Statutory rights: what buyers and sellers should know

If, after purchasing an item, you discover that the goods are faulty or not working at all, you can make use of your statutory rights. This guarantees that a seller provides a replacement or rectification. Read on to find out what exactly statutory rights for returns are, how they are fulfilled and when the law does not apply.

Statutory rights are the minimum rights guaranteed to customers governed by the Consumer Rights Act 2015. The law stipulates a retailer is obliged to provide goods that are of satisfactory quality, fit for purpose, and as described. If customers discover a defect upon receipt of goods or services, their statutory rights on faulty goods apply.

In case of online, phone, or postal sales, customers may return an item without any reason for a full refund. That means, irrespective of whether an item is defective or not, it can be returned within 14 days after receipt. However, the same does not apply for items bought in-store. If a customer no longer wants an otherwise fully functioning product they bought in a shop, it is at the seller’s discretion to accept the return for a refund or store credit.

UK goods contracts also mandate that sellers and service providers must add pre-contractual information in a contract and products must match a sample or model previously seen by the buyer. Statutory rights generally apply for a duration of six months after receipt of a product.

Often synonymous with statutory rights is the term ‘guarantee’. However, the two differ in some essential points. While statutory rights are governed by law, a guarantee is a service provided free of charge by the manufacturer. It is up to the manufacturer to determine the terms of the guarantee. Usually, this includes reimbursing the consumer for goods that are faulty or break through no fault of their own. Manufacturers can offer a refund, repair, or replacement. And statutory rights for a refund remain unaffected by those set out in a guarantee. Online stores will often set out their rules as part of their terms and conditions which is often found in a website’s footer.

Both terms refer to the return of or refund for defective goods. If customers want to return working items, they may be able to do so according to the right of withdrawal and voluntary return rights offered by a seller.

For customers and sellers to decide when a fault demands a statutory right for return, defining the term ‘defect’ is important. When exactly is a product or service defective? The following points indicate a defect:

• A product delivered differs to the one originally ordered.
• The scope of delivery differs from the actual order, for example in the number of parts
• Assembly or operating instructions contain errors so that proper use is not ensured.
• The product does not fulfil its intended purpose, for example, a dishwasher does not clean properly.
• Goods cannot be used as intended, for example, an alarm system is triggered too quickly or for no reason.
• One or more advertised features of an item are not fulfilled, for example, the described spin on a washing machine is not achieved or the power consumption of an electrical appliance is higher than described
• The dealer or manufacturer has assembled ordered goods incorrectly.
• A purchased item has a defect of title. This often applies in the real estate sector if a land charge is subsequently established after the purchase of a property or a third party makes a justified claim to the property.

Principally, anything that prevents a customer from using the purchased item as intended can be considered a defect. However, the fault must have already existed at the time of purchase or delivery. If a customer damages the item, their claim for a refund will be void.

If a fault developed within the first six months after purchase, the seller has the burden of proof and must check the fault in order to verify a product wasn’t faulty when delivered. Usually, they’ll want to pass on the item to the manufacturer to examine the issue.

If the problem arose after six months of owning a product, it is up to the buyer to prove that the defect was already present at the time of delivery. This means that consumers also take care of delivery costs to return the defective item. In some cases, retailers may be willing to reimburse customers for delivery.

While sellers generally have up to six years to return defective goods, the burden of proof reverts to them after the first six months. A buyer has a right to reject which is limited to 30 days. That means if they uncover a defect within the first 30 days after delivery, they can return the item for a quick refund. This does not apply to digital content that’s faulty in which case a seller has the right to repair it as opposed to issuing a full refund. In case of online sales, customers can return items for any reason within the first 14 days after receipt.

After 30 days of receipt of an item, a seller usually has the right to repair a defect. In that case, a buyer must inform a seller of the issue in writing. A customer would then usually return the item for inspection and repair. The different types of statutory refunds include:

• Withdrawal from sale: The buyer withdraws from the purchase, thus dissolving the contract and returns the goods. The seller must refund any money paid in full.
• Reduction in price: Depending on the extent of the damage, a seller may reduce the purchase price and offer a partial refund. If the buyer and seller cannot agree on a sum, a court can decide.
• Compensation: This can be claimed in addition to the procedures described above. Eligible costs are, for example, repair costs on the defective goods or compensation for damage incurred by the defect.

Commercial dealers are principally unable to exclude statutory rights when selling to private individuals. When it comes to second-hand goods, for example, used cars, it once was common to add wording such as ‘purchased as seen’ in a sales contract and thus ward off any statutory claims. However, the courts have repeatedly declared this procedure as inadmissible.

The only way for a seller to avoid the statutory warranty is to prove that the customer knew about the defect before or at the time of concluding a contract and that they accepted the defect.

Please note the legal disclaimer relating to this article.