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A

BILL

[AS AMENDED IN PUBLIC BILL COMMITTEE]

TO

Amend the law relating to the rights of consumers and protection of their
interests, to make provision about investigatory powers for enforcing the
regulation of traders, to make provision about private actions in competition
law, and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 Consumer contracts for goods, digital content and services

CHAPTER 1 Introduction

1 Where Part 1 applies

(1) 5This Part applies where there is an agreement between a trader and a consumer
for the trader to supply goods, digital content or services, if the agreement is a
contract.

(2) It applies whether the contract is written or oral or implied from the parties’
conduct, or more than one of these combined.

(3) 10Any of Chapters 2, 3 and 4 may apply to a contract—

(a) if it is a contract for the trader to supply goods, see Chapter 2;

(b) if it is a contract for the trader to supply digital content, see Chapter 3
(also, subsection (6));

(c) if it is a contract for the trader to supply a service, see Chapter 4 (also,
15subsection (6).

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(4) In each case the Chapter applies even if the contract also covers something
covered by another Chapter (a mixed contract).

(5) Two or all three of those Chapters may apply to a mixed contract.

(6) For provisions about particular mixed contracts, see—

(a) 5section 15 (goods and installation);

(b) section 16 (goods and digital content).

(7) For other provision applying to contracts to which this Part applies, see Part 2
(unfair terms in contracts).

2 Key definitions

(1) 10These definitions apply in this Part (as well as the definitions in section 59).

(2) “Trader” means a person acting for purposes relating to that person’s trade,
business, craft or profession, whether acting personally or through another
person acting in the trader’s name or on the trader’s behalf.

(3) “Consumer” means an individual acting for purposes that are wholly or
15mainly outside that individual’s trade, business, craft or profession.

(4) A trader claiming that an individual was not acting for purposes wholly or
mainly outside the individual’s trade, business, craft or profession must prove
it.

(5) For the purposes of Chapter 2, except to the extent mentioned in subsection (6),
20a person is not a consumer in relation to a sales contract if—

(a) the goods are second hand goods sold at public auction, and

(b) individuals have the opportunity of attending the sale in person.

(6) A person is a consumer in relation to such a contract for the purposes of—

(a) sections 11(4) and (5), 12, 28 and 29, and

(b) 25the other provisions of Chapter 2 as they apply in relation to those
sections.

(7) “Business” includes the activities of any government department or local or
public authority.

(8) “Goods” means any tangible moveable items, but that includes water, gas and
30electricity if and only if they are put up for supply in a limited volume or set
quantity.

(9) “Digital content” means data which are produced and supplied in digital form.

CHAPTER 2 Goods

What goods contracts are covered?

3 35Contracts covered by this Chapter

(1) This Chapter applies to a contract for a trader to supply goods to a consumer.

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(2) It applies only if the contract is one of these (defined for the purposes of this
Part in sections 5 to 8)—

(a) a sales contract;

(b) a contract for the hire of goods;

(c) 5a hire-purchase agreement;

(d) a contract for transfer of goods.

(3) It does not apply—

(a) to a contract for a trader to supply coins or notes to a consumer for use
as currency;

(b) 10to a contract for goods to be sold by way of execution or otherwise by
authority of law;

(c) to a contract intended to operate as a mortgage, pledge, charge or other
security;

(d) in relation to England and Wales or Northern Ireland, to a contract
15made by deed and for which the only consideration is the presumed
consideration imported by the deed;

(e) in relation to Scotland, to a contract for which there is no consideration.

(4) A contract to which this Chapter applies is referred to in this Part as a “contract
to supply goods”.

(5) 20Contracts to supply goods include—

(a) contracts entered into between one part owner and another;

(b) contracts for the transfer of an undivided share in goods;

(c) contracts that are absolute and contracts that are conditional.

(6) Subsection (1) is subject to any provision of this Chapter that applies a section
25or part of a section to only some of the kinds of contracts listed in subsection (2).

(7) A mixed contract (see section 1(4)) may be a contract of any of those kinds.

4 Ownership of goods

(1) In this Chapter ownership of goods means the general property in goods, not
merely a special property.

(2) 30For the time when ownership of goods is transferred, see in particular the
following provisions of the Sale of Goods Act 1979 (which relate to contracts of
sale)—

section 16: goods must be ascertained
section 17: property passes when intended to pass
section 18: 35rules for ascertaining intention
section 19: reservation of right of disposal
section 20A: undivided shares in goods forming
part of a bulk
section 20B: deemed consent by co-owner to
40dealings in bulk goods
5 Sales contracts

(1) A contract is a sales contract if under it—

(a) the trader transfers or agrees to transfer ownership of goods to the
consumer, and

(b) 45the consumer pays or agrees to pay the price.

