Consumer Rights Bill (HL Bill 64)

(2) If the breach giving the consumer the right to a refund affects only some of the
digital content supplied under the contract, the right to a refund does not
extend to any part of the price attributable to digital content that is not affected
by the breach.

(3) 5A refund 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.

(4) The trader must give the refund using the same means of payment as the
consumer used to pay for the digital content, unless the consumer expressly
10agrees otherwise.

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

Compensation for damage to device or to other digital content

47 Remedy for damage to device or to other digital content

(1) This section applies if—

(a) 15a trader supplies digital content to a consumer under a contract,

(b) the digital content causes damage to a device or to other digital content,

(c) the device or digital content that is damaged belongs to the consumer,
and

(d) the damage is of a kind that would not have occurred if the trader had
20exercised reasonable care and skill.

(2) If the consumer requires the trader to provide a remedy under this section, the
trader must either—

(a) repair the damage in accordance with subsection (3), or

(b) compensate the consumer for the damage with an appropriate
25payment.

(3) To repair the damage in accordance with this subsection, the trader must—

(a) repair the damage within a reasonable time and without significant
inconvenience to the consumer, and

(b) bear any necessary costs incurred in repairing the damage (including in
30particular the cost of any labour, materials or postage).

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

(a) the nature of the device or digital content that is damaged, and

(b) the purpose for which it is used by the consumer.

(5) 35A compensation payment under this section must be made 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 the payment.

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

(7) A consumer with a right to a remedy under this section may bring a claim in
40civil proceedings to enforce that right.

(8) The Limitation Act 1980 and the Limitation (Northern Ireland) Order 1989 (SI
1989/1339 (NI 11)) apply to a claim under this section as if it were an action
founded on simple contract.

(9) The Prescription and Limitation (Scotland) Act 1973 applies to a right to a
remedy under this section as if it were an obligation to which section 6 of that
Act applies.

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

48 5Liability that cannot be excluded or restricted

(1) A term of a contract to supply digital content is not binding on the consumer
to the extent that it would exclude or restrict the trader’s liability arising under
any of these provisions—

(a) section 35 (digital content to be of satisfactory quality),

(b) 10section 36 (digital content to be fit for particular purpose),

(c) section 37 (digital content to be as described), or

(d) section 42 (trader’s right to supply digital content).

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

(a) 15exclude or restrict a right or remedy in respect of a liability under a
provision listed in subsection (1),

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

(c) allow a trader to put a person at a disadvantage as a result of pursuing
20such a right or remedy, or

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

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

(4) An agreement in writing to submit present or future differences to arbitration
25is not to be regarded as excluding or restricting any liability for the purposes
of this section.

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

(6) For provision limiting the ability of a trader under a contract within section 47
to exclude or restrict the trader’s liability under that section, see section 63.

CHAPTER 4 30Services

What services contracts are covered?

49 Contracts covered by this Chapter

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

(2) 35That does not include a contract of employment or apprenticeship.

(3) In relation to Scotland, this Chapter does not apply to a gratuitous contract.

(4) A contract to which this Chapter applies is referred to in this Part as a “contract
to 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) The power in subsection (5) includes power to provide that a provision of this
5Chapter does not apply in relation to a service of a description specified in the
order in the circumstances so specified.

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

(8) No order may be made under subsection (5) unless a draft of the statutory
10instrument 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?

50 Service 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
15trader must perform the service with reasonable care and skill.

(2) See section 55 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 Information 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
20contract 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
contract, or

(b) it is taken into account by the consumer when making any decision
25about 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) anything that qualified it and was said or written to the consumer by
the trader on the same occasion, and

(b) 30any change to it that has been expressly agreed between the consumer
and the trader (before entering into the contract or later).

(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
35treated as included as a term of the contract.

(4) A 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 55 for a consumer’s rights if the trader is in breach of a term that
40this section requires to be treated as included in a contract.

52 Reasonable 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
5does not say how it is to be fixed, and

(c) anything that is to be treated under section 51 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) 10What is a reasonable price is a question of fact.

53 Service 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) 15information that is to be treated under section 51 as included in the
contract 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) 20See section 55 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.

54 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) 25This Chapter is subject to any other enactment which defines or restricts the
rights, duties or liabilities arising in connection with a service of any
description.

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

55 Consumer’s rights to enforce terms about services

(1) 30The consumer’s rights under this section and sections 56 and 57 do not affect
any rights that the contract provides for, if those are not inconsistent.

(2) In this section and section 56 a reference to a service conforming to a contract
is a reference to—

(a) the service being performed in accordance with section 50, or

(b) 35the service conforming to a term that section 51 requires to be treated
as included in the contract and that relates to the performance of the
service.

(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) 40the right to require repeat performance (see section 56);

(b) the right to a price reduction (see section 57).

(4) If the trader is in breach of a term that section 51 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 57 for provisions about that right and
5when it is available).

(5) If the trader is in breach of what the contract requires under section 53
(performance within a reasonable time), the consumer has the right to a price
reduction (see section 57 for provisions about that right and when it is
available).

