Consumer Rights Act 2015:
Protection:
Consumers against businesses or traders.
s2(3) – Consumer defined as individual working in any capacity wholly or mainly outside of their trade, business, craft or profession.
s2(2) – Trader defined as a person acting for purposes relating to their trade, business, craft or profession.
Terms Covered:
Any term, except ‘core terms’ that define the main subject matter of the contract.
s61 – Trader to consumer contract.
s64 – (Un)fairness test does not cover terms that are:
s64(1)(a) – the main subject matter of the contract.
s64(1)(b) – related to the assessment of price / whether it is appropriate.
s64(2) – prominent and transparent.
s64(3) – Transparent defined as legible and expressed in plain and intelligible language.
s64(4) – Prominent defined as ‘brought to the customers attention in such a way that an average customer would be aware of the term.’ ‘Average customer means a customer who is reasonably well-informed, observant and circumspect.’
In OFT v Abbey National (before 2015, but still applicable), it was questioned whether an overdraft charge was part of the ‘price’ of having a current account. The court decided that the situation could not be assessed under the fairness test as it was part of the price.
Philips LJ: The overdraft ‘part of a package of different ways of charging for a package of varied services’.
Test:
Automatically Invalid:
s65 - Negligence causing death or personal injury.
Unfairness Test:
See terms in Schedule 2 (usually unfair terms).
s62 – Unfair defined.
s62(4) – Significant imbalance of party’s rights and obligations.
s71 - It is the duty of the court to consider and apply fairness test, even if neither party brings it up.
Where a term is held unfair, that term is no longer binding to the consumer. This does not impact the other terms of the contract. [1]
In Beavis v ParkingEye, B was charged a parking charge for staying past the maximum time. The Supreme Court majority held that the charge was not unfair as a ‘reasonable motorist’ would have agreed to the term; reasonable amount in comparison to other parking providers.
Lord Toulson JSC dissented, stating that it would not have been agreed to if there was room for negotiation; the charge was greater than the damages.
Gone too Far, or not Enough?
The CRA2015 is a single, simpler regime for consumers.
More accessible language and structure.
New requirements, so more protections.
Some recommendations from the Law Commission were not implemented (small business protection and burden of proof on consumer).
Confusion between when the UCTA1977 and CRA2015 can be applied.
References:
[1] Ewan McKendrick, Contract Law (14th edn, April 2021, Macmillan Education UK) 369
Cases Mentioned:
OFT v Abbey National [2009] UKSC 6
Beavis v ParkingEye [2015] UKSC 67
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