If you purchase a second-hand item from a business, trader or charity shop, the consumer rights that you are entitled to are extremely similar to those you have when buying an item that's brand new. Namely the goods should be:
These rights in the UK are defined in the Consumer Rights Act and cover any purchase from a trader made since October 2015.
If you discover a fault with an item, this act gives you the right to return it for a full refund within the first 30 day of purchase. After the first 30 days (but within the first six months) you can still return the item, but you must give the retailer the opportunity to replace or repair the fault.
After six months, to return the item you must prove that the fault was present when it was first purchased, which can be more difficult if a product was second hand or pre-owned from the outset.
Second hand products may have imperfections and faults that are attributed to normal wear and tear. In some cases, there may be quality issues with a product due to its age and how it has been previously used.
When considering the laws on buying second hand goods and your consumer rights, it's important to remember that second hand products or refurbished goods do not have to be of the same quality as new items. Therefore, you cannot simply reject an item because it is not of the same standard as you would expect if it was brand new.
Fit for Purpose with second hand goods.
Fit for purpose means that the item must function correctly and last for a period of time that is 'reasonable'. In relation to used goods the item should function fully for the purpose it was designed and sold for. However, being a used item, it may show signs of being pre-owned and not last as long as you would expect a brand-new item to last.
Satisfactory Quality with second hand goods.
Satisfactory quality is basically a standard that a reasonable person would consider as being acceptable taking into consideration the item's description, price and circumstances of the purchase. It is most often relating to a product's appearance, freedom from defect, durability and safety. Obviously, the quality of an item can be subjective, but your expectations should generally be lower if you are purchasing an item that has been previously used.
As Described with second hand goods.
As described means that an item must be accurately advertised and described by the trader. If you asked questions about the product in store prior to purchasing, such as its warranty status, service history or how it currently operates, the information given should all be correct. Likewise, if the salesperson advises you of a fault with an item, then it is 'as described' and you can't reject it due to it having the fault.
Warranty on second hand goods.
Warranties or guarantees are an optional addition to your legal (statutory) rights as a consumer.
Warranty can be provided by the manufacturer as part of the product or able to be purchased separately and ran by a third party (e.g. used-car warranty, extended appliance guarantee etc.)
Your eligibility to claim under the warranty will depend on the warranty policy's terms and conditions, however it is not uncommon for there to be numerous exclusions. These can range from the age of the item (12 months from original purchase), where it was purchased from (an authorised retailer or dealership), being conditional on regular maintenance (serviced every year) or limited to certain faults (excludes wear and tear).
Another common exclusion is that you must be the original purchaser or at least have proof of the original purchase, such as a receipt.
The specific warranty policy needs to be checked to confirm if an item is eligible for a repair or return. But it is always worth checking especially on recently manufactured products.
Section 75 protection.
Depending on how you paid the retailer for your purchase, and if no warranty is available, there may also be some additional protections available known as Section 75. This section of the Consumer Credit Act basically means that any credit provider involved in the purchase shares responsibility if things go wrong.
Therefore if you made the purchase with a credit card, store card or car finance agreement, you should contact your card issuer or finance provider to see if there is any action they can take.
Buying second hand goods online.
When buying second hand goods online, over the telephone, at home, or through mail order from a retailer you will also benefit from additional protections. Namely the Consumer Contract Regulations, or to give it its full name The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
These regulations cover what was previously known as 'Distance Selling' and provides some extra rights, even when purchasing a used product. These rights include:
The retailer is entitled to expect that anything sent back is returned in the exact condition as it was received. This can sometimes be a point of dispute when returning second hand goods as they are likely to have not been in original packaging etc. in the first instance.
An important point to remember when buying second hand products online is that not every website purchase is classed as buying from a business. When you buy from sites such as eBay, Facebook Marketplace, Gumtree, Shpock, Vinted or Amazon Marketplace you will need to check if the actual seller is a business or trader. As if they are a private individual, then consumer rights and contract protections will not apply to your purchase.
However many online trading sites do have their own buyer protection policies and dispute resolution processes which may be able to be used.
Consumer Rights and private sellers.
If you purchase items from a private seller via a web advertisement, local newspaper ad or car boot sale it is important to be aware that you don't have any consumer rights. For the Consumer Rights Act to apply you need to be an individual making a purchase from a business.
