Sell With Confidence
Knowing the law is on your side can help you to trade confidently, especially if a dispute should arise.
At Buy With Confidence, we know that Trading Standards Regulations are just one of a range of laws which
businesses are expected to be aware of and comply with, and we appreciate how time consuming it can be to
keep up with changes when you are busy with other tasks. None the less, taking the time now to ensure your
business is compliant with the law is vital to prevent the risk of future losses or even prosecution.
Here are a few tips from Buy With Confidence, based on our experience of meeting with many
businesses, which we hope may help you avoid some of the most commonly overlooked rules.
If you decide to apply for membership, your administering authority will be able to give you
guidance on these issues. For a faster application process you may wish to read through this information in advance
and make any necessary changes to your working practices.
Please note that some of these law create criminal offences, which means that prosecution can result
if they are not complied with. This guidance provides a brief overview of selected issues only and should not be relied
upon as a complete or definitive statement of the law. For detailed or specific guidance please contact your local
trading standards service whose details can be found at
www.tradingstandards.gov.uk.
BWC Top Tips:
1. Disclose your identity
The law requires you to make it clear in communications with your customers and suppliers who they are actually dealing with, and how to find you.
This means it must be clear whether you are trading as a limited company, and if not, what the names of the proprietor or partners are and where
they may be contacted.
Limited Companies
Limited Companies Should give their registered company name, number, registered address and place of registration on all business
letters, order forms and websites. Electronic documents are subject to the same rules. Other types of business document are required to show the
company's registered name.
Sole Traders and Partnerships
Sole Traders and Partnerships are required to provide specific information if they trade under a business name.
The disclosure requirements may not apply if the proprietor trades under their own name, without alterations or additional words (for example, 'Fred Smith').
Letters, invoices, receipts and demands, including electronic versions, must show the proprietor's name and are also required to give an
address at which documents can be served effectively. In the case of partnerships, all the partners' names should be given (but if there are more than 20
partners, special rules will apply).
The required name and address information must also be displayed prominently at any place of business where customers or suppliers may visit.
The Law
Until October 2009, the requirements for sole traders and partnerships to disclose
their name and address came from the
Business Names Act 1985.
The
Companies Act 2006 came into force fully on 1st October 2009,
and contains provisions which replace this part of the Business Names Act. The rules relating to limited companies can be found
in the
Companies (Trading Disclosures) Regulations 2008.
2. Use Fair Contract Terms
Depending on the nature of your business, you may not need to use a standard set of terms and conditions.
If your businesses does have contracts with small print, there is a legal requirement that the agreement is fair.
This is especially important in contacts with consumers, who get more protection than businesses from the effects of unfair terms.
For a contract to be fair, it should be easy to read - which means the print should not be too small or faint.
It should also use language which is not too complicated. The terms themselves must not attempt to take away the
rights of consumers - these apply automatically and cannot be written out. The terms should give
balanced rights to both parties, and should not contradict the pre-sales information given to the customer.
Borrowing a set of standard terms from a similar business, or asking a solicitor to draft terms,
is no guarantee that they will be fair. If you do ask a lawyer to draw up or review your terms, it will be important
to draw their attention to the
Unfair Terms in
Consumer Contracts Regulations, to make sure they have them in mind when working.
3. Ensure your marketing is truthful and up-to-date - including membership claims and logos
Anything you tell your potential customers to encourage them to buy from you should be true and not misleading.
This includes being transparent about pricing (including taxes), and making sure you have removed old membership logos when you leave an organisation.
Under laws which came into force in 2008, you can be asked to prove that an advertising claim is true,
and you can be found to breach Regulations by failing to disclose to customers the full and accurate information they need to make a buying decision.
4. Give your customers the correct cancellation rights
Many of the contracts made with consumers must by law contain specific cancellation rights. Some of the key areas to look out for include the following:
1. Contracts made at a customer's home.
These are legally cancellable and a specific notice of cancellation rights, along with a cancellation form must
be provided to customers, even if you don't have a written contract (Buy With Confidence can provide guidance if required).
Please note that this applies even if your visit to the customer's house was at their request.
2. Contracts made without face-to-face discussions (Distance Selling).
If your business is organised to take orders or make agreements by telephone, internet, mail-order
or another mechanism where a deal is struck before/without meeting face-to-face, your customers will be entitled to change
their mind and must be informed of their right to cancel.
In general, customers will have seven days to cancel goods orders
(starting the day after the goods are delivered). In the case of
services, the seven days starts to run when the order is agreed.
3. Credit Agreements (Regulated Consumer Credit).
Some types of credit agreements are cancellable by law. Unless your business is a financial service provider regulated by the
Financial Services Authority, it is likely that the credit agreements you use are provided by a different company from your own.
There are different cancellation rules depending on the type of credit being arranged -terms and conditions of the credit agreement must explain
the cancellation rights clearly and you should be able to check these for more information.
For some types of cancellable credit agreement, a seven day cancellation period will apply. Other types of cancellable credit
require a reminder of cancellation rights to be sent by post, and must provide a 5 day cancellation period following the reminder notice.
Important general points to remember include the following:
- Until the moment the credit agreement is properly completed and signed by both parties, the consumer is entitled to withdraw from the agreement.
- If a contract is planned to be financed by a credit agreement, but the credit is not finalised for any reason then it is unlikely the consumer will
have to buy the goods or services, even if they have simply changed their mind. In such circumstances, it would not be lawful to retain a customer's
deposit (or a sum exceeding £5).
- Where a consumer exercises their right to cancel a credit agreement, it will usually also have the effect of cancelling the main agreement to buy
goods or services as well.
There are some exceptions to the rules and if you require advice it is recommended that you speak to your local Trading Standards Service who's contact
details can be found at
www.tradingstandards.gov.uk.
5. Know your Obligations
It is almost certain that from time to time there will be a problem with the goods or services which a customer has purchased from your
business. Knowing at the outset the likely extent of your future obligations to offer assistance with faults can help you plan ahead
financially. In addition, when a problem does arise, being certain of the extent of your responsibilities can help both parties reach
a satisfactory conclusion in the shortest possible time.
Some important aspects to be aware of include the following (None of these obligations can be written out or avoided by use of contract terms):
- If a consumer has bought goods or services from you, the law provides that you have responsibilities for up to six years from purchase even
if no guarantee is provided, or the guarantee has expired (the seller is not responsible for ordinary 'wear & tear' however).
- Even if there is a manufacturer's guarantee, the seller is still responsible to the buyer in law.
- If a business changes its name, or stops trading, the proprietor may still be responsible for the goods they have sold, or the work they
have supplied (this does not apply to limited companies which have been wound up however).
Business guidance regarding the sale and supply of goods is available from the Department for
Business Innovation and Skills website:
Additionally, businesses may wish to contact their local Trading Standards Service in the event of specific questions:
www.tradingstandards.gov.uk.
N.B. Buy With Confidence members can seek advice and assistance from their administering authority in the event of a consumer
dispute or on any of the issues referred to above.
