Consumer Rights 3. On-Premises and Off-Premises.
Did you know that rights change, depending on whether the contract is signed at home or on business premises.
There is also a difference between signing on the day and leaving a quote for a decision later.
The guidance in these pages is not intended to replace legal advice. It is provided as a shorter, more understandable guide. The information is derived from www.legislation.gov.uk and www.businesscompanion.info. Updated December 2017.
ON-PREMISES OR OFF-PREMISES.
The companies that are referred to in this book typically sell through designers or agents who visit the home to complete the purchase. Others visit to measure, then invite the consumer to a showroom to complete the design.
The Regulations define an ‘on-premises contract’ as: ‘a contract which is neither off-premises nor a distance contract‘, which effectively means a contract made on business premises, whatever they may be.
Examples of ‘on-premises contracts’.
- A consumer visits a store and makes a purchase.
- A trader (salesperson) visits a consumer at home and leaves a quotation, allowing him to enter a contract when he is ready.
- A trader visits to measure but the consumer returns to the store to enter into the contract.
This has implications because it means that the consumer does not have cancellation rights. The list of information that he must leave is slightly different.
There are four types of these contracts but only one is usually pertinent the home improvement industry.
A contract made where a consumer and trader are together and agree the contract in a place that is not the trader’s business premises.
A trader visits your home. You are happy with the design and price but want to look at your finances before deciding. You tell him that you will call him in a week with your decision. If you decide to proceed, you will enter into an ‘on-premises contract’. He then tells you that if you will go ahead today, he will give you an extra £250 ‘carbon footprint’ discount which is available today. This brings the price to your budget and agree to go ahead. This means that you will enter into an ‘off premises contract’.
The Regulations require that you are given certain information when you buy goods away from business premises.
The trader must give the consumer the information listed below, in a way that is clear, comprehensible and legible, before they enter into a contract with you. This information must be given on paper or, if the consumer agrees, on another durable medium.
A durable medium is defined as paper, email or other medium that allows the information to be addressed personally to the recipient, enables the recipient to store the information and access it for future reference and allows unchanged reproduction of this information.
The Consumer Rights Act 2015 lists information that the consumer should be given. It is clear the law is relying on the consumer being capable and/or willing to take responsibility for their purchase by reading everything that is provided for them. It makes no provision for what is said or not said. It is what is not said that can make the difference. Traders are not required in the above instance, where the contract changes from off-premise to on-premise, to point out verbally that the consumer has given up the right to cancellation by waiting to sign the agreement. It also does not take into account, the psychology of selling.
The information listed in the table below is usually provided on the sales contract. The copy of the contract must be given no later than when the goods are delivered. This seems to be pointless, as the consumer will already have signed the contract. When a contract is signed on paper, it is easy to turn over the page to read the terms and conditions which are usually printed on the back. It is more usual to sign on computer now and the contract is emailed along with the terms and conditions. If there are no cancellation rights, this is too late. Consumers must insist on seeing the terms and conditions before agreeing a contract.
The full list can be seen online but the items relevant are shown in the image below. You can download a copy of it here.
On – On-premises.
Off- Off premises.
D – Distance.
It is up to you but to save having separate contracts and misunderstandings, it may be better customer experience to allow the 14-day cancellation rights regardless of when and where it is signed. Make sure that your customer signs if they wish to give up cancellation rights so that you can order goods without waiting until after the cancellation period expires. They cannot waive cancellation rights if they are using a finance product to purchase the goods.
When the contract is signed at your business address, the law considers that the customer has had time to make a considered judgement.
When the contract is signed at the customer’s home on the day of the appointment, the law considers that the customer has not had time to properly consider the decision.
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For Home Improvement Businesses.
Either ask your customer to sign an agreement to pay costs incurred or wait until the cancellation period has expired before ordering goods or starting production.
NEXT. Consumer Rights 4. Cancellation.