(2) A contract is a sales contract (whether or not it would be one under subsection
(1)) if under the contract—

(a) goods are to be manufactured or produced and the trader agrees to
supply them to the consumer,

(b) 50on being supplied, the goods will be owned by the consumer, and

(c) the consumer pays or agrees to pay the price.

(3) A sales contract may be conditional (see section 3(5)), but in this Part
“conditional sales contract” means a sales contract under which—

(a) the price for the goods or part of it is payable by instalments, and

(b) 55the trader retains ownership of the goods until the conditions specified
in the contract (for the payment of instalments or otherwise) are met;

and it makes no difference whether or not the consumer possesses the goods.

6 Contracts for the hire of goods

(1) A contract is for the hire of goods if under it the trader gives or agrees to give
60the consumer possession of the goods with the right to use them, subject to the
terms of the contract, for a period determined in accordance with the contract.

(2) But a contract is not for the hire of goods if it is a hire-purchase agreement.

7 Hire-purchase agreements

(1) A contract is a hire-purchase agreement if it meets the two conditions set out
65below.

(2) The first condition is that under the contract goods are hired by the trader in
return for periodical payments by the consumer (and “hired” is to be read in
accordance with section 6(1)).

(3) The second condition is that under the contract ownership of the goods will
70transfer to the consumer if the terms of the contract are complied with and—

(a) the consumer exercises an option to buy the goods,

(b) any party to the contract does an act specified in it, or

(c) an event specified in the contract occurs.

(4) But a contract is not a hire-purchase agreement if it is a conditional sales
75contract.

8 Contracts for transfer of goods

A contract to supply goods is a contract for transfer of goods if under it the
trader transfers or agrees to transfer ownership of the goods to the consumer
and—

(a) 80the consumer provides or agrees to provide consideration otherwise
than by paying a price, or

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(b) the contract is, for any other reason, not a sales contract or a hire-
purchase agreement.

What statutory rights are there under a goods contract?

9 Goods to be of satisfactory quality

(1) 5Every contract to supply goods is to be treated as including a term that the
quality of the goods is satisfactory.

(2) The quality of goods is satisfactory if they meet the standard that a reasonable
person would consider satisfactory, taking account of—

(a) any description of the goods,

(b) 10the price or other consideration for the goods (if relevant), and

(c) all the other relevant circumstances (see subsection (5)).

(3) The quality of goods includes their state and condition; and the following
aspects (among others) are in appropriate cases aspects of the quality of
goods—

(a) 15fitness for all the purposes for which goods of that kind are usually
supplied;

(b) appearance and finish;

(c) freedom from minor defects;

(d) safety;

(e) 20durability.

(4) The term mentioned in subsection (1) does not cover anything which makes the
quality of the goods unsatisfactory—

(a) which is specifically drawn to the consumer’s attention before the
contract is made,

(b) 25where the consumer examines the goods before the contract is made,
which that examination ought to reveal, or

(c) in the case of a contract to supply goods by sample, which would have
been apparent on a reasonable examination of the sample.

(5) The relevant circumstances mentioned in subsection (2)(c) include any public
30statement about the specific characteristics of the goods made by the trader, the
producer or any representative of the trader or the producer.

(6) That includes, in particular, any public statement made in advertising or
labelling.

(7) But a public statement is not a relevant circumstance for the purposes of
35subsection (2)(c) if the trader shows that—

(a) when the contract was made, the trader was not, and could not
reasonably have been, aware of the statement,

(b) before the contract was made, the statement had been publicly
withdrawn or, to the extent that it contained anything which was
40incorrect or misleading, it had been publicly corrected, or

(c) the consumer’s decision to contract for the goods could not have been
influenced by the statement.

(8) In a contract to supply goods a term about the quality of the goods may be
treated as included as a matter of custom.

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(9) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in a contract.

10 Goods to be fit for particular purpose

(1) Subsection (3) applies to a contract to supply goods if before the contract is
5made the consumer makes known to the trader (expressly or by implication)
any particular purpose for which the consumer is contracting for the goods.

(2) Subsection (3) also applies to a contract to supply goods if—

(a) the goods were previously sold by a credit-broker to the trader,

(b) in the case of a sales contract or contract for transfer of goods, the
10consideration or part of it is a sum payable by instalments, and

(c) before the contract is made, the consumer makes known to the credit-
broker (expressly or by implication) any particular purpose for which
the consumer is contracting for the goods.

(3) The contract is to be treated as including a term that the goods are reasonably
15fit for that purpose, whether or not that is a purpose for which goods of that
kind are usually supplied.

(4) Subsection (3) does not apply if the circumstances show that the consumer
does not rely, or it is unreasonable for the consumer to rely, on the skill or
judgment of the trader or credit-broker.

