‘transparent and prominent’. Since the CRA 2015 does not intend to challenge prices of a contract, “a fixed sum of no more than the total contract price” may appear relative but not necessarily unfair. Sandeep and Daniel will argue that the mentioned duty of care has not been followed through by the Tiptoe Movers nor did the task performed follow the instructions of the service, if assuming exchange of information took place pre-contract (Sandeep’s telephone conversation), or as stated in the contract. The lack of reasonable care and skill is supported by the fact that the Tiptoe Movers arrived hours later then agreed on and the service was also not fully complete by the fact of not placing all the belongings where it was decided.

Validity of exemption clause

The purpose of exemption clauses in contract is to remove any liability in case of breach of the contract or to limit damages available to claim. The location of the clause is important since a consumer shall have knowledge of the clause, thus reasonable steps may need to be taken to make aware of the clause. In certain cases, excluding liability may require a greater degree of notice to be given. In order for the Tiptoe Movers to use the exemption clause as a defence (partial at least), it must be incorporated in the contract, express what it covers and not be contrary to any law. In Sandeep’s case, it is provided in the scenario that Sandeep did sign a contract where the clause was located but was not aware of the clause. The incorporation of an exemption clause did take effect because of signing it, unless it was induced as way of misrepresentation. Regardless of whether Sandeep read it or not the clause was present at the time, thus discoverable. The main issue is to consider whether this exemption clause covers the situation that occurred.

Fairness Test

The test for fairness is originally under the Unfair Contract Terms Act 1977, but also implied in the current CRA 2015. The test denotes that term in a contract may deem as unfair if causing unfair barging between the parties. The time when the term was agreed on must be taken into account, as well as any other terms the contract depends on and purpose of the contract. In response to this, one of the facts to consider is that Sandeep may not have equal bargaining power to the Tiptoe Movers. At common law, the exception clause must be clear but Sandeep did not know about it, so was it obvious enough? The exemption clause intends to exclude ‘loss, howsoever arising’ that may not be found appropriate to the task of moving others’ belongings. Whilst the exemption clause does not specifically mention negligence, it may amount to an attempt to unreasonably exclude liability. The clause is not entirely withdrawn from responsibility since it does express a recovery price based on the cost of the contract. If one does have valuable possessions, it would depend on the consumer to increase the amount in case of practical concerns.

Duty of care (negligence)

In some circumstances, causing the failure to satisfy the standards of quality or fitness, exemption clauses of liability are not admissible. The type of injury to the belongings should be examined under negligence under section 65(4) and 63 of CRA 2015 weather the term would satisfy the test of reasonableness. At common law, the general test requires reply to as whether the injury in question was ‘reasonably foreseeable’; was sufficient proximity between parties and it would be ‘fair, just and reasonable’ to enforce liability on the responding party. A qualified duty of reasonable care maintains when having possession of one’s property for some purpose. In Sandeep’s and Daniel’s case, the belongings appear destroyed as a result of the Tiptoe Movers’s failure to exercise the required reasonable care as the firm was in a rush and was dropping boxes.

Damages

The award of damages is to put the claimants into the position they ‘would have been in had the contract been performed’. If the clause considers not unreasonable and unfair, then Sandeep and Daniel can go as far as bring a claim for negligence against the Tiptoe Movers. However, the ‘reasonableness test’ in case of negligence is determined by also the objective test in court.

Bookshelves

Supply of services

There is construction of a consumer contract between Sandeep and Martin as evident by the payment in exchange to install bookshelves. Duty of care arises concerning the bookshelves to be properly installed by Martin. Alternatively, product liability for the manufacture or place of purchase should also be examined.

Quality of service under statutory law

Section 49 of the CRA 2015 requires a service performed to satisfy the standard of reasonable care and skill. Similar requirements as for goods will apply. Instructions or information about the instalment of the bookshelves ought to have been agreed upon prior to the contract and the information conveyed must on be relied on. However, due insufficient facts about the parties’ contractual terms, certainty concerning quality of service will be approached as relative.

Duty of care (negligence)

The bookshelves fall on Daniel and causing personal injury to him raises a question of negligence. The reasonableness test may be reviewed as above. One issue to reconsider within the test is whether Sandeep and Martin have equal bargaining power on the matter at hand. Here, Sandeep gives Martin direction on how the bookshelves are to be placed, to which Martin does not object.There is evidence of sufficient proximity between the parties but regarding an injury to be reasonably foreseeable is uncertain though Martin is a carpenter, from whom one may expect to rely on for his expertise and knowledge for what is appropriate for the task.

