Consumer Contract Regulations - The nightmare before Christmas (for online retailers)?

Consumer Contract Regulations - The nightmare before Christmas (for online retailers)?

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Author: Fleur Turrington

Statistics of retail sales from December 2013 show that nearly 20% of all non-food purchases originated from online sales and with this figure representing 16.5% year-on-year growth from 2012.

Online sales for Christmas 2014 are anticipated to be at their highest ever level.

With retailers sourcing goods from and delivering to anywhere in the world an innovative and flexible supply chain is required to transport goods to the consumer at a click of the button. A smooth and rapid supply chain and good stock management is therefore essential to any online retailer.

Does internet shopping affect liability if there is a problem with the order?

Whilst the burden upon online retailers to deliver goods to consumers within 30 days previously existed, the new contract Regulations (implemented on 13 June 2014) re-affirms this requirement for online retailers.

In the event that the consumer does not receive their goods within 30 days, the new legislation further increases the burden upon online retailers by reducing the amount of time in which a consumer must receive their refund from 30 to 14 days.

Potential pitfalls

In this world of instant social media, a tweet or post from a disgruntled customer could damage a retailer's reputation, only adding to the pressure that online retailers must "get it right" for every delivery.

Lost/delayed deliveries

Over the Christmas period, it is inevitable that not all transactions will run smoothly. It is therefore important that online retailers are aware of changes to legislation in order that they can minimise issues before they arise.

If a trader fails to deliver the goods by the agreed time (or within 30 calendar days at the latest) then the consumer may immediately treat the contract as at an end (i.e. terminate it) in the following circumstances:

  • The trader has refused to deliver the goods
  • Delivery of the goods by or within the agreed time or period was essential (taking into account all the relevant circumstances at the time the order was placed). This provision is particularly relevant for those ordering in time for Christmas.
  • Before the contract was made, the consumer told the trader that delivery no later than 30 calendar days, or by or within the agreed time or period, was essential.

New delivery date

If the consumer cannot opt to terminate immediately the consumer may specify a new period (that is appropriate to the circumstances), and require the trader to deliver before the end of that period.

If the trader fails to deliver within the new period so specified, the consumer may treat the contract at an end.

Remedies

If the consumer treats the contract as at an end, either immediately or after a new time for delivery has been set and missed then the trader must reimburse all payments made under the contract (including delivery charges) without undue delay.

If the consumer decides not to treat the contract as at an end, they are still free to:

  • Cancel the order for any of the goods.
  • Reject goods that have been delivered.

This is an attractive option for a consumer who has multiple orders with the same business because it enables the consumer to keep the contract alive between them.

What next?

Preparation is key to protect your business against potential pitfalls:

  • Ensure that both supply chain managers and agents working within the supply chain (couriers etc) are aware of the key provisions of the Regulations;
  • Ensure particular attention is paid to seasonal goods, perishable items and goods with long lead times.
  • Manage your customers' expectations by promising what you can deliver. If delay is foreseeable attempt to contact and negotiate with customers prior to the 30 deadline.
  • Communicate with your suppliers regularly to ensure they can deliver the goods to fulfil the orders you take.

About the Author

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Fleur Turrington

Senior Associate

03700 86 8976

Fleur is a Senior Associate within our Dispute Resolution and Compliance team and leads the team's Retail sector. Fleur specialises in commercial disputes and is based in our Thames Valley office in Reading. She advises clients on all contractual commercial disputes, construction disputes, corporate disputes, tortious claims (primarily negligence), contractual interpretation, breach of contract and supplier disputes. She also advises and assists clients in relation to the Sale of Goods and Supply of Services and provides training to clients on consumer legislation issues. In addition she advises on Product and Public Liability cases relating to claims primarily regarding large scale complex construction disputes.

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