Consumer Rights Bill (HL Bill 52)

9 In section 1 (contracts to which Act applies), after subsection (4) insert—

“(5) Certain sections or subsections of this Act do not apply to a contract
to which Chapter 2 of Part 1 of the Consumer Rights Act 2014
applies.

(6) 5Where that is the case it is indicated in the section concerned.”

10 In section 11 (when condition to be treated as warranty), after subsection (4)
insert—

“(4A) Subsection (4) does not apply to a contract to which Chapter 2 of Part
1 of the Consumer Rights Act 2014 applies (but see the provision
10made about such contracts in sections 19 to 22 of that Act).”

11 In section 12 (implied terms about title etc), after subsection (6) insert—

“(7) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 17 of that Act).”

12 15In section 13 (sale by description), after subsection (4) insert—

“(5) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 11 of that Act).”

13 (1) Section 14 (implied terms about quality or fitness) is amended as follows.

(2) 20Omit subsections (2D) to (2F).

(3) After subsection (8) insert—

“(9) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in sections 9, 10 and 18 of that Act).”

14 25In section 15 (sale by sample), after subsection (4) insert—

“(5) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in sections 13 and 18 of that Act).”

15 In section 15A (modification of remedies for breach of condition in non-
30consumer cases), in subsection (1) omit “then, if the buyer does not deal as
consumer,”.

16 (1) Section 15B (remedies for breach of contract as respects Scotland) is
amended as follows.

(2) After subsection (1) insert—

“(1A) 35Subsection (1) does not apply to a contract to which Chapter 2 of Part
1 of the Consumer Rights Act 2014 applies (but see the provision
made about such contracts in sections 19 to 22 of that Act).”

(3) Omit subsection (2).

17 (1) In section 20 (passing of risk), for subsection (4) substitute—

“(4) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 29 of that Act).”

(2) 5The marginal note “Passing of risk” substituted by the Sale and Supply of
Goods to Consumers Regulations 2002 (SI 2002/3045SI 2002/3045) is not affected by the
revocation of those Regulations by this Schedule.

18 In section 29 (rules about delivery), after subsection (3) insert—

“(3A) Subsection (3) does not apply to a contract to which Chapter 2 of Part
101 of the Consumer Rights Act 2014 applies (but see the provision
made about such contracts in section 28 of that Act).”

19 (1) Section 30 (delivery of wrong quantity) is amended as follows.

(2) In subsection (2A) omit “who does not deal as consumer”.

(3) After subsection (5) insert—

“(6) 15This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 25 of that Act).”

20 In section 31 (instalment deliveries) after subsection (2) insert—

“(3) This section does not apply to a contract to which Chapter 2 of Part 1
20of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 26 of that Act).”

21 In section 32 (delivery to carrier), for subsection (4) substitute—

“(4) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
25about such contracts in section 29 of that Act).”

22 (1) Section 33 (risk where goods are delivered at distant place) is amended as
follows.

(2) At the beginning insert “(1)”.

(3) At the end insert—

“(2) 30This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 29 of that Act).”

23 (1) Section 34 (buyer’s right to examine the goods) is amended as follows.

(2) At the beginning insert “(1)”.

(3) 35At the end insert—

“(2) Nothing in this section affects the operation of section 22 (time limit
for short-term right to reject) of the Consumer Rights Act 2014.”

24 (1) Section 35 (acceptance) is amended as follows.

(2) Omit subsection (3).

(3) After subsection (8) insert—

“(9) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 21 of that Act).”

25 5In section 35A (right of partial rejection), after subsection (4) insert—

“(5) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 21 of that Act).”

26 (1) Section 36 (buyer not bound to return rejected goods) is amended as follows.

(2) 10At the beginning insert “(1)”.

(3) At the end insert—

“(2) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 20 of that Act).”

27 15Omit Part 5A (additional rights of buyer in consumer cases).

28 In section 51 (damages for non-delivery), after subsection (3) insert—

“(4) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 19 of that Act).”

29 20In section 52 (specific performance), after subsection (4) insert—

“(5) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 19 of that Act).”

30 In section 53 (remedy for breach of warranty), after subsection (4) insert—

“(4A) 25This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 19 of that Act).”

31 In section 53A (measure of damages as respects Scotland), after subsection
(2) insert—

“(2A) 30This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 19 of that Act).”

32 (1) Section 54 (interest) is amended as follows.

(2) At the beginning insert “(1)”.

(3) 35At the end insert—

“(2) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
about such contracts in section 19 of that Act).”

