Regulatory requirements for consumer contracts

Regulatory requirements for consumer contracts

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (referred to here as the 'Consumer Contracts regulations') apply to all contracts for the supply of goods, services or digital content to consumers.

Businesses selling to consumers have to comply with the requirements of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015, as amended by the Consumer Protection (Amendment etc.) (EU Exit) Regulations 2018 (The 'ADR Regulations'). Alternative Dispute Resolution ('ADR') is a means of resolving disputes other than by court proceedings. In a mediation, an independent person gives both sides the opportunity to state their position and tries to help them to find a solution. Adjudication or arbitration involves an independent person hearing both sides of the dispute and making a decision to resolve it.

The ADR Regulations apply to all businesses that provide goods, services or digital content to consumers, except health professionals. They require the trader to provide certain information to the consumer if it is compulsory for the trader to use ADR under

  • legislation that applies to that trade sector
  • the rules of a trade association the trader belongs to, or
  • the terms of the contract.

The trader must then tell the consumer the name and web address of the certified ADR body that they have to submit the dispute to. They should provide this information on their website and in the general terms and conditions of their contracts to supply the goods or services.

Where the trader doesn't have an obligation to use ADR, but hasn't been able to resolve a consumer dispute using their own internal complaints procedure, they must give the consumer the details of the certified ADR provider in that sector. They must also tell the consumer whether they intend to use ADR to resolve the dispute. They should provide this information in a letter, email or other durable medium. A durable medium is a medium that allows communication to be addressed personally to the consumer and which the consumer can store and reproduce e.g. by downloading and saving or printing it.

Where a trader and consumer are undergoing ADR through an approved ADR provider, the time limits on the consumer to take legal action over the dispute are extended.

Key terms in the Consumer Contracts regulations

The requirements depend on the contract type. There are 3 types of contract under the Consumer Contracts regulations: 'distance contracts', 'off-premises contracts' or 'on-premises contracts'.

Distance contracts

'Distance contracts' (also called 'distance selling') are contracts where consumers buy goods or services from businesses without any face-to-face contact. They include sales made via:

  • The internet
  • Television
  • Phone or fax
  • Mail order, including catalogue shopping.

Off-premises contracts

Off-premises contracts (previously called 'doorstep selling' contracts) are contracts between a seller and a consumer where they're face to face in a place other than the seller's business premises when the:

  • Contract is concluded, or
  • Consumer makes an offer, or
  • Consumer is addressed by the seller.

On-premises contracts

On-premises contracts are contracts between a seller and consumer that are not distance contracts or off-premises contracts.

Durable medium

Under the Consumer Contracts regulations, a durable medium means one that allows information to be addressed personally to the consumer and allows the consumer to store and access it for future reference in an unchanged form. Examples of a durable medium are paper, email, text message, and a personal account, such as online accounts used by utility companies for billing.

Exemptions from the Consumer Contracts regulations

There are a number of exemptions from some or all of the provisions of the Consumer Contracts regulations that apply to on-premises, off-premises and distance contracts. Certain types of contracts are totally exempt from the regulations, and other types of contracts are partially exempt, i.e. they may not give a right to cancel but you must still provide the pre-contract information set out in the regulations.

Contracts wholly exempt from the Consumer Contracts regulations

The regulations don't apply to contracts:

  • For gambling
  • For the sale or transfer of land
  • Made through public payphones
  • For the supply of financial services
  • Made when buying from vending machines
  • For package holidays that are package travel contracts under the Package Travel and Linked Travel Arrangements Regulations 2018
  • For the supply of food, drink or other goods meant for consuming in a household. These apply to goods supplied by a regular delivery round, like milk, but not groceries bought online.

Contracts exempt from pre-contract information and cancellation rights

Some contracts are only partially covered by the Consumer Contracts regulations. These contracts aren't subject to the requirements to provide the pre-contract information. The cancellation rights in the regulations don't apply to them either.

They are contracts:

  • For passenger transport services
  • For the supply of prescription medication
  • That are off-premises contracts where the consumer is paying £42 or less
  • For the supply of products by healthcare professionals as part of a health service.

Contracts exempt from cancellation rights

There is a further list of contracts that must comply with the pre-contract information requirements, but in which the consumer doesn't have cancellation rights.

Cancellation rights don't apply to on-premises contracts.

Cancellation rights don't apply to off-premises and distance contracts for:

  • Goods likely to deteriorate quickly
  • Newspapers or magazines (except for subscriptions)
  • Customised goods made for the consumer
  • Items concluded at a public auction that consumers can attend in person (but not online auctions like eBay)
  • Urgent repairs or maintenance where the consumer has specifically requested a visit from the trader
  • Accommodation, transport of goods, vehicle rentals, catering or leisure services, where the contract has a specific date or period of performance
  • Alcoholic drinks for which the price has been agreed but delivery can only take place after 30 days and where the price fluctuates in the market
  • Goods and services, the price of which fluctuates in the financial markets, as long as the services aren't for water, gas, electricity or district heating.

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