Product liability

It may be worth to examine the condition of the shelves intended for private use. The Consumer Protection Act 1987 (CPA) forces a strict liability for defective products acquired whether from a producer or the manufacturer. A consumer may bring a claim against the manufacturer for defective goods based on the duty of care. Just as with sale of goods, a product must not be found ‘unfit for purpose’ or of ‘unsatisfactory quality’ regardless if there is any fault on the consumer’s part. Accordingly, safety and appropriateness of the product implies as terms into the consumer contract. Section 2(1) of the CPA 1987 damage is established where “any damage” occurred due to the product. The scenario is not certain but in any case, Sandeep would then establish the balance of probabilities; namely, the defective product (shelves) wholly or partly caused the injuries Daniel. It can be taken into consideration whether Sandeep insisted using the shelves in such a way that was not fit for the exact purpose (without visible brackets and the way it is incorporated), tracing back to goods of sale-scenario (see below, section C)

Other liability and Damages

Under the Consumer Protection Act, selling defective goods can be a criminal offence. With exception of section 49, strict contractual liability may arise in regards to the satisfactory quality and fit for purpose. In White v. John Warwick & Co. [1953] 2 All ER 1021, the item in question was deemed as unfit for the purpose for which it failed to be safe as well. There may be a concurrent liability here as well. Damages can be available and Daniel may recover compensation for any personal injury.

Sofas

Sale of goods

In this scenario, the facts indicate a consumer contract between Daniel and “We Love Sofas” undertaken by credit payment.

Quality of goods under statutory law

Section 9 of the CRA 2015 deals with the quality of supply of goods, providing that all supplied goods under consumer contracts must meet a certain standard of satisfactory quality. By quality, it refers to the condition and the state of the goods, the appearance and finish and the appropriate and fitness for the purpose. The section also covers goods to be installed correctly if such is part of a contract. In case where the consumer makes it aware to the seller of the particular purpose they are contracting for the goods will identify under ‘the fitness for particular purpose of goods but the consumer contract also implies term that the goods are reasonably fit for a purpose. The law requires therefore the goods to be as described and the contract must be treated as including such term of description.

At common law and by the previous legislation under the Sales of Goods Act 1979, it is expressed that the goods must be ‘reasonably fit’, which similar in relation to the current standard of ‘fitness’. Not all goods can assume the same fitness quality, such as the second-hand goods cannot expect to have the same quality as new products. The consumer may rely on the implied description of the goods even if there is no actual description of the product. The CRA 2015 includes that goods also ought to match the sample (or model) as well. If a contract to supply of goods refers to a sample, the contract implies the description of the sample. However, this is only to the extent of where the consumer has examined the product in question pre-contract and is made aware of any differences and defects that would be apparent upon a reasonable examination of the sample. Consequently, section 9 (4) of CRA 2015 provides that the section does not cover ‘anything making the goods unsatisfactory’ that the consumer is aware of pre-contract and where the consumer having ‘examined the goods pre-contract and which the examination ought to have revealed’.

Terms and statements

At common law, “We Love Sofas” could argue that the term is not substantial to the product, and even reduced in price for being a sample only imitating the ‘real leather sofa’ or they were not wholly or fully aware of the sofa’s true condition. The case law argues the description ought to amount to “substantial ingredient of the identity” that relied on by the consumer. In such way, does the word “leather” amount to a term of the contract or representation? A simple verbal declaration by a seller can be relied upon a term of the contract. Regardless if “We Love Sofas” has an obligation not to state facts that they have no “reasonable ground to consider”, they can be liable even if the description would be included by the manufacturer. The terms used to describe the sofa would most likely fail the test for fairness. In this scenario, the sofa that Daniel purchased is not as described nor is in the condition he expected.

Nevertheless, the satisfactory quality is according to the standard of a reasonable person and may include relying on public statements made about the product. Daniel purchased the sofa, which implied by purpose of use and relied on the seller to have supplied it fit for that purpose. Whilst Daniel was told the sofa was in “slight” condition of wear and tear, it does not imply that the fabric will peel off as soon as three months later. As for the description of the sofa, it fails to satisfy the description by which it is sold and not to mention, Daniel relied on the description of the sofa as a sample/model. Upon examination of the sofa, was Daniel able to discover all the above issues with it?

