Consumer Contracts

The consumer contracts between your organisation and your consumers will play a vital role in your business’s success – not least because of how they will help your business meet crucial legal obligations. However, some business owners and decision-makers may lack a thorough understanding of consumer contract law, and the potential implications for their organisation.

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What is a consumer contract?

A consumer contract is a legally binding agreement between an organisation and a consumer. Consumer contracts can exist in relation to the supply of services, or the sale of goods or digital content.

Consumer contracts can be made in writing, verbally, or by conduct. The latter is known as a “silent contract” – such as when a consumer uses a self-service checkout.

How can Cranbrook Legal assist me with drafting a consumer contract?

When you engage the services of our commercial lawyer here at Cranbrook Legal, we can help to ensure your organisation’s consumer contracts are clear, comprehensive, and legally robust. This, in turn, will play a vital role in protecting your business’s interests.

We can draft and review consumer contracts for your organisation to enable you to identify and address potential issues before they become bigger problems.

By scrutinising your consumer contracts for risks, we can then recommend changes that will help you maximise the likelihood of favourable outcomes.

What are the key elements for a legally binding consumer contract?

To ensure your organisation’s consumer contracts are legally binding, you should look to incorporate the following elements into them:

  • An offer, presenting clear and defined terms to the consumer
  • Acceptance, whereby the consumer agrees to the terms of the offer
  • Consideration, with each party providing something of value in exchange for the other party’s promise

There will also need to be a clear and demonstrated intention by the participating parties – the business and the consumer – to create legal relations. The parties involved must have the capacity to contract, and the contract’s purpose must be lawful.

How can I ensure the contract complies with consumer protection laws?

Your organisation can take various steps to ensure your consumer contracts are on the right side of the applicable consumer protection laws in your industry and jurisdiction.

One such step is to familiarise yourself with what those specific laws are. For example, in the UK, the Consumer Rights Act 2015 plays an instrumental role in protecting consumers from unfair and dishonest business practices. It applies to all businesses, whether or not they are providing goods or services.

Knowing about such laws and regulations can help your organisation draft consumer contracts that adhere to the requirements. The terms set out in a consumer contract should be clear and easy to understand, so that consumers are left in no doubt about their rights and obligations.

What are best practices for drafting a good consumer contract?

There are various widely accepted best practices when it comes to the drafting of consumer contracts. Below are some of them:

  • Considering the different rules that apply whether the given business is selling goods, services, digital content, or a combination of some or all of these
  • Using plain and intelligible language to ensure consumers can understand the terms
  • Avoiding the use of legal jargon and references to statutory legislation, unless clear explanations of these are provided in the contract
  • Practising fairness towards the consumer. There are limits to how robust a business can be towards a consumer in this type of contract. Certain terms are banned entirely, while others may be unlikely to be enforceable against consumers.

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How can I protect my business in a consumer contract?

By ensuring your organisation’s consumer contracts include all the essential elements – such as a clear description of the goods or services provided, information on pricing and payment terms, and details of the specific laws that apply to the contract – you can help to ensure your business’s interests are protected.

There are many other steps you can take as you seek to formulate a robust consumer contract. Please call Cranbrook Legal today, on 0208 215 0053, for a conversation about how we can assist with the drafting of consumer contracts for your business.

How do I handle the right to cancel or return products/services in consumer contracts?

When you are addressing the right to cancel or return products or services in your consumer contracts, you should be looking to include various key points.

These provisions should include:

  • A clear “cooling off” period, specifying the timeframe within which a consumer can cancel the contract
  • An explanation of how the consumer is required to notify you of cancellation
  • An outline of the steps that the consumer needs to follow to return goods, including the delivery address and any requirements for the packaging
  • Exceptions to the right to cancel, setting out any products or services that cannot be returned (such as personalised items or digital content), and the reasons why.

Why Choose Us For Your Consumer Contracts?

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Contact our Commercial Solicitors In London on 0208 215 0053 or
via info@cranbrooklegal.com to make your enquiry.

What are common pitfalls in a consumer contract?

There are various mistakes or pitfalls that can easily arise in consumer contracts. Frequent examples of these include:

  • Unclear, confusing, and/or complicated language that makes it difficult for the consumer to understand their rights and obligations
  • Unfair terms that give the business too much power when it comes to changing the contractual terms, limiting the business’s liability, and/or restricting the consumer’s ability to seek redress
  • Automatic renewal provisions, whereby a contract automatically renews without clear notification or the consumer being able to give active consent
  • A lack of transparency on pricing or key terms. For example, some consumer contracts may not disclose certain charges clearly upfront, instead only mentioning them later in the fine print.

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Frequently Asked Questions

1. What types of contracts do you specialise in?

The short answer to this question is… all of them.

There are three broad types of consumer contracts, in accordance with the Consumer Contracts regulations, as described below. Here at Cranbrook Legal, we can help you draft and optimise all of them:

  • Distance contracts, whereby consumers purchase goods or services from businesses without face-to-face contact being involved
  • Off-premises contracts, which involve the buyer and the seller being face-to-face in a place other than the seller’s business when the contract is concluded, the consumer makes an offer, or the consumer is addressed by the seller
  • On-premises contracts, which are contracts between a seller and a consumer that do not fit into either of the two aforementioned categories.

Your business’s contracts – including its consumer contracts – will be of fundamental importance to the protection of its interests. So, it is imperative that you do everything possible to draft only the most airtight contracts.

You can achieve this by making sure various essential elements are covered in your consumer contracts. Examples of such elements include a clear definition of the parties involved in the agreement, a detailed scope of work, unambiguous payment terms, a strong dispute resolution mechanism, and carefully thought-out termination clauses.

Contact Cranbrook Legal today to benefit from advice on your organisation’s consumer contracts from a qualified commercial lawyer, who can help you identify and mitigate any risks or issues.

In the process of drafting your organisation’s consumer contracts, you can help minimise risk for your business by using clear and easy-to-understand language, tailoring clauses in the contract to specific risks, and making sure you have a legal professional by your side to provide advice and guidance.

The latter step can help you ensure the enforceability, effectiveness, and regulatory compliance of your contract’s terms.

The steps that you take in writing your consumer contracts can help make any later disputes with consumers easier to deal with.

You should, for example, take care to use straightforward language in your contracts, avoiding ambiguity and jargon. Contract disputes can also be easier to handle if you have established a clear and accessible complaints procedure that is set out in the agreement.

The inclusion of mediation or arbitration clauses in your organisation’s consumer contracts can further assist with the smooth, efficient, and fair resolution of disputes.

To help make sure your company’s intellectual property (IP) rights are protected in consumer contracts, you will need to include clear clauses that specify ownership of IP, as well as that restrict unauthorised use and clearly communicate the consequences of infringement.

Furthermore, you will need to ensure these terms of your consumer contract are legally compliant and easy for the consumer to understand.

Yes, we are well-placed to help your organisation with contract negotiations. Our in-house commercial lawyer at Cranbrook Legal has a high level of expertise in the legal aspects of business transactions, including pinpointing potential risks, understanding contract terms, and ensuring legal compliance from the start to the end of the negotiation process.

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