Consumer Rights Bill (HC Bill 3)

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CHAPTER 4 Services

What services contracts are covered?

48 Contracts covered by this Chapter

(1) This Chapter applies to a contract for a trader to supply a service to a
5consumer.

(2) That does not include a contract of employment or apprenticeship.

(3) In relation to Scotland, this Chapter does not apply 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
10to supply a service”.

(5) The Secretary of State may by order made by statutory instrument provide that
a provision of this Chapter does not apply in relation to a service of a
description specified in the order.

(6) An order under subsection (5) may contain transitional or transitory provision
15or savings.

(7) No order may be made under subsection (5) unless a draft of the statutory
instrument containing it has been laid before, and approved by a resolution of,
each House of Parliament.

What statutory rights are there under a services contract?

49 20Service to be performed with reasonable care and skill

(1) Every contract to supply a service is to be treated as including a term that the
trader must perform the service with reasonable care and skill.

(2) See section 54 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.

50 25Information about the trader or service to be binding

(1) Every contract to supply a service is to be treated as including as a term of the
contract anything that is said or written to the consumer, by or on behalf of the
trader, about the trader or the service, if—

(a) it is taken into account by the consumer when deciding to enter into the
30contract, or

(b) it is taken into account by the consumer when making any decision
about the service after entering into the contract.

(2) Anything taken into account by the consumer as mentioned in subsection (1)(a)
or (b) is subject to—

(a) 35anything that qualified it and was said or written to the consumer by
the trader on the same occasion, and

(b) any change to it that has been expressly agreed between the consumer
and the trader (before entering into the contract or later).

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(3) Without prejudice to subsection (1), any information provided by the trader in
accordance with regulation 9, 10 or 13 of the Consumer Contracts (Information,
Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134SI 2013/3134) is to be
treated as included as a term of the contract.

(4) 5A change to any of the information mentioned in subsection (3), made before
entering into the contract or later, is not effective unless expressly agreed
between the consumer and the trader.

(5) See section 54 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.

51 10Reasonable price to be paid for a service

(1) This section applies to a contract to supply a service, if—

(a) the consumer has not paid a price or other consideration for the service,

(b) the contract does not expressly fix a price or other consideration, and
does not say how it is to be fixed, and

(c) 15anything that is to be treated under section 50 as included in the
contract does not fix a price or other consideration either.

(2) In that case the contract is to be treated as including a term that the consumer
must pay a reasonable price for the service, and no more.

(3) What is a reasonable price is a question of fact.

52 20Service to be performed within a reasonable time

(1) This section applies to a contract to supply a service, if—

(a) the contract does not expressly fix the time for the service to be
performed, and does not say how it is to be fixed, and

(b) information that is to be treated under section 50 as included in the
25contract does not fix the time either.

(2) In that case the contract is to be treated as including a term that the trader must
perform the service within a reasonable time.

(3) What is a reasonable time is a question of fact.

(4) See section 54 for a consumer’s rights if the trader is in breach of a term that
30this section requires to be treated as included in a contract.

53 Relation to other law on contract terms

(1) Nothing in this Chapter affects any enactment or rule of law that imposes a
stricter duty on the trader.

(2) This Chapter is subject to any other enactment which defines or restricts the
35rights, duties or liabilities arising in connection with a service of any
description.

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

54 Consumer’s rights to enforce terms about services

(1) The consumer’s rights under this section and sections 55 and 56 do not affect
any rights that the contract provides for, if those are not inconsistent.

(2) 5In this section and section 55 reference to a service conforming to a contract is
a reference to—

(a) the service being performed in accordance with section 49, or

(b) the service conforming to a term that section 50 requires to be treated
as included in the contract and that relates to the performance of the
10service.

(3) If the service does not conform to the contract, the consumer’s rights (and the
provisions about them and when they are available) are—

(a) the right to require repeat performance (see section 55);

(b) the right to a price reduction (see section 56).