(5) 20In a contract to supply goods a term about the fitness of the goods for a
particular purpose may be treated as included as a matter of custom.

(6) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in a contract.

11 Goods to be as described

(1) 25Every contract to supply goods by description is to be treated as including a
term that the goods will match the description.

(2) If the supply is by sample as well as by description, it is not sufficient that the
bulk of the goods matches the sample if the goods do not also match the
description.

(3) 30A supply of goods is not prevented from being a supply by description just
because—

(a) the goods are exposed for supply, and

(b) they are selected by the consumer.

(4) Any information that is provided by the trader about the goods and is
35information mentioned in paragraph (a) of Schedule 1 or 2 to the Consumer
Contracts (Information, Cancellation and Additional Charges) Regulations
2013 (SI 2013/3134SI 2013/3134) (main characteristics of goods) is to be treated as included
as a term of the contract.

(5) A change to any of that information, made before entering into the contract or
40later, is not effective unless expressly agreed between the consumer and the
trader.

(6) See section 2(5) and (6) for the application of subsections (4) and (5) where
goods are sold at public auction.

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(7) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in a contract.

12 Other pre-contract information included in contract

(1) This section applies to any contract to supply goods.

(2) 5Where regulation 9, 10 or 13 of the Consumer Contracts (Information,
Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134SI 2013/3134)
required the trader to provide information to the consumer before the contract
became binding, any of that information that was provided by the trader other
than information about the goods and mentioned in paragraph (a) of Schedule
101 or 2 to the Regulations (main characteristics of goods) is to be treated as
included as a term of the contract.

(3) A change to any of that information, made before entering into the contract or
later, is not effective unless expressly agreed between the consumer and the
trader.

(4) 15See section 2(5) and (6) for the application of this section where goods are sold
at public auction.

(5) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in the contract.

13 Goods to match a sample

(1) 20This section applies to a contract to supply goods by reference to a sample of
the goods that is seen or examined by the consumer before the contract is
made.

(2) Every contract to which this section applies is to be treated as including a term
that—

(a) 25the goods will match the sample except to the extent that any
differences between the sample and the goods are brought to the
consumer’s attention before the contract is made, and

(b) the goods will be free from any defect that makes their quality
unsatisfactory and that would not be apparent on a reasonable
30examination of the sample.

(3) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in a contract.

14 Goods to match a model seen or examined

(1) This section applies to a contract to supply goods by reference to a model of the
35goods that is seen or examined by the consumer before entering into the
contract.

(2) Every contract to which this section applies is to be treated as including a term
that the goods will match the model except to the extent that any differences
between the model and the goods are brought to the consumer’s attention
40before the consumer enters into the contract.

(3) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in a contract.

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15 Installation as part of conformity of the goods with the contract

(1) Goods do not conform to a contract to supply goods if—

(a) installation of the goods forms part of the contract,

(b) the goods are installed by the trader or under the trader’s
5responsibility, and

(c) the goods are installed incorrectly.

(2) See section 19 for the effect of goods not conforming to the contract.

16 Goods not conforming to contract if digital content does not conform

(1) Goods (whether or not they conform otherwise to a contract to supply goods)
10do not conform to it if—

(a) the goods are an item that includes digital content, and

(b) the digital content does not conform to the contract to supply that
content (for which see section 42(1)).

(2) See section 19 for the effect of goods not conforming to the contract.

17 15Trader to have right to supply the goods etc

(1) Every contract to supply goods, except one within subsection (4), is to be
treated as including a term—

(a) in the case of a contract for the hire of goods, that at the beginning of
the period of hire the trader must have the right to transfer possession
20of the goods by way of hire for that period,

(b) in any other case, that the trader must have the right to sell or transfer
the goods at the time when ownership of the goods is to be transferred.

(2) Every contract to supply goods, except a contract for the hire of goods or a
contract within subsection (4), is to be treated as including a term that—

(a) 25the goods are free from any charge or encumbrance not disclosed or
known to the consumer before entering into the contract,

(b) the goods will remain free from any such charge or encumbrance until
ownership of them is to be transferred, and

(c) the consumer will enjoy quiet possession of the goods except so far as
30it may be disturbed by the owner or other person entitled to the benefit
of any charge or encumbrance so disclosed or known.

(3) Every contract for the hire of goods is to be treated as including a term that the
consumer will enjoy quiet possession of the goods for the period of the hire
except so far as the possession may be disturbed by the owner or other person
35entitled to the benefit of any charge or encumbrance disclosed or known to the
consumer before entering into the contract.

(4) This subsection applies to a contract if the contract shows, or the circumstances
when they enter into the contract imply, that the trader and the consumer
intend the trader to transfer only—

(a) 40whatever title the trader has, even if it is limited, or

(b) whatever title a third person has, even if it is limited.

