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Consumer rights to return faulty goods

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					                   Consumer rights to return faulty goods
                   Standard Note:    SN/HA/2239
                   Last updated:     12 May 2010
                   Author:           Lorraine Conway, Home Affairs Section
                   Section           Home Affairs Section



The Sale of Goods Act 1979, as amended by the Sale and Supply of Goods Act 1994 and
the Sale and Supply of Goods to Consumers Regulations 2002, covers the purchase of
goods from shops, suppliers and online or mail order retailers. The Act imposes certain
‘implied terms’ into the contract of sale for the benefit of the consumer. It also details the
obligations of retailers in situations where the consumer has to return a defective or
damaged good. One important statutory implied term is the expectation that the purchased
good will be of ‘satisfactory quality’. This includes fitness for any purpose specified,
appearance and finish, freedom from minor blemishes, safety and durability. The failure of
the product to meet any one of these criteria may be a breach of the consumer’s statutory
rights, enabling the consumer to go back to the retailer, even after some months of use.

In brief, if the consumer discovers an obvious fault with the good at any time within the first 6
months of purchase and it has not been caused by normal ‘wear and tear’ or misuse, the
consumer may return the good to the shop they bought it from. The retailer has a
responsibility under the Sale of Goods Act 1979 to put the matter right, either through a
refund, replacement good or repair. The retailer cannot evade responsibility by referring the
consumer to the manufacturer (even if there is a manufacturer’s guarantee or warranty). If
the retailer offers to repair the good, they must do this within a reasonable time, at no
additional cost to the consumer and without causing any significant inconvenience.
Alternatively, if repair is impossible or unfeasible, the consumer should be offered a
replacement good on a ‘like for like’ basis (and not simply the cheapest and most basic
model). If repair or replacement is not offered, then the consumer can insist on a refund.
However, any refund given may take account of any use the consumer may have had of the
good since they took possession of it, and the purchase price reduced by an appropriate
amount.

The purpose of this note is to provide a detailed overview of a consumer’s statutory rights to
return a defective good under the Sale of Goods Act 1979 and other relevant consumer
protection legislation.




This information is provided to Members of Parliament in support of their parliamentary duties
and is not intended to address the specific circumstances of any particular individual. It should
not be relied upon as being up to date; the law or policies may have changed since it was last
updated; and it should not be relied upon as legal or professional advice or as a substitute for
it. A suitably qualified professional should be consulted if specific advice or information is
required.

This information is provided subject to our general terms and conditions which are available
online or may be provided on request in hard copy. Authors are available to discuss the
content of this briefing with Members and their staff, but not with the general public.
Contents

1         A consumer’s legal rights to return a faulty good                                        2 
          1.1  Under sale of goods legislation                                                     2 
          1.2  Circumstances where a consumer has no right to return a good                        3 

2         Is there an EU-wide two year consumer guarantee?                                         3 

3         The importance of a manufacturer’s product guarantee or warranty                         4 

4         Consumer redress under the Consumer Credit Act 1974                                      4 

5         Alternative dispute resolution                                                           4 




1          A consumer’s legal rights to return a faulty good

1.1        Under sale of goods legislation
UK law relating to the sale of goods is set out principally in the Sale of Goods Act 1979 (SGA
1979) as amended by the Sale and Supply of Goods Act 1994 and the Sale and Supply of
Goods to Consumers Regulations 2002.

Under the SGA 1979 (sections 13 and 14) a consumer has the legal right to expect that any
goods they buy be of satisfactory quality, taking account of all relevant circumstances,
including: fitness for purpose, appearance and finish, freedom from minor defects, safety and
durability. What is regarded as 'satisfactory ' will depend, in part, on the price paid, and how
the item was described (for example, if the goods in question are very cheap, or second-
hand, the buyer cannot demand top quality). Consumers cannot expect a legal remedy in
respect of:

      •    fair wear and tear;
      •    misuse or accidental damage; or
      •    if they decide they no longer want the item

Similarly, consumers cannot expect a legal remedy where goods have faults that they knew
about before the sale or that should have been evident on reasonable inspection.

Under the sale of goods legislation, goods must also be fit for their normal purpose, and fit
for any particular purpose that the buyer has made known to the seller. Goods must be the
same as they have been described; either by the seller, when describing them or in any
written description (for example, in packaging, display signs, etc).

If a product that was faulty at the time of sale is returned to the retailer, the consumer is
legally entitled to:

      •    a full refund, if the good is returned within a reasonable time of the sale (‘reasonable
           time’ is not defined in law but is often interpreted by the courts as quite a short period
           of time); or
      •    a partial refund (if the consumer derived some benefit from the good during his/her
           possession of it); or



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      •   repair or replacement; or
      •   claim compensation (i.e. damages)

Where faulty goods are returned within the first six months of purchase, the consumer is
entitled to a remedy unless it is clear that the defect did not exist at the time of purchase. In
other words, during the first six months of purchase the consumer has the benefit of a
presumption that the goods were not satisfactory when delivered. If the retailer does not
agree, it is for him to prove that the goods were satisfactory at the time of sale. After the first
six months and for up to six years, consumers are entitled to a remedy if they can show that
the defect existed at the time of delivery. These rights are enforceable against the retailer,
not the manufacturer. This is because an individual's legal rights are against the person who
sold them the goods, since they have a contract with the seller, rather than with the
manufacturer who produced those goods. It is the responsibility of the seller that the goods
he sells are of satisfactory quality. The SGA 1979 works on a chain system. If someone
claims against a retailer, they, in turn, may claim against the wholesaler, who can claim
against the manufacturer.

