The Remedies Available to a Consumer In Case of Faulty Goods - Essay Example

Consumer Law Introduction At present, UK consumers are covered under a legal "right to reject" defective commodities. This entails them with a right for a refund but only if they act in “a reasonable time”. By disparity, under the European Consumer Sales Directive, users’ first refuge is to repair or replacement. In addition in October 2008, the European Commission issued a scheme for a new ruling on user rights which, if followed as promulgated, will only lead to the abolition of the right to reject in UK. The Remedies available to a consumer in case of faulty goods: The remedies that a consumer can avail for faulty goods previously are contained in Art.26 of the proposed Consumer Rights Directive. Even though it extends the two-stage chain of remedies in Art.3 of the Consumer Rights Directive, this Article is an absolute revision of the former provision. The pressing consequence is that the new proviso is possibly less composite and thus easier to read; but the benefit is simply outbalanced by the substantial alterations made to the remedies. Many of these remedies are or may be detriment to the consumers. Actually, it is in the background of the remedies where user protection would be trimmed back under the proposed Consumer Rights Directive full harmonisation scheme. Under the Sale of Goods Act 1979 the purchasers’ right to a refund is restricted by Section 11 (4). This section states that the right to reject the goods by the purchaser depends on his acceptance of the goods. But as soon as acceptance takes place then the contract is complete and this will reduce the buyer’s right to a lesser claim of damages. Once acceptance has taken place, the buyer’s contractual claim is reduced to breach of warranty affording the buyer the lesser claim of damages. These are assessed as the difference in the value of the goods at the time of delivery and the value they would have had if they had conformed to the contract. In practice, these will usually amount to the cost of repairs. Claims for consequential losses are also allowed in accordance with the principles of the general law of contract. The meaning of acceptance is given under SS 34 and 35 of the Sale of Goods Act 1979. Section 34 calls for the vendor, on petition, to provide the buyer a reasonable chance to inspect the goods. Section 35 lays down the rules for acceptance which can be completed in three ways: 1. The purchaser to communicate to the seller that their goods are accepted; 2. The consumer can do something with the commodities that is discrepant with the vendor’s possession; and 3. The user can hold back the goods after a reasonable time is over without informing the vendor that the goods have been refused. With regard to consumer transactions, the third kind, that is acceptance after the lapse of a reasonable time, is a very common type of acceptance. The query of what is a reasonable time is a problem of fact. Conversely, a material aspect in finding out if a reasonable time has passed is after the purchaser gets ample time to examine the goods. Furthermore, purchasers will not lose the right to reject merely for the reason that they have corresponded to a repair by the vendor seller. The leading case for several years was Bernstein v Pamson Motors (Golders Green) Limited.1 This case was actually unusual because the petitioner pulled off to get financial backing for his case from the Automobile Association. The facts of the case were that Leslie Bernstein purchased a new car on 7 December 1984. The car had a break down on 3 January 1985. He refused the car on 4 January after the car had covered only 140 miles. It was held by Rougier J that the consumer had lost the right to reject in just three weeks ignoring a period in which he was ill. Rougier J pointed out in this case that the authentic time taken to find out the defect was irrelevant. What counted was that the user had “a reasonable time to try out the goods in general terms.” In the course of his judgment in this case Rougier J. was inclined by the intricacy of the purpose of the goods. He thus made it obvious that “what is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine.” Actually in deciding the above case Rougier J made use of both the objective approach as well as the subjective approach. The objective approach was when he took into consideration the notion of reasonable time and the subjective matter was with regard to Leslie Bernstein’s illness. Also since the case was decided 1994 implementation of the amendments the reasoning was not a material factor then. But in 2003, the Court of Appeal resolved in Clegg v Anderson2 that the Bernstein verdict was no more a good law. In this case, Clegg was permitted to his right to reject a faulty yacht even after eight months had passed after the purchase. Apart from this there are many cases in other departments of the law like hire purchase. The case of Farnsworth Finance Facilities v Attryde3 exemplifies the deviation in approach. Attryde purchased a motor cycle on hire purchase terms. The fomite was faulty and had to be fixed for damages several times. After 4 months and 4,000 miles the chain of the motor cycle broke. Attryde productively rejected the motor cycle and was granted a full refund. The Court of appeal made it obvious that the facility to reject at common law reckons on whether the consumer has confirmed the contract. It was settled that Attryde had not confirmed since he had not chosen to go on with the contract in full awareness of the defects. He was consequently allowed to a full refund even after a lapse of four months but no allowance was specified for use because