About this series of articles
This article is the fourteenth in a series that explains the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, often abbreviated to CC (ICAC) and how to apply it to your business so that you remain compliant.
This law came into effect from 13 June 2014, replacing older 'doorstep selling' and 'distance selling law'.
Unfortunately, like most European law, the Regulations are anything but clear and practical. We hope that this article clears some of the confusion about how business must comply.
If your business already compliant with distance selling rules, the changes represent evolution rather than a revolution. However, there are some important changes.
Why is the contract date important?
The contract date is important for two reasons.
- It is the date by which all specified information must have been provided to your customer.
- It is the base date for cancellation rights and the returns procedure.
Providing information before the contract date
Application to sales of goods and of goods and services together
Certain information specified in the Regulations must be provided before the contract is made.
The requirement to provide certain information about the contract is not new – but now you do have to provide much more information if the contract is regulated.
Most websites are set up so that the contract is made when the customer makes payment for goods. This is of course the same principal we all use every day when we buy from a high street shop. If you are a distance seller, however, you might assume you can change the contract after receiving your customer’s money. For example, the product ordered may be out of stock but coming soon; or your delivery driver may be sick so delivery times might be longer than stated on your website; or the customer may have added an unacceptable term to the order.
Good business practice has always required that you treat such an order with respect and care. Now you are compelled to do so. If your contract is made when your buyer pays, and you are not in a position to deliver, you are in breach of the Regulations.
To protect your business, you should make sure your contract terms provide that the contract is made only when:
- you say it is made or write to accept the order (also read about the postal acceptance rule when entering into contracts remotely), or
- you despatch the goods or start the service, or
- some condition within your control remains outstanding.
You must also make sure you provide information about what you will do if the customer pays while you are unable to deliver. The Regulations do not specify a procedure; your obligation is only to tell your customer what might happen. It comes back to providing information. The obvious answer is to state your policy as for example, to return your customer’s money if you cannot deliver within 7 days.
Your customer then has 14 days within which to cancel his order if he wishes to do so. You will have explained that too.
Application to the provision of services only
We advise that service providers should certainly make clear that the contract is made only when you accept and say so. That requires a clear statement to that effect in your T&C document, and a similar statement at some stage near to the pay point if you take money in advance of service provision.
That enables you not only to make sure your client has all the information but also that you can reject a client you do not want.
Detailed information provision may be impossible to provide. Many services are difficult to describe in detail. If so, refer to outcomes in the round. You do not have to give away trade secrets or say how many people will be engaged on the work.
Further information
We recommend that you read about how retailers are affected next.
Unless you are exempt from the Regulations or are already compliant, you are likely to need to update your customer contract templates. These are likely to include your terms on your website if you sell online and your offline customer contract if you sell offline.
If you have any questions about the Consumer Contract Regulations 2013, or would like help updating your contracts to comply, please ask us. We’d be delighted to help.