Problem Question Right to Cancel PDF

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Remedies under the Consumer Rights Act 2015...

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Problem Question – Sales Techniques and Cancellation Rights Consumer & Trader Definition – REG 4 of Consumer Contracts Regulation (CCI) Consumer - An individual - purposes which are wholly or mainly outside that individual’s trade, business, craft or profession Trader - Person - Purposes relating to that person’s trade, business, craft, or profession - Whether acting personally or through another (…)

Scenarios: (outdated decision but similar scenarios with problem question)

Current Test: Gruber case Farmer who bought tiles from Germany for his farm where the farm buildings, were used for farming and as his private quarters. However, roof tiles were discoloured, and he had to endure more costs due to painting them all the same colour. CJEU had to determine whether he could sue in his home state as a consumer or in Germany as a trader. Held: Gruber is a trader Legal principle: In order to be a consumer, the professional purpose must be so limited to be negligible in the overall context of the supply. Davies v Sumner Sale of a car used by a doctor for personal as well as business needs; it was held that he was a consumer because it did not have the necessary regularity to allow criminal sanction to be imposed; HOWEVER, if Gruber case was applied, he would have been a trader Blakemore v Bellamy Postal worker who often repaired and restored cars was not considered to be acting in the course of business as the work was carried out as a hobby;

Online – Trader - The individual who decides to start actively buying (used/) goods with a view to reselling them -

Same scenario in a virtual world such as Second Life, with a necessary distinction between players creating digital goods for their own use in the game, who later sell them on and players who create content on a larger scale to sell it to fellow virtual users.

Online – Consumer - Simply uses the Internet to offer for sale a few unwanted items - Empty the contents of lost and garage

Stevenson v Rogers Fisherman selling his boat in order to replace it was considered to be acting in the course of business

On-Premise or Off-Premise or Distance Selling – REG 5 On-Premise - Contract between trader and a consumer which is neither a distance contract nor an off-premises contract. Off- Premise - Contract concluded in the simultaneous physical presence of either trader/seller/both in place which is not the business premises of the trader Distance Selling – REG 5 Contract concluded between trader and a consumer - under an organised distance sales or serviceprovision scheme - without the simultaneous physical presence of the trader and the consumer - with the exclusive use of one or more means of distance communication - up to and including the time at which the contract is concluded o NOTE: Consumer visits shop before ordering online = not Distance Sales as not exclusive use of one or more means of distance communication  HOWEVER, this has not been tested in court before o Recital 20 Directive on Consumer Rights o Visit to premises to father info = distance sales o Appointment to hairdresser online = contract negotiated face-to-face BUT concluded online

Substantive Information Requirement – Precontractual REG 13 - Information to be provided before the making of a distance contract o Schedule 2 Different Types of information including basic information, right to cancel, redress mechanism, price calculations, payment, modalities

Organised Scheme Test (OFT Guidance) (4) Test: set up to take orders at a distance and do so with a degree of regularity a. Standard procedure are used to process orders b. Standard form contracts are used c. Standard correspondence is sent out d. The business routinely sells at a distance Excepted contracts Regulation 6 CCI 2013 (5) Those contracts are not subject to the rules contained in CCI 2013  outside scope (6) Note also Regulation 7 for some excepted contract from the information requirement

NOTE:Schedule (v) and (w) In relation to the supply of digital content, the supplier must now provide information relating

REG 14 - Additional requirement for contracts by electronic means

to the functionality of the digital content and any applicable protection or security measures attached to the content.

 obligation to pay: -

Trader must make consumer aware of o Main characteristics o Total Price o Additional delivery charges and any other costs o Duration o Minimum duration

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information be in a clear and prominent manner

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Directly before consumer places the order

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Trader must ensure consumer acknowledges the obligation to pay& Button clicked must carry unambiguous formulation. If not, Consumer NOT BOUND BY CONTRACT

REG 15 - Additional requirement for Contracts by telephone

Interaction with Electronic Commerce Information Requirements - Electronic Commerce (EC Directive) Regulations 2002 o CCI remains silent on this issue o Directive on Consumer Rights explains ECD remains applicable and if clashes DCR prevails - NEW RULES – See Schedule 2(c) o ‘ The geographical address (…), and, where available, the trader’s telephone number, fax number and email address, to enable the consumer to contact the trader quickly and communicate efficiently;’

See: Bundesverband v Deutsche Internet Versicherung AG [2008] car insurance company offering its services exclusively online, provided a postal address, an email address and an online enquiry template as means of communication. The German Federation of Consumer Associations brought an action claiming that in

Formal Information Requirements REG 8 - Information needs to be made available to the consumer (i.e. he/she reasonably knows how to access it) REG 16 - Confirmation of distance contracts on a durable medium - confirmation must include all information referred to Schedule 2 - unless already provided by another durable medium prior to entry of contract - must be provided within a reasonable time o Goods =no later than the time of delivery o Service = before performance

order to satisfy the requirements of the ECD, a telephone number needed to be given to consumers prior to the conclusion of a contract. This was because only the telephone could guarantee direct communication between the parties. Held: online enquiry template is a mean of direct communication and therefore telephone number is not needed.