the problem he had under gone as a result of repeated faults and repairs was not major. Remedies available under UK The conventional UK remedies were initially codified in 1893. As years passed on these conventional rules were changed and now they can be noticed in the Sale of Goods Act 1979. Fundamentally, the consumer is permitted to refuse faulty goods and end the contract. The consumer can then decline to pay or claim for a full refund in case he has already paid for the goods. But for claims to be made the consumer on his part has to act quickly. The reason is that the right to reject will be lost as soon as the consumer deems to have accepted the goods. This normally takes place “after the lapse of a reasonable time”.4 But once the user misses the reasonable time then he will be entitled only to damages. Several cases have been decided with regard to reasonable time but they all seem to provide with very little guidance as to how long the reasonable time lasts. There was a case in which a user accepted a new car in a period of less than four5 weeks while another case was with regard to the rejecting of a car after a lapse of seven6 months. A logical time is a question of fact, when the time needed to examine the goods and for the dealings between the parties occur is taken into account. Actually the Law Commissions wanted a right to reject which would last for 30 days by default. They recommended as "We recommend that in normal circumstances, a consumer should have 30 days to return faulty goods and receive a refund, with flexibility built in for special circumstances such as perishable goods, or goods which both parties know will not be used for some time” (http://www.out-law.com/page-10515 retrieved on 1st May, 2010). The Hon Lord Drummond Young, Chairman of the Scottish Law Commission, stated as: “Legal advice is rarely sought for consumer disputes so it is particularly important that the law on consumer remedies is easily understood, remembered and applied. Our proposals will result in a considerable simplification of the law” (http://www.out-law.com/page-10515 retrieved on 1st May, 2010). Apart from this the Law Commission also stated that the Government must also take steps to assure that the users are aware of their legal rights. The remedies under the 1999 Consumer Sales Directive In the year 2002, the Sale of Goods Act 1979 was altered to put into action the Consumer Sales Directive (CSD). This brought into force four new remedies, which were organised into two tiers. The first levels of remedies were repair or replacement. The second levels of remedies were rescission or reduction in price. Under the CSD rule, the customer has to start by must begin by demanding for a first level remedy. It is left for the user to choose between repair or replacement but the trader will always provide with an alternative, under circumstances when the remedy demanded is unfeasible or inconsistent. For instance, when a consumer purchases a mixer which has a fault that can be easily repaired then in that case the retailer can refuse for replacement and offer for the fault to be fixed. But in case there is failure on the part of the retailer to either fix the fault or replace within a reasonable time or without causing major hassle to the user, the customer is at will to move to the second level. In case the customer decides to rescind the contract, the effects are same as opting for the right to reject. There is one important difference between the two. In reality the right to reject permits the user to a complete refund, while the right to rescind permits the trader to deduct that portion which the consumer might have used the goods. On the other hand, the customer may choose to get a reduction in price by keeping the goods and also receive a discount from the value of the goods. Double banking The Sale of Goods Act 1979 currently comprises of both regimens with out any effort to incorporate the two. The Davidson Review picked apart this as an instance of “doublebanking.” Doublebanking is a method under which the EU directives are laid over on domestic legislation, inducing complication and uncertainty. The law presently allows the user to select to use either regime. A user who wants a repair must provide the seller with a reasonable time within which to carry it out. Conversely, if the fixing is not successful then the user may opt for the right to reject, unless they act adequately quickly. Amendments to the Law One of the foundations of EU Consumer Law is Directive 99/44/EC on Certain Aspects of Consumer Sales Directive” or “CSD.”7 Generally the Directive deals with three aspects: (i) The necessity that goods have to be in agreement with the contract, i.e., it has to have a minimum standard of quality; (ii) The amends accessible to a user where goods are not in accordance; and (iii) Assurances given on user goods (Staudenmeyer, 2000; Grundmann and Bianca, 2002; Flesner, 2003) This Directive, along with the Directive on Unfair Terms in Consumer Contracts,8 has had a noteworthy affect on the consumer laws of the Member States. But it has not for all times been fully positive, for instance in the UK, the launching of the new solutions for consumer sales contracts besides the present remedy of rejection of the goods and extinction of the contract into the Sale of Goods Act 1979 was not productive. The Law Commission actually tried to find alternatives to the European remedies.9 Also many ideas conceived have not been actually carried through into the pCRD at all. The most notable once are the inclusion of contracts for software and digital subject matter as well as the question of direct producer responsibility (Bradgate and Flesner, 