Warners Presenation Distance Selling


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Warners Presenation Distance Selling

  1. 1. WarnersSolicitorsMichael McNally29 October 2012
  2. 2. 1. Consumer Protection (Distance Selling) Regulations 2000 (as amended)
  3. 3. Purpose and application of the “Distance Selling” Regulations• To give customers cancellation rights in relation to contracts for the sale of goods or services.• To ensure that the seller supplies information to the customer in advance of the contract being concluded.• In short, to give customers a “cooling off” period after purchase during which they can change their minds and cancel the contract.
  4. 4. Our Clients Sale of goods in a shop vs sale at distance• In a shop sale, the purchaser cannot return the goods or ask for a refund once he has bought the goods just because he has changed his mind (except where goods are defective, where legislation such as the Sale of Goods Act applies).• Shops which give a no fault money back guarantee choose to do so as a marketing tool.• The Distance Selling Regulations apply to a contract where the seller and the customer are not in the same place at the time the contract is made and where the contract is concluded by some form of distance communication.• Whether the Regulations apply when a customer orders goods in specially on the understanding that she will buy them and then she doesn’t will depend on the circumstances. If goods are ordered by a distance method, the Regulations will apply.
  5. 5. Regulation 3 Clients Our – Interpretation• “Business” – “a trade or profession” – i.e. the definition is very wide.• “Consumer” – “any natural person who is acting for purposes which are outside his business”.• “Supplier” – “any person…acting in his commercial or professional capacity” – i.e. the Regulations don’t apply to business to business sales – only to business to consumer sales.• “Distance contract” – “any contract concerning goods or services concluded between a supplier and a consumer under an organised distance sale or distance provision scheme run by the supplier who makes exclusive use of one or more means of distance communications...”• “Means of distance communications” – “any means which, without the simultaneous physical presence of the supplier and the consumer, may be used for the conclusion of a contract…”. Schedule 1 sets out examples: • Telephone with human intervention. • Email. • Fax.
  6. 6. Our Clients Regulation 5 – Excepted contractsThe Regulations don’t apply to various contracts, including:• The sale of land.• The construction of a building where land is also sold.• Financial services.• Sales at auction.
  7. 7. Regulation 6 – Contracts to which only part of these Regulations apply• Timeshares.• Delivery of food and drink to a purchaser’s house or place of work.• Contracts for the provision of accommodation, transport, catering or leisure within a specified period.Regulations 7 to 19(1) don’t apply to such contracts, which is in practice almostall the distance selling provisions.• Package holidays (because they are covered by the Package Travel, Package Holiday and Package Tours Regulations 1992).• Unsolicited services (because they are covered by other regulations).
  8. 8. Regulation 7 – Information required prior to the conclusion of the contractThe seller must supply key information to the customer:(2) “…the information [must be] provided in a clear andcomprehensible manner appropriate to the means of distancecommunication used…”At this stage, therefore, the information could, for example, beprovided by telephone if the customer’s enquiry is by telephone. Theinformation must be provided in good time before the conclusion ofthe contract.
  9. 9. The information which the seller has to supply is:• The seller’s name and contact details.• Details of the goods or services.• The price of the goods or services (and delivery charges and cost of distance communications where calculated other than at basic rate) and the period for which the price remains valid.• Delivery arrangements.• The existence of the right to cancel.• The minimum duration of the contract where the goods or services are to be supplied recurrently.• Any proposal by the supplier to provide substitutes of equivalent price and quality (in which case, the cost of return must be met by the supplier).
  10. 10. Regulation 8 – Written and additional informationThis requires the seller to supply certain information in writing or another durable medium atthe latest at the time of delivery of the goods or, in the case of services, during theperformance of the contract.The information which the seller has to supply is:• The information required under Regulation 7 (i.e. the information which the seller has already had to supply).• Details of the customer’s cancellation rights under Regulation 10.• Where the goods are to be returned to in the event of cancellation and who pays for that.• Address for complaints.• Information about after sales service and guarantees.• Conditions for exercising the contractual right to cancel where there is a contract of unspecified duration or exceeding a year.NB. The term “durable medium” does not include referring the customer to a website because (a) this requiresactive steps to be taken by the customer and (b) a website’s contents can be changed by the seller after thecustomer has viewed it
  11. 11. Regulation 10 – Right to cancel and Regulation 11 – Cancellation period in the case of contracts for the supply of goodsThe customer can (in writing or other durable medium) cancel his purchase within thecancellation period, which is seven days beginning with the day after the day thepurchaser receives the goods.However, if the seller fails to supply the statutory information under Regulation 8 on time, thecustomer has seven days to cancel, beginning with the day after he eventually receives thestatutory information. Furthermore, where the seller fails to supply the statutory informationat all, the customer may cancel for up to three months and seven days, starting from theday after the customer receives the goods.NB. The provisions also apply in the event of delivery of goods to a third party.The customer can cancel by sending a notice by hand, fax, post or email.Notice is treated as having been given at the time of sending, leaving or posting.