(4) 15If the trader is in breach of a term that section 50 requires to be treated as
included in the contract but that does not relate to the service, the consumer has
the right to a price reduction (see section 56 for provisions about that right and
when it is available).

(5) If the trader is in breach of what the contract requires under section 52
20(performance within a reasonable time), the consumer has the right to a price
reduction (see section 56 for provisions about that right and when it is
available).

(6) This section and sections 55 and 56 do not prevent the consumer seeking other
remedies for a breach of a term to which any of subsections (3) to (5) applies,
25instead of or in addition to a remedy referred to there (but not so as to recover
twice for the same loss).

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

(a) claiming damages;

(b) 30seeking to recover money paid where the consideration for payment of
the money has failed;

(c) seeking specific performance;

(d) seeking an order for specific implement;

(e) relying on the breach against a claim by the trader under the contract;

(f) 35exercising a right to treat the contract as at an end.

55 Right to repeat performance

(1) The right to require repeat performance is a right to require the trader to
perform the service again, to the extent necessary to complete its performance
in conformity with the contract.

(2) 40If the consumer requires such repeat performance, the trader—

(a) must provide it within a reasonable time and without significant
inconvenience to the consumer; and

(b) must bear any necessary costs incurred in doing so (including in
particular the cost of any labour or materials).

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(3) The consumer cannot require repeat performance if completing performance
of the service in conformity with the contract is impossible.

(4) Any question as to what is a reasonable time or significant inconvenience is to
be determined taking account of—

(a) 5the nature of the service, and

(b) the purpose for which the service was to be performed.

56 Right to price reduction

(1) The right to a price reduction is the right to require the trader to reduce the
price to the consumer by an appropriate amount (including the right to receive
10a refund for anything already paid above the reduced amount).

(2) The amount of the reduction may, where appropriate, be the full amount of the
price.

(3) A consumer who has that right and the right to require repeat performance is
only entitled to a price reduction in one of these situations—

(a) 15because of section 55(3) the consumer cannot require repeat
performance; or

(b) the consumer has required repeat performance, but the trader is in
breach of the requirement of section 55(2)(a) to do it within a reasonable
time and without significant inconvenience to the consumer.

(4) 20A refund under this section must be given without undue delay, and in any
event within 14 days beginning with the day on which the trader agrees that
the consumer is entitled to a refund.

(5) The trader must give the refund using the same means of payment as the
consumer used to pay for the service, unless the consumer expressly agrees
25otherwise.

(6) The trader must not impose any fee on the consumer in respect of the refund.

Can a trader contract out of statutory rights and remedies under a services contract?

57 Liability that cannot be excluded or restricted

(1) A term of a contract to supply services is not binding on the consumer to the
30extent that it would exclude the trader’s liability arising under section 49
(service to be performed with reasonable care and skill).

(2) Subject to section 50(2), a term of a contract to supply services is not binding on
the consumer to the extent that it would exclude the trader’s liability arising
under section 50 (information about trader or service to be binding).

(3) 35A term of a contract to supply services is not binding on the consumer to the
extent that it would restrict the trader’s liability arising under any of sections
49 and 50 and, where they apply, sections 51 and 52 (reasonable price and
reasonable time), if it would prevent the consumer in an appropriate case from
recovering the price paid or the value of any other consideration. (If it would
40not prevent the consumer from doing so, Part 2 (unfair terms) may apply.)

(4) That also means that a term of a contract to supply services is not binding on
the consumer to the extent that it would —

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(a) exclude or restrict a right or remedy in respect of a liability under any
of sections 49 to 52,

(b) make such a right or remedy or its enforcement subject to a restrictive
or onerous condition,

(c) 5allow a trader to put a person at a disadvantage as a result of pursuing
such a right or remedy, or

(d) exclude or restrict rules of evidence or procedure.

(5) The references in subsections (1) to (3) to excluding or restricting a liability also
includes preventing an obligation or duty arising or limiting its extent.

