Contracting With Consumers: What Businesses Should Consider

Implied terms

The Consumer Rights Act 2015 (CRA) implies certain terms in all consumer contracts depending on what is being supplied: goods, services, digital content or a combination of all three. 

• Goods - Where the contract is for the supply of goods, the CRA provides that the goods must be:
  • of satisfactory quality;
  • fit for purpose, and
  • match their description, any sample or model.
• Services - Where the contract is for the supply of services, the CRA provides that the services must be:
  • carried out with reasonable care and skill, and
  • be carried out for a reasonable price and within a reasonable time.
• Digital Content - Where the contract is for the supply of digital content, the CRA provides that the digital content must be:
  • satisfactory quality;
  • fit for purpose, and
  • as described.

The CRA provides consumers with different remedies should they receive defective goods, services or digital content. Some of such remedies include:

• Goods – Where a consumer receives defective goods, they have the right to:
  • reject the goods within 30 days and request a full refund;
  • a repair or replacement of the defective goods; and
  • a price reduction and a final right to reject the defective goods.
• Services – Where a consumer receives defective services, they have a right to:
  • require the service(s) to be repeated (at the supplier's cost);
  • a price reduction.
• Digital Content – Where a consumer receives defective digital content, they have the right to:
  • require repair or replacement of the defective digital content;
  • a price reduction (potentially up to the full cost of the defective digital content) where the repair or replacement is not possible or has not been provided within a reasonable time; 
  • in addition, where the defective digital content causes damage to a device or other digital content, the consumer has the right to:
    • a repair of the damage; and
    • payment of compensation.

In addition to the remedies set out above, a consumer may also be entitled to bring a claim for damages where the goods, services and digital content do not conform with the implied terms set out above or the consumer suffers a loss or damage due to the goods, services and digital content.

Where a business sells goods, services or digital content online, by phone, SMS or mail order (i.e. at a distance) or concludes the contract for the supply at a place other than its business premises, then additional rules and protections apply. 

The additional rules for distance selling include requiring a business to: 

• provide the consumer with the following:
  • a prescribed list of information;
  • a statutory cancellation period (or cooling-off period) of 14 days;
  • a model cancellation form where the consumer has a right to cancel;
• obtain the consumer's express consent before taking any additional payments, and
• deliver the goods within 30 days of purchase unless agreed otherwise.