Note: durable medium definition is in REG 5

REG 17 - Burden of Proof on the Trader REG 13(2) - durable medium must be legible (i.e. small print, whether clear English)

Right to Cancel Limitations - REG 27(2) o Cancellation provision excluded for supply of prescribed medicinal product/ health care services - REG 6 o Limits of application: general - REG 28 o Circumstances excluding cancellation

REG 29 – Right to cancel - Right to cancel at any time during cancellation period, without giving any reasons, and without incurring any liability

Content Services LTD v Bundesarbeitskammer Branch provides software downloads on its website in Germany and Austria. To access the software, consumers had to fill in a registration form, place an order and subsequently receive a confirmation email. Email contained hyperlink to terms and conditions. Held: hyperlink is not meet the requirement of durable medium; information must be given by the undertaking and received by the consumer

REG 30 – Cancellation period - Service contracts and digital content supplied on tangible medium contract = 14 days - Goods = 14 days from day after they came into physical possession of the consumer (or designated representative’) o Multple lots – from delivery of last piece o Regular delivery of goods – from delivery of first piece REG 31 - Extended for breach of information requirement - But limited to 1 year REG 32 – Exercise of the right to withdraw or cancel Trader - All trader must provide cancellation form - Must be available prior to entry of contract - Trader must confirm cancellation by email or other durable mediums Consumer - Are not obliged to use the cancellation form; - If the consumer chooses not to use the model form, any clear statement setting out decision to cancel contract is deemed sufficient  Cancellation effective when sent

Effect of withdrawal or cancellation - End of obligation under contract -

REG 33 – If contract is cancelled under REG 29(1) REG 34 to 38 apply (reimbursements and return of goods)

Derives from case law: Pia Messner v Firma Stefan Krüger Messner bought laptop on the Internet; 8 months after purchase, laptop had a defect and

REG 34 – Reimbursement by trader in the event of withdrawal or cancellation

(1) Trader must reimburse all payment other than delivery (2) EXCEPT if delivery costing more than the least expensive common and generally accepted kind of delivery offered by trader. (4) Reimbursement must be without undue delay (5) If it is a sales contract and trader has not offered to collect goods, time of refun ends 14 days after (a) The day on which trader receives goods (b) If earlier, the day on which consumer shows proof of postage. HENCE, Trader is allowed to withhold refund until returned goods are received or there is proof of postage (6) OTHERWISE, end of 14 days after the day on which the trader is informed of the consumer’s wish to cancel. (7) reimbursement in the same means of consumer’s payment (8) trader may not impose additional fees (9) may deduct amount from reimbursement for excessive use of goods (10)However, para 9 does not apply when trader did not inform about the right to cancel REG 35 – Return of goods in the event of cancellation -

Consumer is required to return goods within 14 calendar days of cancelling contract

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Obligation is only to send off goods; consumer is not obliged to make sure trader receives returned goods

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Consumer must bear the delivery costs unless trader has agreed to bear costs or he failed to provide consumer with information of delivery costs.

seller refused to repair it. Messner then tried to claim refund in exchange for return of the goods whereby seller asked for compensation for the value of the use of the goods delivered. CJEU held that Distance Selling Directive aimed to give consumers the chance to inspect goods that they had not seen and charging them for using goods they returned under the Directive would deter them from making use of their rights under it. However, the ECJ said that if the consumer's use offended principles such as good faith or caused unjust enrichment, a supplier might be able to charge the consumer.