A consumer loses the right to return goods that have proved to be defective if they have
accepted them in the legal sense. This may involve telling the seller that they have accepted
them, or holding on to the goods for some time after their defective nature has become
apparent. That said, under section 2 of the Sale and Supply of Goods Act 1994, a material
question in deciding whether someone has lost their right to reject goods will be whether they
had a reasonable opportunity to examine them, so as to determine that the goods were in
conformity with the contract. If this was not the case, then they would still be entitled to a full
refund, even if some time had elapsed between the actual sale, and the buyer discovering
that the goods in question have some basic defect.

After a buyer has accepted the goods, under Section 11(4) of the SGA 1979, they can no
longer reject them and recover their money, though they may still have a claim for damages,
repair or replacement of the product. If neither repair nor replacement is realistically possible,
consumers can request instead a partial or full refund depending on what is realistic in all the
circumstances.

1.2       Circumstances where a consumer has no right to return a good
A consumer will have no statutory rights to return a defective good in circumstances where:

      •   the consumer was aware of the defect before they bought the good;

      •   the consumer bought the good from a private buyer (i.e. the seller was not acting in
          the course of business);

      •    the consumer was invited to carry out a thorough inspection of the product and fail to
          spot a defect which that inspection ought to have revealed;

      •   the consumer has changed his/her mind about the product (i.e. they simply decide
          that do not like it) or the item was not appropriate due to colour, size or style


2         Is there an EU-wide two year consumer guarantee?
Many people are mistaken in thinking that the purpose of Directive 1999/44/EC, ‘On certain
aspects of the sale of consumer goods and associated guarantees’, is to give consumers a
minimum two years guarantee for all goods. In fact, this EU Directive, implemented in the UK
by the Sale and Supply of Goods to Consumers Regulations 2002, has added little to already
existing UK consumer protection law under the SGA 1979.



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Under this Directive, all Member States have to ensure that “a retailer could be held liable for
all 'non-conformities' (i.e. defects) which manifest in the good within two years from delivery”.
However, this requirement is not a two-year legal guarantee (although, rather confusingly,
the Directive’s title describes it as such); this is because goods are not legally required to last
for those two years. It simply provides that consumer goods must conform to the sales
contract at the time of delivery. If a consumer can show that the goods did not do so, they will
be entitled to repair or replacement of the goods free of charge. If this would be
disproportionate or unreasonable to expect from the retailer, the consumer will be entitled to
a reduction in price or a refund. These consumer rights are available for up to two years
following purchase. If the defect becomes apparent within the first six months of purchase, it
will be presumed to have existed at the time of delivery, otherwise this will be for the
consumer to prove.

However, the Directive adds little to UK consumer protection law. The SGA 1979 already
provides the same legal rights to consumers to return faulty goods but for a period of up to
six years after purchase - a much longer period therefore than provided for by the EU
Directive. As a result, consumers should still rely on the SGA 1979 when returning faulty
goods.

3      The importance of a manufacturer’s product guarantee or warranty
There is no obligation on retailers or manufacturers to offer guarantees. However, where
guarantees are offered at no extra charge to the consumer, the Sale and Supply of Goods to
Consumers Regulations 2002 provide that they will be legally binding. Any guarantee offered
must be made available on request by the consumer.

Any rights of redress against the manufacturer, given to the consumer under a product
guarantee or warranty, are in addition to their statutory rights against the retailer. This means
that the retailer (not the manufacturer) should be their first port of call when a product turns
out to be faulty. It would be misleading for a retailer to tell a consumer that they can do
nothing simply because there is a valid warranty with the manufacturer; the consumer has
statutory rights against the retailer. Similarly, the fact that a guarantee or warranty has
expired does not mean that the consumer’s statutory rights have been extinguished. The
SGA 1979 imposes strict liability on the seller; therefore the seller is legally required to assist
the consumer if there is a defect with the product.

4      Consumer redress under the Consumer Credit Act 1974
As a general rule, a consumer’s legal rights are against the person who sold him the goods
(under the legal principle of ‘privity of contract’). However, if a faulty good was bought with a
credit card (or via a credit agreement arranged by the trader), the consumer may have an
equal liability claim against the credit firm under section 75 of the Consumer Credit Act 1974
(CCA 1974) provided that the cash price of the good is over £100 but not more than £30,000.
Specifically, under section 75 the credit provider may be ‘jointly and severally liable’ with the
retailer for a faulty good under the contract of sale. This can be particularly useful if the
retailer has gone out of business.
However, it should be noted that section 75 of the CCA 1974 applies only to credit cards and
not to debit cards (such as Visa Delta) or charge cards (where all charges must be settled at
the end of the month).

5      Alternative dispute resolution
For a consumer to take a retailer to court should be a matter of last resort. On a practical
level, it is far better for the consumer and the retailer to try to reach a satisfactory solution.


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Where this is not possible, use of a trade association or alternative dispute resolution
procedure could be considered. 1




1
    Information about alternative dispute resolution schemes should be obtainable from the Community Legal
    Service or a Citizens Advice Bureau



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