(6) 10An agreement in writing to submit present or future differences to arbitration
is not to be regarded as excluding or restricting any liability for the purposes
of this section.

(7) See Schedule 3 for provision about the enforcement of this section.

CHAPTER 5 General and supplementary provisions

58 15Powers of the court

(1) In any proceedings in which a remedy is sought by virtue of section 19(3) or (4),
42(2) or 54(3), the court, in addition to any other power it has, may act under
this section.

(2) On the application of the consumer the court may make an order requiring
20specific performance or, in Scotland, specific implement by the trader of any
obligation imposed on the trader by virtue of section 23, 43 or 55.

(3) Subsection (4) applies if—

(a) the consumer claims to exercise a right under the relevant remedies
provisions, but

(b) 25the court decides that those provisions have the effect that exercise of
another right is appropriate.

(4) The court may proceed as if the consumer had exercised that other right.

(5) If the consumer has claimed to exercise the final right to reject, the court may
order that any reimbursement to the consumer is reduced by a deduction for
30use, to take account of the use the consumer has had of the goods in the period
since they were delivered.

(6) Any deduction for use is limited as set out in section 24(9) and (10).

(7) The court may make an order under this section unconditionally or on such
terms and conditions as to damages, payment of the price and otherwise as it
35thinks just.

(8) The “relevant remedies provisions” are—

(a) where Chapter 2 applies, sections 23 and 24;

(b) where Chapter 3 applies, sections 43 and 44;

(c) where Chapter 4 applies, sections 55 and 56.

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59 Interpretation

These definitions apply in this Part (as well as the key definitions in section
2)—

  • “conditional sales contract” has the meaning given in section 5(3);

  • 5“Consumer Rights Directive” means Directive 2011/83/EU of the
    European Parliament and of the Council of 25 October 2011 on
    consumer rights, amending Council Directive 93/13/EEC and
    Directive 1999/44/EC of the European Parliament and of the Council
    and repealing Council Directive 85/577/EEC and Directive 97/7/EC
    10of the European Parliament and of the Council;

  • “credit-broker” means a person acting in the course of a business of credit
    brokerage carried on by that person;

  • “credit brokerage” means—

    (a)

    introducing individuals who want to obtain credit to persons
    15carrying on any business so far as it relates to the provision of
    credit,

    (b)

    introducing individuals who want to obtain goods on hire to
    persons carrying on a business which comprises or relates to
    supplying goods under a contract for the hire of goods, or

    (c)

    20introducing individuals who want to obtain credit, or to obtain
    goods on hire, to other persons engaged in credit brokerage;

  • “delivery” means voluntary transfer of possession from one person to
    another;

  • “enactment” includes—

    (a)

    25an enactment contained in subordinate legislation within the
    meaning of the Interpretation Act 1978,

    (b)

    an enactment contained in, or in an instrument made under, a
    Measure or Act of the National Assembly for Wales,

    (c)

    an enactment contained in, or in an instrument made under, an
    30Act of the Scottish Parliament, and

    (d)

    an enactment contained in, or in an instrument made under,
    Northern Ireland legislation;

  • “producer”, in relation to goods or digital content, means—

    (a)

    the manufacturer,

    (b)

    35the importer into the European Economic Area, or

    (c)

    any person who purports to be a producer by placing the
    person’s name, trade mark or other distinctive sign on the
    goods or using it in connection with the digital content.

60 Changes to other legislation

40Schedule 1 (amendments consequential on this Part) has effect.

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Part 2 Unfair terms

What contracts and notices are covered by this Part?

61 Contracts and notices covered by this Part

(1) 5This Part applies to a contract between a trader and a consumer.

(2) This does not include a contract of employment or apprenticeship.

(3) A contract to which this Part applies is referred to in this Part as a “consumer
contract”.

(4) This Part applies to a notice to the extent that it—

(a) 10relates to rights or obligations as between a trader and a consumer, or

(b) purports to exclude or restrict a trader’s liability to a consumer.