(5) Every contract within subsection (4) is to be treated as including a term that all
charges or encumbrances known to the trader and not known to the consumer
were disclosed to the consumer before entering into the contract.

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(6) Every contract within subsection (4) is to be treated as including a term that the
consumer’s quiet possession of the goods—

(a) will not be disturbed by the trader, and

(b) will not be disturbed by a person claiming through or under the trader,
5unless that person is claiming under a charge or encumbrance that was
disclosed or known to the consumer before entering into the contract.

(7) If subsection (4)(b) applies (transfer of title that a third person has), the contract
is also to be treated as including a term that the consumer’s quiet possession of
the goods—

(a) 10will not be disturbed by the third person, and

(b) will not be disturbed by a person claiming through or under the third
person, unless the claim is under a charge or encumbrance that was
disclosed or known to the consumer before entering into the contract.

(8) In the case of a contract for the hire of goods, this section does not affect the
15right of the trader to repossess the goods where the contract provides or is to
be treated as providing for this.

(9) See section 19 for a consumer’s rights if the trader is in breach of a term that
this section requires to be treated as included in a contract.

18 No other requirement to treat term about quality or fitness as included

(1) 20Except as provided by sections 9, 10, 13 and 16, a contract to supply goods is
not to be treated as including any term about the quality of the goods or their
fitness for any particular purpose, unless the term is expressly included in the
contract.

(2) Subsection (1) is subject to provision made by any other enactment (whenever
25passed or made).

What remedies are there if statutory rights under a goods contract are not met?

19 Consumer’s rights to enforce terms about goods

(1) In this section and sections 22 to 24 references to goods conforming to a
contract are references to—

(a) 30the goods conforming to the terms described in sections 9, 10, 11, 13 and
14,

(b) the goods not failing to conform to the contract under section 15 or 16,
and

(c) the goods conforming to requirements that are stated in the contract.

(2) 35But, for the purposes of this section and sections 22 to 24, a failure to conform
as mentioned in subsection (1)(a) to (c) is not a failure to conform to the contract
if it has its origin in materials supplied by the consumer.

(3) If the goods do not conform to the contract because of a breach of any of the
terms described in sections 9, 10, 11, 13 and 14, or if they do not conform to the
40contract under section 16, the consumer’s rights (and the provisions about
them and when they are available) are—

(a) the short-term right to reject (sections 20 and 22);

(b) the right to repair or replacement (section 23); and

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(c) the right to a price reduction or the final right to reject (sections 20 and
24).

(4) If the goods do not conform to the contract under section 15 or because of a
breach of requirements that are stated in the contract, the consumer’s rights
5(and the provisions about them and when they are available) are—

(a) the right to repair or replacement (section 23); and

(b) the right to a price reduction or the final right to reject (sections 20 and
24).

(5) If the trader is in breach of a term that section 12 requires to be treated as
10included in the contract, the consumer has the right to recover from the trader
the amount of any costs incurred by the consumer as a result of the breach, up
to the amount of the price paid or the value of other consideration given for the
goods.

(6) If the trader is in breach of the term that section 17(1) (right to supply etc)
15requires to be treated as included in the contract, the consumer has a right to
reject (see section 20 for provisions about that right and when it is available).

(7) Subsections (3) to (6) are subject to section 25 and subsections (3)(a) and (6) are
subject to section 26.

(8) Section 28 makes provision about remedies for breach of a term about the time
20for delivery of goods.

(9) This Chapter does not prevent the consumer seeking other remedies—

(a) for a breach of a term that this Chapter requires to be treated as
included in the contract,

(b) on the grounds that, under section 15 or 16, goods do not conform to the
25contract, or

(c) for a breach of a requirement stated in the contract.

(10) Those other remedies may be ones—

(a) in addition to a remedy referred to in subsections (3) to (6) (but not so
as to recover twice for the same loss), or

(b) 30instead of such a remedy, or

(c) where no such remedy is provided for.

(11) Those other remedies include any of the following that is open to the consumer
in the circumstances—

(a) claiming damages;

(b) 35seeking specific performance;

(c) seeking an order for specific implement;

(d) relying on the breach against a claim by the trader for the price;

(e) for breach of an express term, exercising a right to treat the contract as
at an end.

(12) 40It is not open to the consumer to treat the contract as at an end for breach of a
term that this Chapter requires to be treated as included in the contract, or on
the grounds that, under section 15 or 16, goods do not conform to the contract,
except as provided by subsections (3), (4) and (6).

(13) In this Chapter, treating a contract as at an end means treating it as repudiated.

(14) 45For the purposes of subsections (3)(b) and (c) and (4), goods which do not
conform to the contract at any time within the period of six months beginning

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