  12. 12. Regulation 12 – Cancellation period in the case of contract for the supply of services• The cancellation period in relation to services begins with the day after the contract is concluded and ends after seven days.• Where the seller is late in giving the statutory information but does provide it within three months (beginning with the day after the contract was concluded), the cancellation period ends seven days from the day after the information is supplied.• Where the contract is performed with the customer’s agreement before the seven day cancellation period and the seller then provides the statutory information during the performance of the contract, the cancellation period ends seven days from the day after the information is supplied.• If the contract is performed before the seven day period has expired, the cancellation period ends on the day of the performance of the contract.• Where the seller fails completely to supply the statutory information, the cancellation period ends three months and seven days from the day after the contract is concluded – more on this below.
  13. 13. Regulation 13 – Exceptions to the right to cancel1. GoodsThe customer cannot cancel a contract for goods where those goods are: • Made to the customer’s specifications or are personalised. • By their nature cannot be returned or are liable to deteriorate rapidly e.g. perishable foodstuffs. • Magazines or audio / video / computer recordings.2. ServicesThe purchaser cannot cancel in relation to a contract for services whereperformance has already begun by the seller with the customer’s agreementbefore the end of the cancellation period, provided the seller has supplied thestatutory information first.
  14. 14. NOTICE TO CUSTOMER WHERE THE CONTRACT IS FOR SERVICES AND THE CUSTOMER IS TOCONTRACT OUT OF HIS CANCELLATION RIGHTS[Insert your letterhead here]Dear CustomerThe Consumer Protection (Distance Selling) Regulations 2000As we have not met face to face, the Consumer Protection (Distance Selling) Regulations2000 (as amended) apply to the contractual relationship set out in this letter. By signing andreturning this letter, you are agreeing that, to avoid any delay in the transaction, we maystart work on your behalf straight away. By so doing, you do not have a right tocancellation under the Regulations. We undertake to do the necessary work as soon aspossible, but the requirement under these Regulations for our services to you to beconcluded within 30 days will not apply.Yours sincerely / faithfully……………………………Customer’s name and signature
  15. 15. Regulation 14 – Recovery of sums paid by or on behalfof the consumer on cancellation and return of security• On cancellation, the seller must reimburse sums paid by the customer less the cost of recovering goods where the customer is contractually bound to return the goods on cancellation and he fails to do so or returns the goods at the supplier’s expense.• Repayment by the seller must be within 30 days of cancellation.• The supplier cannot charge for recovery of the goods where the customer is entitled to reject the goods by law or contract (e.g. where the goods are faulty) or where having to return the goods is an unfair term of the contract (which is unlikely to be the case).
  16. 16. Regulation 15 – Automatic cancellation of a related credit agreementWhere the purchaser cancels, the effect is to cancel any related credit agreement.Regulation 17 – Restoration of goods by consumer after cancellation• The customer must look after the goods and return them but only at his own premises – i.e. he only has to make the goods available for collection by the seller, unless the contract states otherwise.• Furthermore, the customer only has to return the goods on receipt of a written (or another durable means) request from the seller. If the customer does send the goods back, he shall take reasonable care of them but that is all.
  17. 17. Our Clients Performance by the supplier• Unless otherwise agreed, the seller must supply the goods within 30 days of the day after the order is sent.• If the seller can’t supply the goods, he must tell the customer and give a refund within 30 days of the day after the period for performance has expired.• If the seller fails to perform the contract in time, the contract is treated as never made.• Where the seller can’t supply the goods ordered, he can provide substitutes, as long as the contract allows for this and the seller pays for the return of the substitutes if the customer cancels.
  18. 18. Our Clients Regulation 18 – Goods given in part exchangeWithin ten days of the date of cancellation, the seller must return any partexchange goods, failing which the purchaser is entitled to the cash equivalent. Our Clients Regulation 25Contracting out is not permitted by the Regulations. Our ClientsRegulation 27 – Injunctions to secure compliance with these RegulationsThe Director General of Fair Trading or other enforcing authority may apply foran injunction against a seller in breach, to secure compliance (i.e. there is nocriminal offence associated with breach of the Regulations – it is civil only).
  19. 19. 2. Contracts Madein a Consumer’s Home or Place of Work etc Regulations 2008
  20. 20. Purpose of the RegulationsThe purpose of the “Doorstep Selling” Regulations is to give acustomer cancellation rights in respect of the purchase of goodsand services sold during a visit to his home or place of work or duringan excursion by the seller. The idea is to give customers a cooling offperiod in circumstances where they may have been pressurised intobuying. The Regulations apply to solicited and unsolicited visits.
  21. 21. Regulation 2 – Definitions“Consumer” – someone not acting pursuant to a trade or profession.“Trader” – someone acting in a commercial or professional capacityor through his agent.“Cancellation period” – seven day period starting with receipt by theconsumer of notice of his right to cancel.