REG 36 – Supply of service in cancellation period -

Trader must not begin the supply of service before the end of the cancellation period

REG 37 – Supply of digital content in cancellation period -

Supplier must not supply digital content within the 14 day cancellation period, unless the consumer has given express consent to his happening

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Supplier is obliged to refund the customer 14 days after receipt of the consumer’s decision to cancel; the contract

Schedule 3 – Model cancellation form

Delivery & Passing of Risks REG 42 – Time for delivery of goods (2) implied term that the trader must deliver the goods to the consumer (3) Timing if not specifically agreed = 30 days (6) if trader has refused to deliver goods; delivery of the goods at the agreed time or within the agreed period is essential to entry of contract; consumer told trader before contract that agreed time was essential = then the consumer may treat the contract as at an end

REG 43 – Passing of risk - provision implies terms into contract o goods remain at the trader’s risk until they come into physical possession of consumer of person identified by the consumer to take possession of the goods o passing of risk with delivery by carrier which consumer picked or a carrier the trader did not name as option for the consumer.

Hence, carrier’s fault has not passed risk off from the trader

Off-Premises – REG 5 REG 5 Off-Premise is a place other than trader’s business premise, which is immovable retail premise(permanent basis), or any moveable retail premise (usual basis) Excepted contract - REG 6 and REG 7 Substantive Information Requirements REG 10 – Information to be provided before the making of an off-premise contract -

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Schedule 2 o Different Types of information including basic information, right to cancel, redress mechanism, price calculations, payment, modalities o Durable medium must be legible Schedule 3 o Provide information on the right to cancel REG 10(5) – digital content o Information implied as term of contract o Change of info made before contract or later is not effective unless agreed with consumer

REG 11 – info requirement for repair maintenance contract -

some exceptions to Reg 10 requirements is service contract requested by consumer to be performed immediately and costs no more than £170 – but some other requirements applicable

Case law on absence of provision of notice o Robertson v Swift Entered into contract with removal company to move his furniture to new home. Company visited appellant’s home to agree a price and on the same day contract was given to R to sign which were then given to Swift on second visit; HOWEVER, contract contained clause that would charge him fees when he would cancel the contract less than 10 days before the removal date; R then called to cancel and sent

REG 12 – Copy of confirmation of off-premise contracts - trader must give signed contract and confirmation to consumer o confirmation must include all information referred to Schedule 2 o unless already provided by another durable medium prior to entry of contract o must be provided within a reasonable time  Goods =no later than the time of delivery  Service = before performance

letter of notice to cancel. R refused to pay cancellation fees and asked for deposit which Swift refused to give. Supreme Court held that R was within his right to cancel the contract. Seller must give consumer, at the point the contract is concluded, written notice of their right to cancel.

Legal Principle: the period commencing from when the trader is required to give the Formal Information Requirements consumer a written notice of his right to cancel pursuant to regulation 7(2) and expiring 7 days REG 8 – making information available after receipt by the consumer of a notice of the REG 12 – Copy of confirmation of off-premise contracts right to cancel’. - On a durable medium REG 17 – Burden of proof on Trader REG 18 – Breach of contract if does not supply the required information REG 19 – BUT Offence not to give notice of right to cancel in certain circumstances - If he fails to give info listed in para (l), (m) or (n) under Schedule 2 Right to Cancel Limitation - Reg 27(2) - Reg 6 - Reg 28 Scope – REG 27(3) Contracts below £42 are not within scope -

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REG 29 o Right to cancel at any time during cancellation period, without giving any reasons and without incurring any liability REG 30 o Service contract = 14 days after day contract concluded o Goods = 14 days from day after they came into physical possession of the consumer (or designated representative’) REG 31

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extended to 1 year for breach of information requirement

REG 32

Effects of cancellation -

Reg 35 o Trader to collect the goods

Delivery & Passing of Risks -

Same as distance selling PART 5 of CCI o REG 42 o REG 43

See: Friz GmbH v Carsten von der Heyden Limited the level of consumer protection on doorstep selling in the event that a consumer withdraws from a contract, admittedly in an atypical set of circumstances Eva Martin Martin v EDP Editores SL Purchased books, DVDs and DVD player at home from a EDP representative; refused to pay; EDP brought claim against her and she appealed Held: she was not properly informed of her right to cancel contract and therefor contract was void

Hamilton v Volksbank Filder eG Signed a contract at her home for a loan with a bank whose rights were acquired by Volksbank; clause stating that once received the loan cancellatin shall be deemed not ot hav etaken place unless he repays the loan either within two weeks of giving notive of cancellation or within two weeks of the paying out of the loan; wanted to cancel and therefore repaid loan; brought action to reimburse paid interest and loan. Held: when trader gave defective notice of cancellation rights  time of cancellation notice goes up to one month Lodewijk Gysbrechts v Santurel Inter BVBA The right of withdrawal, ban on payment before withdrawal period expired...