Misrepresentation

The matter may refer to a legal misrepresentation, which can be defined as a false statement of fact made pre-contract designed to induce a formation of a contract. Although one is not required to confirm a statement made, there is no misrepresentation where the consumer relies on own judgement or statements of opinion made. Generally, it will consider by whom the statement is made; such an expert or whether it portrays a statement of fact. The aim of the misrepresentation must somehow mislead the individual. In regards to liability for misrepresentation, the CRA 2015 refers to the fairness-test that can be used to assess to what extent a term is clear and delivered with “good faith”.

For the sake of argument, it may suggest “We Love Sofas” acted in good faith and unaware of the leather being fake underneath. Therefore, they had no intention to induce a customer to purchase a sofa under false pretence, thus no fraudulent misrepresentation. Then by reasonableness test, it would address if the duty of care satisfies the standards of reasonableness and fairness, which likely does not. While there are three kinds of misrepresentation, Daniel’s case would likely concern a fraudulent misrepresentation. According to the test set out in Derry v. Peek [1889] UKHL 1 the respondent knows the statement is false or does not believe in the statement, or alternatively is reckless about it. Given the reason for the purchase of the sofa in Daniel’s case, it is made obvious by the facts that he purchased the sofa based on the statements describing the sofa.

Damages and Consumer Credit Act
General circumstance of damages may apply. Should a consumer not be compensated, given replacement, and not have returned the goods, the credit provider may be liable in certain situations when issues regard goods and services paid by credit, as Daniel had done. The Consumer Credit Act 2006 may cover instances where e.g. significant information was not provided to consumer before entering the credit agreement and for purchases exceeding a certain amounts. A claim against the creditor may also include where a consumer takes legal action for breach of contract or misrepresentation against the concerning supplier.

Word count: 2499

BIBLIOGRAPHY

Legislation
Consumer Credit Act 2006
Consumer Protection Act 1987
Consumer Rights Act 2015
Sales of Goods Act 1979
Unfair Contract Terms Act 1977

Cases
Andrews Bros v. Singer & Co. Ltd [1943] 1KB 17
Arcos v. Ronson [1933] AC 470
Atwood v. Small [1838] UKHL J60
Beale v. Taylor [1967] 3 All ER 253
Birch v. Paramount Estates [1956] 167 EG
Bisset v. Wilkinson [1927] AC 177
Caparo v. Dickman [1990] UKHL 2
Canada Steamship Lines v. R [1952] UKPC 1
Clegg v. Andersson [2003] EWCA Civ 320
Commerical Banking v. RH Brown [1972] HCA 24
Curtis v. Chemical Cleaning and Dyeing [1951] 1 KB 805
Derry v. Peek [1889] UKHL 1
Donoghue v. Stevenson [1932] UKHL 100
Esso Petroleum v. Commissioners of Customs & Excise [1976] 1 WRL 1
Godley v. Perry [1960] 1 WLR
Gran Gelato v. Richcliff [1992] Ch 560
Horsfall v. Thomas (1862) 1 H&C 90
Harlingdon and Leinster Enterprises v. Christopher Hull Fine Art [1991] 1 QB 564
Howard Marine and Dredging Co Ltd v A Ogden and Sons [1978] QB 574
IBA Health v. Office of Fair Trading [2004] EWCA Civ 142
Interfoto Picture Library v. Stiletto Visual Programmes [1989] QB 433
Inntrepreneur Pub v. East Crown [2000] 2 Lloyd’s Rep 611
Jewson v. Boyhan [2003] EWCA Civ 1030
L’Estrange v. Graucob [1934] 2 KB 394
McInerny v. Lloyd’s Bank Ltd [1974] 1 Lloyd’s Rep 246
Olley v. Marlborough Court Hotel [1949] 1 KB 532
Oscar Chess v. Williams [1957] 1 All ER 235
Overseas Medical Supplies Ltd v. Orient Transport Services [1999] CLC 1243
Parker v. South Eastern Railways Company (1877) 2 CPD 416
Photo Production Ltd v. Securicor Transport [1980] AC 827
Reardon Smith Line v. Hansen-Tangen [1976] 1 WLR 989
Redgrave v. Hurd (1881) 20 ChD 1
Smith v. Eric S Bush [1990] 1 AC 831
Smith v. Chadwick (1884) 9 App Cas 1187
Spurling v. Bradshaw [1956] 1 WLR 461
Thornton v. Shoe Lane Parking [1971] 2 QB 163
Ward v. MGM Marine Ltd [2012] EWHC 4093
White v. John Warwick & Co. [1953] 2 All ER 1021

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