  22. 22. Regulation 6 – Where the Regulations don’t apply• To consumer credit agreements under which the customer can cancel through statutory rights or through contractual terms. Such agreements are regulated by the Consumer Credit Act 1974.• Excepted contracts. These are listed in Schedule 3 and are contracts made on the basis of the trader’s catalogue where there is intended to be continuity of contract between the trader and the consumer.• Contracts for less than £35.
  23. 23. Regulation 7 – Cancellation rightsThe seller must notify the customer in writing of his cancellation rightsat the time when the contract is made. The notice must be easilylegible and must be headed “notice of the right to cancel” andmust be dated, state that the customer can cancel during thecancellation period, which is seven calendar days starting with theday of receipt of the written notice of the right to cancel. The sellermust also supply a separate cancellation form.
  24. 24. The notice must include:• the date;• the identity of the trader;• the trader’s reference number;• a statement that the customer has the right to cancel the contract if he wishes and that this right can be exercised by delivering or sending (including by email) a cancellation notice to the trader at any time within the cancellation period;• the name and address (including postal address and email) of a person to whom a cancellation notice may be given;• a statement that notice of cancellation is deemed to be served as soon as it is posted or sent to a trader or, in the case of an electronic communication, from the day it is sent to the trader;• a statement that the consumer can use the cancellation form provided if he wishes;• (in relation to specified contracts only) a statement that the customer may have to pay if performance of the contract begins with the customer’s written consent before the end of the cancellation period.
  25. 25. The cancellation form must read as follows:CANCELLATION FORM(Complete, detach and return this form ONLY IF YOU WISH TO CANCEL THECONTRACT)To:…………………………. [trader to insert name and address of person to whomnotice may be given]I / We (delete as appropriate) hereby give notice that I / we (delete asappropriate) wish to cancel my / our (delete as appropriate) contract……………………. [trader to insert reference number, code or other details toenable the contract or offer to be identified. He may also insert the name andaddress of the consumer.]SignedName and AddressDate
  26. 26. Regulation 8 – CancellationWhere the customer wants to cancel, he must serve a notice ofcancellation on the seller, using any format. Once the contract iscancelled, it is as if it was never entered into. The notice ofcancellation is treated as served on the day it is posted / faxed /emailed.
  27. 27. Regulation 9 – Where performance of the contract is to begin earlyWhere a customer wants performance of the contract to begin before the end of thecancellation period, he must request this in writing. A notice from the trader in writing muststate this and state that the customer may be required to pay for goods or services suppliedif performance of the contract has begun with written agreement before the end of thecancellation period. Where the contract is in writing, the seller’s notice must beincorporated into the document. If the trader begins work before the customer has signed,the customer does not have to pay.But, early performance of the contract and the customer’s obligation to pay for work doneonly applies to specified contracts which include:• The provision of services.• The supply of newspapers, periodicals or magazines.• Goods made to the customer’s specification or personalised.• The supply of perishables i.e. food.
  28. 28. The notice to the customer should read:NOTICE TO CUSTOMER WHERE PERFORMANCE IS TO BEGIN EARLY IN RELATION TO ASPECIFIED CONTRACT[Insert your letterhead here]Dear CustomerThe Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc Regulations2008As this contract is made at your home or place of work, I am required to give you a formalnotice of your right to cancel the contract between us. The form of notice is attached tothis letter.In accordance with the Regulations, by signing and returning this letter, you are agreeingthat to avoid any delay in the transaction we may start work on your behalf straight awayand we do not have to wait for the cancellation period to expire. You will be required topay for our services during the cancellation period even if you subsequently cancel thecontract.Yours sincerely / faithfully……………………………
  29. 29. Regulation 10Once the contract is cancelled, sums paid by the customer (including deposits) arerepayable (and the customer has a lien on any goods he holds until he is repaid). Regulation 11The cancellation notice cancels any related credit agreement. Regulation 13Once the contract is cancelled, the customer must look after the goods and allow thetrader to collect them. He is not under any obligation to send the goods back and is onlyobliged to make the goods available for collection. He only has to make them available forcollection if he has received a request in writing from the seller. The customer can send thegoods back but is under no obligation to.
  30. 30. Regulation 14If the trader has taken goods from the customer in part exchange, the trader must returnthose part exchange goods in good condition on cancellation or provide equivalent cash. Regulation 17 – OffencesIt is a criminal offence not to give notice of cancellation. The maximum sentence is a fine inthe Magistrates Court.
  31. 31. 3. Future Changes in the Law
  32. 32. The Government has to implement the Consumer Rights Directive byJune 2014.The Government is at present consulting over changes to theDistance Selling and the Doorstep Selling Regulations. Consequently,the proposed changes are not yet clear but are likely to be minor,including:• An obligation on the seller to notify the company providing credit to the customer of any cancellation of the contract.• Pre-contract information is likely to form part of the contract.The basic provisions of both sets of Regulations are likely to remainmuch as they are.