Consumer Law: Distance Selling - Essay Example

Consumer Law (distance Selling) Case Law 1 Introduction "Selling and buying of a product "turned to be a situation that we all come across every day, including having your milk delivered, getting a tap fixed, your car repaired - in fact any situation where someone is doing something for you, rather than just handing over a product. As with buying goods, the law has decided that the consumers need some extra protection from the sellers, i.e. the sellers should act with reasonable care and skill and in a reasonable time, for a reasonable charge. It is all very well to say that someone has a legal right, either under basic contract law, when someone fails to do what they say they are going to do, or under consumer protection legislation. The various legislations related to the consumer law protect the rights of a person as a consumer, whether it is of dispute regarding the sale and purchase of the goods/services, or it is of dispute regarding the quality of the goods. As a consumer, a person's rights are expressed as a series of "guarantees" that a seller automatically makes to you when you buy any good or service ordinarily purchased for personal use.(1)Apart from these dimensions of the dispute , the consumer law protects the rights of those consumers who engage in the distance selling. The concept of distance selling includes the selling and buying of the goods/services through the phone. mail etc. An increasing range of goods and services are available to consumers1 shopping in these ways2. The Businesses that normally sell by distance means, the have systems in place for trading in this way.(DSR)(2) the concept of distance selling always includes those elements specified in consumer protection acts. Like any other consumer law provisions, it needs a consumer, business; contracts-it should be a distance contract, financial service, Supplier, Working days regarding the business. ------------------------------------------------------------------------------------------------------------ 1. The Sale of Goods Act 1979 2. The Distance Selling Regulation Act 2000 2 Now we shall look into the relevancy of the concepts, consumer's rights, distance selling and scope of gift under the consumer law in the given case. In given case, Sophie was given diamond ring by her aunt which was later modified by herself has been stolen by Lee, the burglar. Later on Sophie discovered this particular ring in Ebay from whom she came to know that the same has been kept for the exhibition by one Evan, who received this ring from his US based aunty .At present the ring is with the sandy who is the fianc of Evan. The issue in the problem is whether Sophie has to face any obstacles, if decided to recover the ring from Sandy and if so, what may be those obstacles. Before stumble on the barriers, first we shall look upon the possible claims which can be raised by Sophie to recover the ring under various provision of the law. Since the particular ring was examined by the experts before the resetting, Sophie has enough evidence to prove the ring is possessed by her through the witness's testimony. Moreover The photographs of the original pattern of ring has been taken .So the connection of original and modified rings can clearly be proved.(evi)(3) Moreover, Sophie can claim the possession of the ring on the basis of report of Birmingham Jewellery Quarter where she valued the ring as well as on the report of insurance company where the ring was insured. The company has already compensated her also. Apart from this, Lee the burgler already pleaded guilty about the stolen ring among other thing, even though he has given vague statement on this matter. The enquiries by the Ebay also showed that ring was owned by them originally, but a seller, Ewan had sold the same to EBay. It is to be remembered that Ewan obtained the ring from his Aunt Bertha who was staying US. Hence the question here arise that can Sophie recovers the particular ring from -------------------------------------------------------------------------------------------------------- 3. 3 sandy, who is the fiance of Julian who has purchased the ring in auction for sandy and sandy is still wearing the ring. Another issue in this situation is whether Sophie can prove the transaction between Ewan and Bertha is legally valid since it is a type of distance selling. Even though Sophie can recover the ring as per the above said context; she has many barriers to tackle out for this purpose. It is true that Lee has stolen the ring and sold it somewhere. Bertha must be bought the ring through the distance selling from UK, since she had been staying US. So before Sophie claims the possession of the ring, some provisions of distance selling should be checked first. Here it can clearly confirm that Sophie can rely on the general rule that when goods are stolen, the original owner still retains their legal right of ownership over the goods. When stolen goods are found a court, if necessary, can order the return of the goods or a compensation payment for the value of the article to be made to the original owner. If someone gets stolen goods, even if they have paid a fair price and are unaware that the goods were stolen, the general rule is that the person with the goods does not usually get a legal right of ownership. The person with the goods must inform the owner and allow them to take them away, if they discover that they were stolen. Someone who buys goods, which they later find out were stolen, could try to claim compensation from the seller. So it is likely to happen that the last buyer, Julian has to give back the ring to Sophie, since the circumstances show that the ring is the stolen property and Julian has bought the without the knowledge that the ring is being stolen.But there are some difficulty in this to back the ring to the