The Consumer Rights Act 2015

The Consumer Rights Act 2015 (the “Act”) received Royal Assent in March 2015 and its main provisions came into force on 1 October 2015. The Act was drafted in response to a general consensus that the UK consumer protection law was unnecessarily complex, unclear and inconsistent. It was also suggested that consumer law had not adequately developed alongside advances in technology. The Act seeks to consolidate and clarify the existing law and introduce provisions for modern consumer issues. One such modernisation is the inclusion, for the first time, of consumer rights relating to digital content. This article shall outline the key rights and remedies introduced by the Act to protect consumers of digital content.

Application

Part 1 of the Act applies to contracts where a trader provides digital content to a consumer for a price and sets out rights and remedies available to consumers who purchase digital content, irrespective of the contract terms that the consumer has agreed to.

Trader: defined under the Act as a person acting for purposes relating to their business, craft or profession and includes government departments and public sector authorities.

Digital content: the Act has introduced digital content as a new category of product under consumer law and is broadly defined under the Act as “data which is produced and supplied in a digital form.” Examples of digital content include software, apps, e-books, computer games, music, videos or texts. The types of contract covered by the digital content provisions are contracts where the consumer has paid for the digital content, or the digital content is supplied to the consumer free alongside goods, services or other digital content which the consumer has paid for. The digital content provisions do not cover consumer contracts where the trader supplies a service by which digital content reaches the consumer.

Consumer: an individual acting wholly or mainly outside of purposes relating to their business, trade, craft or profession. The definition of consumer includes individuals who enter into contracts for a combination of business and personal reasons and is therefore wider than existing definitions under EU and UK legislation.

Rights

A consumer of digital content has, for the first time, a number of statutory rights under the Act. If these rights are not addressed specifically in the contract between the consumer and the trader, they will be treated as implied.

• Satisfactory quality – section 34(1) of the Act provides that the digital content must be of a satisfactory quality. It has the effect of incorporating into each contract for digital content a term requiring satisfactory quality. This is an objective test considering the description of the goods, the price, and other relevant circumstances such as advertising and statements made about the digital content. The term will not apply where a specific defect is pointed out to the consumer, if it is obvious or they have undertaken a trial.
• Fit for particular purpose – section 35(3) of the Act provides that the digital content must be fit for purpose made known to the trader (expressly or by implication) by the consumer. It is not relevant whether the digital content is usually supplied for that purpose.
• Matching description – section 36 of the Act provides that the digital content will correspond to any description provided by the trader. The contract will also include information provided in terms of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Any change relating to information under these regulations will not be effective unless expressly agreed. The above rights provided under section 34-36 of the Act shall be referred to as (the “Quality Rights”)
• Supply by transmission and facilities for continued transmission – section 39 of the Act extends the Quality Rights to circumstances where there is a contract to supply digital content, and the consumer’s access to the content on a device requires its transmission to the device. In these circumstances, the digital content is treated as having been supplied at the earlier of: (1) the point at which the digital content reaches the consumer’s device; or (2) the point at which the digital content reaches an independent trader within the contractual control of the consumer (such as a mobile phone operator). In circumstances where the supply of digital content requires the digital content to be transferred via the internet between the consumer’s device and a server (such as a music streaming facility), the consumer is entitled to use their digital content for a reasonable period of time. The Quality Rights apply to the digital content over that period of time.
• Quality, fitness and description of content supplied subject to modification – section 40 of the Act provides that where the digital content is supplied to a consumer subject to the right of the trader or a third party to modify the digital content, the Quality Rights apply to the modified contents. This section does not prevent improvements or new features, however, the digital content must continue to match the description given by the trader to the consumer, subject to any change agreed between the trader and consumer.

Remedies

• Substandard digital content – under sections 42-44 of the Act, where the digital content does not meet the standards of the Quality Rights, detailed above, the consumer is entitled to (i) repair or replacement; or (ii) where repair or replacement is not possible or cannot be achieved in a reasonable time, or without significant inconvenience to the consumer, the consumer may keep the digital content at a reduced price. Notably, there is no right to reject digital content.
• Right to a refund – section 45 of the Act provides consumers with a right to a refund of all money paid for the digital content if the trader does not have a right to supply the digital content. However, if the breach only affects part of the digital content purchased, the right to refund does not extend to the unaffected digital content.
• Damage to device by content – section 46 of the Act provides that where the digital content causes damage to the consumer’s device that could have been avoided had the trader exercised reasonable care and skill; the trader must repair the damage or compensate the consumer for the damage with an appropriate payment. Any repairs must be carried out within a reasonable time, without significant inconvenience and the trader must bear any costs involved. Any compensation must be paid without delay and must be made within 14 days of the trader agreeing the payment is due.
• Tangible goods – where the digital content is supplied in a tangible form (for example on a disk or camera) the good rights under chapter 2 of the Act will also apply in addition to the digital content Quality Rights. The rights under chapter 2 include a right to reject the goods and treat the content as at an end.

Comment

The Act has introduced the first consumer rights and remedies specifically relating to digital content. These rights and remedies cannot be excluded and it is therefore important for businesses to consider the implications of these. In addition, liability generally cannot be excluded under the Act, except in relation to damage to devices or providing compensation to the consumer. With this in mind, it is prudent to take advice to ensure that contracts comply with the new Act. The law has changed with the times, consumer contracts must change with it.

Co-authored by Kevin McDade