2002). Full harmonisation According to Article 4 of the draft of full harmonisation states that, “Member States may not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of consumer protection.” The main proposals which are being mooted by the Law commission have several factors which are causes for concern. For instance the decision to introduce the reforms as a “full harmonisation” measure which prevents Member States from following more constructive provisions for protecting consumers from faulty goods10 is still a concern. On the other hand, if consumer contract law is to be dependent on full harmonisation, then the eminence of those rules requires being beneficial and those rules must also offer genuine protection to users. Regrettably, the proposed rules on sales contracts (pCRD) is really disappointing particularly since it looks as if to decrease the degree of harmonisation which is already attained as a minimal standard (Flesner, 1999). Most important alterations to national laws, which include the lessening of present consumer rights as a consequence of full harmonisation, has to be kept off to the extent that is possible. Actually no matter what the EU does, the huge mass of user dealings will stay to be at the national level. Actually if the EU concentrates on a very small number of transactions then it will most likely produce an EU-wide legal model which will very easily have an opposite effect instead of the one which is intended. The effect will be far from promoting users to take benefit of the internal market and would result in a loss of known rights and recognized protection. This will consequently create aggression towards the Internal Market and the EU. Accordingly, the prospective elimination of the right to refuse faulty goods for a complete repayment for a short time after procuring under UK law to be prescribed by the pCRD would doubtlessly get a very icy reception. In reality the case for a cross-border as the only measure should have been looked at more gravely. In the same way using a directive instead of a regulation also appears to be problematic, because it will carry on to depend on full and perfect replacement by the Member States for complete effectivity, but of course there are problems in this regard as well (Flesner, 2007 pp.202-3). In the cases of VTB-VAB NV v Total Belgium NV and Galatea BVBA v Sanoma Magazines Belgium NV11 which was decided on 23 April 2009, the European Court of Justice reasoned out that “Member States may not adopt measures that are more restrictive than those defined in the Directive, even in order to ensure a higher level of consumer protection.“ The facts of the case was that based on the Belgian law which prohibited “combined offers” which means that buying a product or service on condition that another product or service irrespective of the fact that they may be identical was irreconcilable with the Unfair Commercial Practices Directive. Actually such offers formed allowable commercial practices within the meaning of the Directive and thus the conclusion as mentioned supra. “...Central to realising the benefits of the internal market is ... the establishment of common consumer protection rules and practices across Europe. This means moving away from the present situation of different sets of rules in each Member State towards a more consistent environment for consumer protection across the EU.” (Para 3 of European Commission’s Consumer Policy Strategy 2002-2006). Conclusion Thus it can be concluded with the proposal that the right to reject should be held back as a interim remedy at first instance. The remedy of right to reject is a very simple remedy as well as very easy to use at the same time this remedy inspires consumer confidence as well. The users will now have a confidence since they know that if the product which they buy has a flaw in it then they will get back their money with out meting out much argument for it. This will prepare them to try out unknown brands and retailers who are new to the market. Many states in the EU as well as several consultees are of the opinion that the right to reject should be retained. In case the users’ regime has to be fully harmonized then it must include a right to reject. This is predominantly significant in cross-border sales, as organizing repairs or replacements are not practical across long distances. Presently, users cannot demand a refund in cases of goods having a hidden defect since this flaw becomes noticeable only after the lapse of a reasonable time. The Law Commissions states that “We believe that retaining the right to reject is crucial for consumer confidence and our research shows that consumers want this. We have also found that in several other member states, consumers have a right to a refund. This is an important debate and we urge all interested parties to join it and tell us their views. ”Thus it can be proposed that under normal situations a user can exercise his right to reject within 30 days from the date of deliver. This would render the user with a reasonable time within which they can inspect the goods and test them for a short time when it is in actual use. But a shorter period of time may be reasonable in case of perishable goods. Bibliography 1. Atiyah, P.S. 2009. “The Sale of Goods”. Pearson. 2. Beale, H., and G. Howells. 1977. “EC Harmonisation of Consumer Sales Law – A Missed Opportunity?” Journal of Contract Law 12 (21) 3. Bradgate, R. and Flesner, Twigg, C. 2002. “Expanding the Boundaries of Liability For Quality Defects” Journal of Consumer Policy, 25: pp. 345-377 4. Bradgate, R. 2004. “Remedying the Unfit Kitchen” LQR pp.558-563 5. 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