33 In section 55 (exclusion of implied terms), after subsection (1) insert—

“(1A) Subsection (1) does not apply to a contract to which Chapter 2 of Part
1 of the Consumer Rights Act 2014 applies (but see the provision
made about such contracts in section 31 of that Act).”

34 (1) 5Section 58 (payment into court in Scotland) is amended as follows.

(2) At the beginning insert “(1)”.

(3) At the end insert—

“(2) This section does not apply to a contract to which Chapter 2 of Part 1
of the Consumer Rights Act 2014 applies (but see the provision made
10about such contracts in section 27 of that Act).”

35 (1) Section 61(1) (interpretation) is amended as follows.

(2) In subsection (1) omit the following definitions—

(a) “consumer contract”;

(b) “producer”;

(c) 15“repair”.

(3) Omit subsection (5A).

36 In section 62(2) (saving for rules of law), for “this Act” substitute “legislation
including this Act and the Consumer Rights Act 2014”.

Supply of Goods and Services Act 1982

37 20The Supply of Goods and Services Act 1982 is amended as follows.

38 In each place—

(a) for “contract for the transfer of goods” substitute “relevant contract
for the transfer of goods”;

(b) for “contract for the hire of goods” substitute “relevant contract for
25the hire of goods”;

(c) for “contract for the supply of a service” substitute “relevant contract
for the supply of a service”.

39 In section 1 (the contracts concerned: transfer of property in goods, as
respects England and Wales and Northern Ireland), in subsection (1) at the
30end insert “, and other than a contract to which Chapter 2 of Part 1 of the
Consumer Rights Act 2014 applies.”

40 In section 4 (implied terms about quality or fitness) omit subsections (2B) to
(2D).

41 In section 5A (modification of remedies for breach of statutory condition in
35non-consumer cases), in subsection (1) omit “then, if the transferee does not
deal as consumer,”.

42 In section 6 (the contracts concerned: hire of goods, as respects England and
Wales and Northern Ireland), in subsection (1) at the end insert “, and other
than a contract to which Chapter 2 of Part 1 of the Consumer Rights Act 2014
40applies.”

43 In section 9 (implied terms about quality or fitness) omit subsections (2B) to
(2D).

44 In section 10A (modification of remedies for breach of statutory condition in
non-consumer cases) in subsection (1) omit “then, if the bailee does not deal
as consumer,”.

45 In section 11A (the contracts concerned: transfer of property in goods, as
5respects Scotland), in subsection (1) at the end insert “, and other than a
contract to which Chapter 2 of Part 1 of the Consumer Rights Act 2014
applies.”

46 In section 11D (implied terms about quality or fitness in contracts for
transfer of property in goods) omit subsections (3A) to (3C) and (10).

47 10In section 11F (remedies for breach of contract) omit subsections (2) and (3).

48 In section 11G (the contracts concerned: hire of goods, as respects Scotland),
in subsection (1) at the end insert “, and other than a contract to which
Chapter 2 of Part 1 of the Consumer Rights Act 2014 applies.”

49 In section 11J (implied terms about quality or fitness in contracts for hire of
15goods) omit subsections (3A) to (3C) and (10).

50 Omit Part 1B (additional rights of transferee in consumer cases).

51 In section 12 (the contracts concerned: supply of services, as respects
England and Wales and Northern Ireland), in subsection (1) at the end insert
“, other than a contract to which Chapter 4 of Part 1 of the Consumer Rights
20Act 2014 applies.”

52 (1) Section 18 (interpretation: general) is amended as follows.

(2) In subsection (1) omit the definitions of “producer” and “repair”.

(3) Omit subsection (4).

Sale and Supply of Goods to Consumers Regulations 2002 (S.I. 2002/3045S.I. 2002/3045)

53 25The Sale and Supply of Goods to Consumers Regulations 2002 are revoked.

Regulatory Enforcement and Sanctions Act 2008 (c. 13)2008 (c. 13)

54 In Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008
(enactments specified for the purposes of Part 1), at the appropriate place
insert—

• 30“Consumer Rights Act 2014, Part 1”.

Consequential repeal and revocation

55 In consequence of the amendments made by this Schedule—

(a) omit paragraph 5(9) of Schedule 2 to the Sale and Supply of Goods
Act 1994, and

(b) 35omit paragraph 97 of Schedule 2 to the Consumer Protection from
Unfair Trading Regulations 2008 (SI 2008/1277SI 2008/1277).

Section 63

SCHEDULE 2 Consumer contract terms which may be regarded as unfair

Part 1 List of terms

1 5A term which has the object or effect of excluding or limiting the trader’s
liability in the event of the death of or personal injury to the consumer
resulting from an act or omission of the trader.