If you do buy a second-hand item from a private individual it only has to match any advertised description. This limited protection falls under The Misrepresentation Act for when an untrue fact or statement is made by the seller to convince a buyer to make a purchase.
A private seller isn't under any obligation to tell you about any faults or defects, and there's no requirement for the item to be of satisfactory quality or suitable for any specific purpose.
So, as you may have heard, purchasing from a private seller is a matter of 'buyer beware'. You should check the product thoroughly to ensure you are 100% happy before buying it.
Legal advice on second hand rights.
In the majority of cases once you make the retailer aware of the fault, they should deal with your concerns inline with your consumer rights. If they refuse, the next step is escalating the matter as a complaint and then involving any associated ombudsman which should be detailed in the retailer's terms and conditions.
If all these steps fail, your only available method of resolution may be to start court proceedings. If the value of your claim is less than £10,000, it will be treated as a 'small claim' which means there are set fees to issue the claim and only limited legal expenses are able to be added (see our guide on how much does it cost to take someone to court).
Therefore if the value of your consumer claim is significant, it will be worthwhile seeking legal advice on your dispute before beginning court action to ensure the consumer laws are on your side.
In October 2017 the debt recovery process for businesses owed money by individuals changed significantly.
Previously there was no specific pre court action process for recovering debts, but on 1 October 2017 the Pre-action Protocol for Debt Claims came into force.
A Pre-action Protocol sets out the various steps that the court expects both sides to take before commencing legal action. Issuing legal proceedings should always be a last resort, and so both parties need to have ideally first tried to settle their dispute without having to involve the court.
Whilst there are already Pre-action Protocols for other types of civil claims such as personal injury, professional negligence and possession claims, certain business debts will also now need to follow a set 'pre legal action' procedure.
The Protocol is designed cover businesses claiming repayment of a debt or unpaid invoices from an individual. However the definition of an individual includes sole traders, so the Protocol also applies to business to business debts when a sole trader is involved.
There are also a few exceptions where the debt protocol doesn't apply, mainly around claims where there currently is another Pre-action Protocol that exists (such as with mortgage arrears or construction and engineering disputes).
The debt recovery protocol.
Part 2.1 of the Pre-Action Protocol outlines its aims, however in summary they are to:
Business to business debt recovery protocol.
While a primary goal of the protocol is to provide additional time and protections to consumers, it actually includes many business to business debts. This is because the protocol considers both consumers and sole traders to be individuals.
What happens if you don't follow the debt protocol?
Failure to comply with the Protocol prior to commencing court proceedings may result in the court imposing sanctions against the creditor or claimant. The sanctions imposed are likely to be in relation to costs.
To quote the Protocol: "If a matter proceeds to litigation, the court will expect the parties to have complied with this Protocol."
Debt collection under the pre-action protocol.
Pre action Protocol Reply Form.
If the debtor states that they are looking to gain professional debt advice, the creditor has to permit the debtor reasonable time for them to obtain this advice, at least a further 30 days. This may be longer if the debtor can provide a reasonable explanation as to why it will take additional time to obtain the advice.
If the debtor states on the Reply Form that they need more time to pay the debt, the parties should attempt to reach an agreement for the amount to be settled by instalments. If a payment schedule or agreement cannot be reached, the creditor must confirm in writing why it does not accept the debtor's instalment proposal.
Should a partially completed Reply Form be received, the creditor is expected to make contact with the debtor to discuss the content and obtain the further information necessary to understand the debtor's position.
A creditor ignoring the debtor's reply and their reasons is not an option.
Use of Alternative Dispute Resolution (ADR) in debt claims.
If there is a disagreement about the debt being owed or the exact amount, then the parties should consider mediation or any other forms of dispute resolution rather than commencing court proceedings. This may be a formal process with an ADR provider or may simply take the format of a documented discussion and negotiations.
After these negotiations if an agreement is still not reached, then the creditor should give the debtor notice of at least 14 days of the intention to now commence court proceedings.
Debt collection pre action protocol.
The new Protocol creates a more formal and paper heavy procedure for your business to collect overdue invoices, as it requires that additional documentation and time is given to the debtor.
Plus there is always the potential for persistent debtors to use the Protocol to further delay payment.