(5) This does not include a notice relating to rights, obligations or liabilities as
between an employer and an employee.

(6) It does not matter for the purposes of subsection (4) whether the notice is
15expressed to apply to a consumer, as long as it is reasonable to assume it is
intended to be seen or heard by a consumer.

(7) A notice to which this Part applies is referred to in this Part as a “consumer
notice”.

(8) In this section “notice” includes an announcement, whether or not in writing,
20and any other communication or purported communication.

What are the general rules about fairness of contract terms and notices?

62 Requirement for contract terms and notices to be fair

(1) An unfair term of a consumer contract is not binding on the consumer.

(2) An unfair consumer notice is not binding on the consumer.

(3) 25This does not prevent the consumer from relying on the term or notice if the
consumer chooses to do so.

(4) A term is unfair if, contrary to the requirement of good faith, it causes a
significant imbalance in the parties’ rights and obligations under the contract
to the detriment of the consumer.

(5) 30Whether a term is fair is to be determined—

(a) taking into account the nature of the subject matter of the contract, and

(b) by reference to all the circumstances existing when the term was agreed
and to all of the other terms of the contract or of any other contract on
which it depends.

(6) 35A notice is unfair if, contrary to the requirement of good faith, it causes a
significant imbalance in the parties’ rights and obligations to the detriment of
the consumer.

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(7) Whether a notice is fair is to be determined—

(a) taking into account the nature of the subject matter of the notice, and

(b) by reference to all the circumstances existing when the rights or
obligations to which it relates arose and to the terms of any contract on
5which it depends.

(8) This section does not affect the operation of—

(a) section 31 (exclusion of liability: goods contracts),

(b) section 47 (exclusion of liability: digital content contracts),

(c) section 57 (exclusion of liability: services contracts), or

(d) 10section 65 (exclusion of negligence liability).

63 Contract terms which may or must be regarded as unfair

(1) Part 1 of Schedule 2 contains an indicative and non-exhaustive list of terms of
consumer contracts that may be regarded as unfair for the purposes of this
Part.

(2) 15Part 1 of Schedule 2 is subject to Part 2 of that Schedule; but a term listed in Part
2 of that Schedule may nevertheless be assessed for fairness under section 62
unless section 64 or 73 applies to it.

(3) The Secretary of State may by order made by statutory instrument amend
Schedule 2 so as to add, modify or remove an entry in Part 1 or Part 2 of that
20Schedule.

(4) An order under subsection (3) may contain transitional or transitory provision
or savings.

(5) No order may be made under subsection (3) unless a draft of the statutory
instrument containing it has been laid before, and approved by a resolution of,
25each House of Parliament.

(6) A term of a consumer contract must be regarded as unfair if it has the effect that
the consumer bears the burden of proof with respect to compliance by a
distance supplier or an intermediary with an obligation under any enactment
or rule implementing the Distance Marketing Directive.

(7) 30In subsection (6)

  • “the Distance Marketing Directive” means Directive 2002/65/EC of the
    European Parliament and of the Council of 23 September 2002
    concerning the distance marketing of consumer financial services and
    amending Council Directive 90/619/EEC and Directives 97/7/EC and
    3598/27/EC;

  • “distance supplier” means—

    (a)

    a supplier under a distance contract within the meaning of the
    Financial Services (Distance Marketing) Regulations 2004 (SI
    2004/2095), or

    (b)

    40a supplier of unsolicited financial services within the meaning
    of regulation 15 of those regulations;

  • “enactment” includes an enactment contained in subordinate legislation
    within the meaning of the Interpretation Act 1978;

  • “intermediary” has the same meaning as in the Financial Services
    45(Distance Marketing) Regulations 2004;

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  • “rule” means a rule made by the Financial Conduct Authority or the
    Prudential Regulation Authority under the Financial Services and
    Markets Act 2000 or by a designated professional body within the
    meaning of section 326(2) of that Act.