2 A term which has the object or effect of inappropriately excluding or limiting
the legal rights of the consumer in relation to the trader or another party in
10the event of total or partial non-performance or inadequate performance by
the trader of any of the contractual obligations, including the option of
offsetting a debt owed to the trader against any claim which the consumer
may have against the trader.

3 A term which has the object or effect of making an agreement binding on the
15consumer in a case where the provision of services by the trader is subject to
a condition whose realisation depends on the trader’s will alone.

4 A term which has the object or effect of permitting the trader to retain sums
paid by the consumer where the consumer decides not to conclude or
perform the contract, without providing for the consumer to receive
20compensation of an equivalent amount from the trader where the trader is
the party cancelling the contract.

5 A term which has the object or effect of requiring that, where the consumer
decides not to conclude or perform the contract, the consumer must pay the
trader a disproportionately high sum in compensation or for services which
25have not been supplied.

6 A term which has the object or effect of requiring a consumer who fails to
fulfil his obligations under the contract to pay a disproportionately high sum
in compensation.

7 A term which has the object or effect of authorising the trader to dissolve the
30contract on a discretionary basis where the same facility is not granted to the
consumer, or permitting the trader to retain the sums paid for services not
yet supplied by the trader where it is the trader who dissolves the contract.

8 A term which has the object or effect of enabling the trader to terminate a
contract of indeterminate duration without reasonable notice except where
35there are serious grounds for doing so.

9 A term which has the object or effect of automatically extending a contract
of fixed duration where the consumer does not indicate otherwise, when the
deadline fixed for the consumer to express a desire not to extend the contract
is unreasonably early.

10 A term which has the object or effect of irrevocably binding the consumer to
terms with which the consumer has had no real opportunity of becoming
acquainted before the conclusion of the contract.

11 A term which has the object or effect of enabling the trader to alter the terms
5of the contract unilaterally without a valid reason which is specified in the
contract.

12 A term which has the object or effect of permitting the trader to determine
the characteristics of the subject matter of the contract after the consumer has
become bound by it.

13 10A term which has the object or effect of enabling the trader to alter
unilaterally without a valid reason any characteristics of the goods, digital
content or services to be provided.

14 A term which has the object or effect of giving the trader the discretion to
decide the price payable under the contract after the consumer has become
15bound by it, where no price or method of determining the price is agreed
when the consumer becomes bound.

15 A term which has the object or effect of permitting a trader to increase the
price of goods, digital content or services without giving the consumer the
right to cancel the contract if the final price is too high in relation to the price
20agreed when the contract was concluded.

16 A term which has the object or effect of giving the trader the right to
determine whether the goods, digital content or services supplied are in
conformity with the contract, or giving the trader the exclusive right to
interpret any term of the contract.

17 25A term which has the object or effect of limiting the trader’s obligation to
respect commitments undertaken by the trader’s agents or making the
trader’s commitments subject to compliance with a particular formality.

18 A term which has the object or effect of obliging the consumer to fulfil all of
the consumer’s obligations where the trader does not perform the trader’s
30obligations.

19 A term which has the object or effect of allowing the trader to transfer the
trader’s rights and obligations under the contract, where this may reduce the
guarantees for the consumer, without the consumer’s agreement.

20 A term which has the object or effect of excluding or hindering the
35consumer’s right to take legal action or exercise any other legal remedy, in
particular by—

(a) requiring the consumer to take disputes exclusively to arbitration
not covered by legal provisions,

(b) unduly restricting the evidence available to the consumer, or

(c) imposing on the consumer a burden of proof which, according to the
applicable law, should lie with another party to the contract.

Part 2 Scope of Part 1

5Financial services

21 Paragraph 8 (cancellation without reasonable notice) does not include a term
by which a supplier of financial services reserves the right to terminate
unilaterally a contract of indeterminate duration without notice where there
is a valid reason, if the supplier is required to inform the consumer of the
10cancellation immediately.

22 Paragraph 11 (variation of contract without valid reason) does not include a
term by which a supplier of financial services reserves the right to alter the
rate of interest payable by or due to the consumer, or the amount of other
charges for financial services without notice where there is a valid reason,
15if—

(a) the supplier is required to inform the consumer of the alteration at
the earliest opportunity, and

(b) the consumer is free to dissolve the contract immediately.

Contracts which last indefinitely

23 20Paragraphs 11 (variation of contract without valid reason), 12
(determination of characteristics of goods etc after consumer bound) and 14
(determination of price after consumer bound) do not include a term under
which a trader reserves the right to alter unilaterally the conditions of a
contract of indeterminate duration if—

(a) 25the trader is required to inform the consumer with reasonable notice,
and

(b) the consumer is free to dissolve the contract.