original owner as there were some transactions are occurred in middle of this. We shall examine how far these transactions affect Sophie in possessing the ring back. ------------------------------------------------------------------------------------------------------------ 4 Scope of Distance selling (5) The Distance Selling Directive (97/7/EC) was implemented into the United Kingdom on 31st October 2000 as the Consumer Protection (Distance Selling) Regulations (SI2000/2334). The Distance Selling Regulations (DSRs) are the rules that apply if you are selling products or services to consumers without face-to-face contact, and where the consumer has not had an opportunity to examine the goods before buying or discuss the service in person. One aim of the Directive is to ensure that consumers enjoy the same minimum level of protection no matter where a supplier is based in the EU. If the distance sales are taking place for the consumers in other member states you should be aware that the Directive may have been implemented differently elsewhere in the EU. Under the Regulations, consumers shopping for goods and services by telephone, mail order, fax, interactive TV, the internet and other types of distance communication are given rights to receive certain information, a cancellation period of seven working days, and protection against fraudulent use of a credit card.(dti)(6) In order to meet the requirements of distance selling, the scope of distance contract is important. "Distance contract" means any contract concerning goods or services concluded between a supplier and a consumer under an organized distance sales or service provision scheme run by the supplier who, for the purpose of the contract, makes exclusive use of one or more means of distance communication up to and including the moment at which the contract is concluded". If you sell goods or services by distance means outside the EU you may need to take legal advice to ensure that you comply with the legal requirements in non-EU countries. Moreover this kind of selling must be in accordance with the requirements of the contract, i.e. Offer - one party must contract with the other, for example, offer to buy goods. Secondly the acceptance - the ---------------------------------------------------------------------------------------------------------- 5. Distance selling regulation 2000, The Distance Selling Directive (97/7/EC) 6. Distance selling rules: draft guidance from the OFT 5 other party must expressly accept the offer. Thirdly intention to create legal relations - both parties to the contract must intend the contract to be legally binding. And fourthly the Consideration - there should be some consideration being exchanged between the parties, for example, money paid for goods. There is no requirement for contracts to be in writing or for the parties to actually sign a contract. Since the law in the United Kingdom insists no general requirement for commercial transactions to be carried out in writing and it can follow the principles of good faith, the scope of distance selling gains advantage from this. In Walford v Miles, (1212 [1992] 2 AC 128, 138) it was enumerated that the concept of a duty to carry on negotiations in good faith is inherently repugnant to the adversarial position of the parties when involved in negotiations. A duty to negotiate in good faith is as unworkable in practice as it is inherently inconsistent with the position of a negotiating party has no legal content. Any sort of contract, as everybody knows, compromises four elements, all of which need to be present for the contract to be legally binding and enforceable. However the distance selling regulations are not applicable in the following cases. 1. Business to business contracts 2. Financial services sold at a distance. These are covered by the Financial Services (Distance Marketing) Regulations 2004 3. Contracts for the sale of land - although the regulations do apply to consumer rental agreements 4. Products bought from vending machines 5. Goods or services bought at an auction with an auctioneer (7) Now we look upon how the scope and concept of distance selling may cause hindrance to the claims of Sophie for her ring. She could have forwarded a claim for the ------------------------------------------------------------------------------------------------------------ 7. Sec. 5 of Consumer protection (Distance selling) regulation 2000 6 ring on the basis of "unlawful transaction "of the ring from one country to another country. But since the legislation enacted the regulations regarding the distance selling, smooth transaction of goods are resulted through via phone, mails etc.. Here in this case, Bertha must be possessed the ring using this mode as she was in US. She must be followed all the rule of the act also. There must have distance contract .Since the writing is not necessary for the contract in this case, the transaction might be on the basis of good faith which is also the part of the contract. Secondly, the transaction of the ring is completely out of the exceptions enumerated in Sec.5 of the distance selling regulation. So here, Sophie may find difficulties to claim the possession of the ring by arguing the sale from one country to another country is invalid. Apart from this, she may find obstacles in possessing the ring in accordance with the rule of auction law (Brian Harvey and Frank Meisel ,2006)(8) if she put forward the claim against EBay as it kept the ring for the auction from which Julian shopped the ring. Now we shall examine whether the auction taken place in EBay is valid or not and whether Sophie can move to call off the validity of the auction. For this let's explore the scope of auction under consumer and commercial law. Consumer law and Auction of goods The 1979 Sale of Goods Act gives the consumer certain rights. When somebody