64 5Exclusion from assessment of fairness

(1) A term of a consumer contract may not be assessed for fairness under section
62 to the extent that—

(a) it specifies the main subject matter of the contract, or

(b) the assessment is of the appropriateness of the price payable under the
10contract by comparison with the goods, digital content or services
supplied under it.

(2) Subsection (1) excludes a term from an assessment under section 62 only if it is
transparent and prominent.

(3) A term is transparent for the purposes of this Part if it is expressed in plain and
15intelligible language and (in the case of a written term) is legible.

(4) A term is prominent for the purposes of this section if it is brought to the
consumer’s attention in such a way that an average consumer would be aware
of the term.

(5) In subsection (4) “average consumer” means a consumer who is reasonably
20well-informed, observant and circumspect.

(6) This section does not apply to a term of a contract listed in Part 1 of Schedule 2.

65 Bar on exclusion or restriction of negligence liability

(1) A trader cannot by a term of a consumer contract or by a consumer notice
exclude or restrict liability for death or personal injury resulting from
25negligence.

(2) Where a term of a consumer contract, or a consumer notice, purports to exclude
or restrict a trader’s liability for negligence, a person is not to be taken to have
voluntarily accepted any risk merely because the person agreed to or knew
about the term or notice.

(3) 30In this section “personal injury” includes any disease and any impairment of
physical or mental condition.

(4) In this section “negligence” means the breach of—

(a) any obligation to take reasonable care or exercise reasonable skill in the
performance of a contract where the obligation arises from an express
35or implied term of the contract,

(b) a common law duty to take reasonable care or exercise reasonable skill,

(c) the common law duty of care imposed by the Occupiers’ Liability Act
1957 or the Occupiers’ Liability Act (Northern Ireland) 1957, or

(d) the duty of reasonable care imposed by section 2(1) of the Occupiers’
40Liability (Scotland) Act 1960.

(5) It is immaterial for the purposes of subsection (4)

(a) whether a breach of duty or obligation was inadvertent or intentional,
or

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(b) whether liability for it arises directly or vicariously.

(6) This section is subject to section 66 (which makes provision about the scope of
this section).

66 Scope of section 65

(1) 5Section 65 does not apply to—

(a) any contract so far as it is a contract of insurance, including a contract
to pay an annuity on human life, or

(b) any contract so far as it relates to the creation or transfer of an interest
in land.

(2) 10Section 65 does not affect the validity of any discharge or indemnity given by
a person in consideration of the receipt by that person of compensation in
settlement of any claim the person has.

(3) Section 65 does not—

(a) apply to liability which is excluded or discharged as mentioned in
15section 4(2)(a) (exception to liability to pay damages to relatives) of the
Damages (Scotland) Act 2011, or

(b) affect the operation of section 5 (discharge of liability to pay damages:
exception for mesothelioma) of that Act.

(4) Section 65 does not apply to the liability of an occupier of premises to a person
20who obtains access to the premises for recreational purposes if—

(a) the person suffers loss or damage because of the dangerous state of the
premises, and

(b) allowing the person access for those purposes is not within the
purposes of the occupier’s trade, business, craft or profession.

67 25Effect of an unfair term on the rest of a contract

Where a term of a consumer contract is not binding on the consumer as a result
of this Part, the contract continues, so far as practicable, to have effect in every
other respect.

68 Requirement for transparency

(1) 30A trader must ensure that a written term of a consumer contract, or a consumer
notice in writing, is transparent.

(2) A consumer notice is transparent for the purposes of subsection (1) if it is
expressed in plain and intelligible language and it is legible.

69 Contract terms that may have different meanings

(1) 35If a term in a consumer contract, or a consumer notice, could have different
meanings, the meaning that is most favourable to the consumer is to prevail.

(2) Subsection (1) does not apply to the construction of a term or a notice in
proceedings on an application for an injunction or interdict under paragraph 3
of Schedule 3.