New legislation has recently come into effect (1st October 2015), which has been intended to give the Consumer more rights against the Seller.
The Consumer Rights Act (CRA) 2015 now affects everything you buy as a consumer, whether the purchases you made were online or in a place of trade and includes any purchase that requires you signing a contract.
The aim of the Consumer Rights Act is to consolidate several separate pieces of legislation into one, which covers all aspects of this area to clear up its original complexities.
The major pieces of legislation that have been combined into the Consumer Rights Act are as follows:
- The Sale of Goods Act
- The Supply of Goods and Services Act
- Unfair Terms in Consumer Contracts Regulations
- Unfair Contract Terms Act.
Terms which were frequently hidden in the small print of contracts has now been banned and all contracts must now clearly state the key components of the deal and state the price and any hidden costs in a clear and concise manner.
The Sale of Goods
The Act requires that goods sold must be:
- Of satisfactory quality
- Fit for a particular purpose
- As described
Goods that failed to conform to the contract had to be rejected within a ‘reasonable timeframe’ before the act, but consumers now have a minimum of 30 days in which they can reject defective goods.
How do the Changes Affect Timeshare Consumers?
Most applicable to Timeshare Consumers are the changes made to the legislation pertaining to the sale of services, as outlined below:
The Sale of Services
This Act ensures that any statement a vendor makes when a consumer is either deciding to enter into the contract or making a decision about the service after entering into the contract is now a binding contractual term. Previously such terms may only have given rise to an action in the tort of misrepresentation but now a claim may be brought for breach of contract.
This means that a claimant’s case will generally be easier to prove and expectation damages may be awarded rather than compensation based on the principle of restitutio ad integrum.
These changes mean a big triumph for timeshare consumers as all future contracts made have to be much more concise and transparent, meaning there is no hidden catch in the small print. The future for Timeshare should now see a decrease in the amount of people signing contracts that have been mis-sold and should see a decrease in claims against resorts for misrepresentation.
The definition of an ‘unfair term’ remains the same as that originally outlined in the Unfair Contract Terms Act 1977; for example, 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.” However, terms that express the main subject matter of the contract are not subject to this fairness test provided such terms are both transparent and prominent in the contract.
The Act also adds to the so-called ‘grey list’ that lists a non-exhaustive range of terms which are, in most cases, likely to be considered unfair by the courts. These include:
- Extortionate charges when a consumer decides to cancel a contract.
- Allowing the trader to make decisions about the characteristics of the subject matter after the contract had been concluded.
- Giving the trader a mandate to vary the price after the consumer is already bound.
The CRA applies to contracts and notices between a “trader” and a “consumer” in relation to goods or services purchased on or after October 1, 2015. It is important to remember that service contracts signed before this date will adhere to The Supply of Goods and Services Act 1982.