buys something it must match its description, be of satisfactory quality, and fit for its purpose. However, if the goods are second hand, however, if it is bought at an auction it is possible to lose these rights. In the case where the item proved to be unsafe, caused damage or if the auction house has been negligent or made a false statement about the item, claimant can be entitled to get compensation. At an auction, the buyer enters in to a contract with the owner of the goods, not ----------------------------------------------------------------------------------------------------------- 8. Auctions Law and Practice, Brian Harvey and Frank Meisel, 2006 7 the auctioneer. This means that if there is a problem with the goods, usually the owner is liable to answer the queries about the goods, not the auction house. The auction house is not obliged to give you the owner's details, so tracing the owner can be difficult. However, the auction house does have some responsibilities; for example, it must not make a false statement about the goods. If the auction house knowingly made a false statement about the goods in order to persuade the clients to buy them, then they are liable to compensate the claimant. These responsibilities should be explained in the terms of business of the auction house which must be displayed. Moreover if you feel the goods were seriously misdescribed, then you can attempt to return the goods. (Advice guide, 2007)(9) These are the basic rules regarding the auction under consumer law. Now we shall look upon the significance of this rule in the claim of Sophie. Since Ewan sold the ring to the EBay, they only know the whereabouts of Ewan and they have no knowledge of ring being stolen. As an auctioneer, Ebay can only give the details of Ewan, who is considered to be the right owner of the ring. So here also Sophie may loose the grounds to claim the possession of the ring. Keeping lost, found and uncollected goods Since this particular ring was sold somewhere in Ruby a regular in his local pub and others to a pawnbrokers "Lucky Money" in Birmingham city centre, it can not be in the category of uncollected goods. But this information explains the rights of someone who finds, or comes into possession of, another person's goods. Even though Lee sold the ring in above said places; it was their duty to find out the source of this particular good. The law enacts that if a particular goods needs to be kept in the possession it should be found out whether the goods are uncollected or abandoned stolen ,lost ,treasure and goods found in the sea or on the seashore. ------------------------------------------------------------------------------------------------------------ 9.Advice Guide, Citizen Advice, National Association of Citizens Advice Bureaux,2007 8 The law empowers the finder of the goods to sell if they remain uncollected, as long as:- the original owner is responsible for collecting the goods. The goods cannot be sold if it is the finder's responsibility to return them; but it is to be remembered that the owner only loses their right to the money after six years; and the finder follows the correct procedure. If the goods are sold they will then legally belong to the purchaser. (Advice Guide,2007) Emphasising on the above the provisions of law gives a little time to Sophie to sigh .Sophie can put forward a claim that the so called stolen property as the original taker of the ring has not taken any steps to find out the fact whether the ring is stolen or not. In 2004 she lost the ring and in 2006 she could make out it. The maximum period given to the finder of the good to sell is 6 years, but is only 2 years in which an action being going to be taken. Conclusion Sophie has good grounds to claim her ring as per other laws .But in consumer law she has some obstacles to recover the ring as is is already purchased by another on account of all sale made in middle of this occurred are legal, whether it is distance selling, or it is actual sale made between the parties. Rule of distance selling which says that whether the requirements of the DSRs need to be applied at the initial agreement or successive stages of each of the individual 'agreements' in a series would depend on the terms and conditions of the contract. If each successive agreement is considered to be a separate agreement then the information giving provisions may apply. Each case would need to be examined on its merits. Eventhough Sophie faces such obstacles as consumer to rise a claim ,the above said rule may help her. ****************************** Bibliography 1. Davies, Iwan (2005) Issues in International Commercial Law, (Ed.) Hampshire, England, and Burlington, Vermont: Ashgate Publishing Co. 246pp. Hardback. $124.95/65.00/114.00. ISBN: 0754624625. 2. Dti (sep.2006) a guide for business on distance selling, Office of Fair Trading, Vol. 15 No.9 (September 2005), pp.847-849 3. Harvey, Brian and Meisel (2006), Frank, Auctions Law and Practice, Third EditionISBN-13: 978-0-19-926616-6 Publication date: 23 March 2006 4. Jennings, Barry (2007), Guide to the Distance Selling Regulations in the UK, Bird and Bird guide to the int. commercial law, 23-10-07 5. Rogers, Kevin M, (2007), the changes to the Distance Selling Regulations - are they likely to rock the boat Hertfordshire Law Journal 3(2), 45-54 Statutes 6. The Consumer Protection (Distance Selling)(Amendment) Regulations 2005 7. Consumer Protection (Distance Selling) Regulations 2000 8. The Consumer Protection Act 1987 (Commencement No. 1) Order 1987 9. The Electronic Commerce (EC Directive) Regulations 2002(SI 2002/2013) 10. The Sale of Goods Act 1979 Journals and Publications 11. Auction Law, (2007) Advice Guide, Citizen Advice, National Association of Citizens Advice Bureau, 12. Distance selling rules: draft guidance from the OFT (2005), OUT-LAW News, 22/08/2005 Read More