(6) 10This section and sections 56 and 57 do not prevent the consumer seeking other
remedies for a breach of a term to which any of subsections (3) to (5) applies,
instead 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
15in the circumstances—

(a) claiming damages;

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

(c) seeking specific performance;

(d) 20seeking an order for specific implement;

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

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

56 Right to repeat performance

(1) The right to require repeat performance is a right to require the trader to
25perform the service again, to the extent necessary to complete its performance
in conformity with the contract.

(2) If 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) 30must bear any necessary costs incurred in doing so (including in
particular the cost of any labour or materials).

(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
35be determined taking account of—

(a) the nature of the service, and

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

57 Right to price reduction

(1) The right to a price reduction is the right to require the trader to reduce the
40price to the consumer by an appropriate amount (including the right to receive
a 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) because of section 56(3) the consumer cannot require repeat
performance; or

(b) 5the consumer has required repeat performance, but the trader is in
breach of the requirement of section 56(2)(a) to do it within a reasonable
time and without significant inconvenience to the consumer.

(4) A 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
10the 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
otherwise.

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

15Can a trader contract out of statutory rights and remedies under a services contract?

58 Liability that cannot be excluded or restricted

(1) 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
(service to be performed with reasonable care and skill).

(2) 20Subject to section 51(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 51 (information about trader or service to be binding).

(3) A 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
2550 and 51 and, where they apply, sections 52 and 53 (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
not 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
30the consumer to the extent that it would —

(a) exclude or restrict a right or remedy in respect of a liability under any
of sections 50 to 53,

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

(c) 35allow 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
include preventing an obligation or duty arising or limiting its extent.

(6) 40An 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

59 Powers of the court

(1) In any proceedings in which a remedy is sought by virtue of section 19(3) or (4),
43(2) or 55(3), the court, in addition to any other power it has, may act under
5this section.

(2) On the application of the consumer the court may make an order requiring
specific performance or, in Scotland, specific implement by the trader of any
obligation imposed on the trader by virtue of section 23, 44 or 56.

(3) Subsection (4) applies if—

(a) 10the consumer claims to exercise a right under the relevant remedies
provisions, but

(b) the 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) 15If 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
use, 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) 20The 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
thinks just.

(8) The “relevant remedies provisions” are—

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

(b) 25where Chapter 3 applies, sections 44 and 45;

(c) where Chapter 4 applies, sections 56 and 57.

60 Interpretation

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

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

• “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
  35and repealing Council Directive 85/577/EEC and Directive 97/7/EC
  of 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)

  40introducing individuals who want to obtain credit to persons
  carrying on any business so far as it relates to the provision of
  credit,

  Consumer Rights BillPage 37

  (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)

  introducing individuals who want to obtain credit, or to obtain
  5goods on hire, to other persons engaged in credit brokerage;

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

• “enactment” includes—

  (a)

  an enactment contained in subordinate legislation within the
  10meaning 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
  Act of the Scottish Parliament, and

  (d)

  15an 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)

  the importer into the European Economic Area, or

  (c)

  20any 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.

(2) References in this Part to treating a contract as at an end are to be read in
accordance with section 19(13).

61 25Changes to other legislation

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

Part 2 Unfair terms

What contracts and notices are covered by this Part?

62 30Contracts and notices covered by this Part

(1) This 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) 35This Part applies to a notice to the extent that it—

(a) relates 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
expressed 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
5notice”.

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

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

63 Requirement for contract terms and notices to be fair

(1) 10An unfair term of a consumer contract is not binding on the consumer.

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

(3) This 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
15significant imbalance in the parties’ rights and obligations under the contract
to the detriment of the consumer.

(5) Whether 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
20and to all of the other terms of the contract or of any other contract on
which it depends.

(6) A 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.

(7) 25Whether 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
which it depends.

(8) 30This section does not affect the operation of—

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

(b) section 48 (exclusion of liability: digital content contracts),

(c) section 58 (exclusion of liability: services contracts), or

(d) section 66 (exclusion of negligence liability).

64 35Contract 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) Part 1 of Schedule 2 is subject to Part 2 of that Schedule; but a term listed in Part
402 of that Schedule may nevertheless be assessed for fairness under section 63
unless section 65 or 74 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
Schedule.

(4) An order under subsection (3) may contain transitional or transitory provision
5or 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,
each House of Parliament.

(6) A term of a consumer contract must be regarded as unfair if it has the effect that
10the 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) In subsection (6)—

• “the Distance Marketing Directive” means Directive 2002/65/EC of the
  15European 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
  98/27/EC;

• “distance supplier” means—

  (a)

  20a supplier under a distance contract within the meaning of the
  Financial Services (Distance Marketing) Regulations 2004 (SI
  2004/2095), or

  (b)

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

• 25“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
  (Distance Marketing) Regulations 2004;

• “rule” means a rule made by the Financial Conduct Authority or the
  30Prudential 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.

65 Exclusion from assessment of fairness

(1) A term of a consumer contract may not be assessed for fairness under section
3563 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
contract by comparison with the goods, digital content or services
supplied under it.

(2) 40Subsection (1) excludes a term from an assessment under section 63 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
intelligible 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
45consumer’s attention in such a way that an average consumer would be aware
of the term.