Sale of securities, foreign currency etc

24 Paragraphs 8 (cancellation without reasonable notice), 11 (variation of
30contract without valid reason), 14 (determination of price after consumer
bound) and 15 (increase in price) do not apply to—

(a) transactions in transferable securities, financial instruments and
other products or services where the price is linked to fluctuations in
a stock exchange quotation or index or a financial market rate that
35the trader does not control, and

(b) contracts for the purchase or sale of foreign currency, traveller’s
cheques or international money orders denominated in foreign
currency.

Price index clauses

25 40Paragraphs 14 (determination of price after consumer bound) and 15
(increase in price) do not include a term which is a price-indexation clause
(where otherwise lawful), if the method by which prices vary is explicitly
described.

Section 70

SCHEDULE 3 Enforcement of the law on unfair contract terms and notices

Application of Schedule

1 This Schedule applies to—

(a) 5a term of a consumer contract,

(b) a term proposed for use in a consumer contract,

(c) a term which a third party recommends for use in a consumer
contract, or

(d) a consumer notice.

10Consideration of complaints

2 (1) A regulator may consider a complaint about a term or notice to which this
Schedule applies (a “relevant complaint”).

(2) If a regulator other than the CMA intends to consider a relevant complaint,
it must notify the CMA that it intends to do so, and must then consider the
15complaint.

(3) If a regulator considers a relevant complaint, but decides not to make an
application under paragraph 3 in relation to the complaint, it must give
reasons for its decision to the person who made the complaint.

Application for injunction or interdict

3 (1) 20A regulator may apply for an injunction or (in Scotland) an interdict against
a person if the regulator thinks that—

(a) the person is using, or proposing or recommending the use of, a term
or notice to which this Schedule applies, and

(b) the term or notice falls within any one or more of sub-paragraphs (2),
25(3) or (5).

(2) A term or notice falls within this sub-paragraph if it purports to exclude or
restrict liability of the kind mentioned in—

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

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

(c) 30section 57 (exclusion of liability: services contracts), or

(d) section 65(1) (business liability for death or personal injury resulting
from negligence).

(3) A term or notice falls within this sub-paragraph if it is unfair to any extent.

(4) A term within paragraph 1(1)(b) or (c) (but not within paragraph 1(1)(a)) is
35to be treated for the purposes of section 62(4) and (5) (assessment of fairness)
as if it were a term of a contract.

(5) A term or notice falls within this sub-paragraph if it breaches section 68
(requirement for transparency).

(6) A regulator may apply for an injunction or interdict under this paragraph in
40relation to a term or notice whether or not it has received a relevant
complaint about the term or notice.

Notification of application

4 (1) Before making an application under paragraph 3, a regulator other than the
CMA must notify the CMA that it intends to do so.

(2) The regulator may make the application only if—

(a) 5the period of 14 days beginning with the day on which the regulator
notified the CMA has ended, or

(b) before the end of that period, the CMA agrees to the regulator
making the application.

Determination of application

5 (1) 10On an application for an injunction under paragraph 3, the court may grant
an injunction on such conditions, and against such of the respondents, as it
thinks appropriate.

(2) On an application for an interdict under paragraph 3, the court may grant an
interdict on such conditions, and against such of the defenders, as it thinks
15appropriate.

(3) The injunction or interdict may include provision about—

(a) a term or notice to which the application relates, or

(b) any term of a consumer contract, or any consumer notice, of a similar
kind or with a similar effect.

(4) 20It is not a defence to an application under paragraph 3 to show that, because
of a rule of law, a term to which the application relates is not, or could not
be, an enforceable contract term.

(5) If a regulator other than the CMA makes the application, it must notify the
CMA of—

(a) 25the outcome of the application, and

(b) if an injunction or interdict is granted, the conditions on which, and
the persons against whom, it is granted.

Undertakings

6 (1) A regulator may accept an undertaking from a person against whom it has
30applied, or thinks it is entitled to apply, for an injunction or interdict under
paragraph 3.

(2) The undertaking may provide that the person will comply with the
conditions that are agreed between the person and the regulator about the
use of terms or notices, or terms or notices of a kind, specified in the
35undertaking.

(3) If a regulator other than the CMA accepts an undertaking, it must notify the
CMA of—

(a) the conditions on which the undertaking is accepted, and

(b) the person who gave it.

40Publication, information and advice

7 (1) The CMA must arrange the publication of details of—