So as a business you need to stay on top of your credit control procedures and issue a Letter of Claim as soon as it is reasonable to do so. Also having a solicitor draft the letter in compliance with the Protocol ensures that you can move quickly to court action should payment not be forthcoming.
In a perfect world all professional relationships would work out exactly as planned, but sadly we live in the real world and disagreements are never far away. Every year thousands of business disputes happen as customers, manufacturers, suppliers and even local authorities clash over contracts, agreements and payments.
When a dispute occurs, you need to apply rational and objective analysis to make the best decision for your business. This means compiling evidence and gaining advice on the likely strengths and weaknesses of your case, as well as the resources you wish to use to get a favourable result.
How to resolve a business dispute.
Resolving a dispute in the correct way will save your business money, and you, a great deal of stress. With this goal in mind we wanted to run down the five key steps in getting a favourable resolution to your business dispute.
1. Review the contract and your position.
To start, you need to assess whether you have a strong case or whether you are likely to be at risk of losing in the long run. To do this, you need to examine exactly what has happened as well as reviewing the relevant documents between the other party and yourself.
Do any legal agreements or contracts exist between you? If so then find the relevant clauses that apply to the issue you are in dispute over to confirm there has been a breach.
If you don't have a formal contract or agreement in place, do you have any other written correspondence or evidence of the business relationship? Have you exchanged emails or text messages that show what was required or expected from the parties involved?
It could then be that the law suggests there is an implied contract in place from historical actions or transactions.
2. What outcome do you want?
As soon as you know the strength of your case, you should objectively consider the result that you want to achieve or are willing to accept as a compromise.
Business disputes usually involve a breach of contract and the party who suffers a breach is entitled to be placed in the same financial position as if the contract had been fully complied with. Therefore while you may have the right to be compensated for the full amount, you may be willing to accept a lesser figure or other compromise to achieve a resolution.
For example, if a customer cancels a contract without providing the required notice as they are selling their business. You may be open to allowing them to end the contract early on the condition that the new owner agrees to pick up your services or enters a similar contract with you.
You may also want to consider ongoing relations as part of what outcome you are seeking. Some business owners want to set an example to prevent other customers or suppliers breaking contracts and repeating the situation. Even though taking an uncompromising approach is not advised and may be expensive in time and money.
On the flip side, you may have had a good relationship with the other party and so be open to find a more amicable solution and keep working with them.
You should always assess the dispute with your 'commercial hat on' and decide what course is best for your ongoing business whilst minimising the associated risks and costs.
3. Assess the opposition.
Often businesses neglect to think of the other side in a dispute, but it can be valuable knowing their position and what they want or don't want to happen. For example:
4. Consider the cost of a contract dispute.
With all the above in mind, you need to weigh up your options and how much each course of action will cost in time and money.
Your case prospects will factor into this, as with a strong case going all the way to court may be the best option. Additional costs like the court issue fee, hearing fee etc. can be recovered as part of your claim when you win.
While on weaker cases or those that are very complex, making a compromised offer for a quick settlement may be more efficient.
Legal representation will also incur a cost, so it's important to discuss fees with your solicitor when considering legal action. Having all the potential legal and court costs in mind will allow you to make an informed decision when looking at what you may recover through litigation or are willing to offer/accept as a compromise.
5. Have a business dispute strategy.
Once you have combined your own research with legal advice, you can plan an approach that gives your business the best chance of achieving its desired outcome.
You may then decide that an informal chat with the other party outlining your findings may bring about an agreement. Alternatively you may wish to instruct a solicitor to write a Letter Before Action, outlining your claim and giving notice to your opponent that if a settlement isn't made in a defined timeframe court proceedings will be commenced against them.
When it comes to disputes, a court hearing is often a last resort as there are many other solutions that are generally found before it gets to this point. Even if court proceedings are issued, settlements are usually achieved before an actual day in court is reached.
While you should always have a strategy and budget in mind, don't rule out altering this plan as the situation develops. Mediation, negotiation or compromise should only ever be ruled out after you have considered them thoroughly.
Each dispute is unique and the optimum way to resolve them is via careful and early analysis of the situation and prospects. This is why there is no substitute to taking legal advice on your dispute as early as possible.
Catalyst Law are team of legal professionals with over 20 years' experience helping businesses and people with their legal problems.
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