A question that pops up time and time again on the Internet is to do with unfulfilled orders from various websites. Either orders go unfulfilled, or only part of the goods that were ordered is actually delivered. People want to know what their rights are in this situation, and what remedies they can ask for – and rightly so. Well, here’s the answer.
- Partially-filled orders are a form of breach of contract.
Your Right to Return Goods
The right to a ‘cooling off’ period, in which you have the right to cancel an order, is enshrined in the Consumer Protection (Distance Selling) Regulations 2000. These regulations cover anything sold “at a distance”, which includes online, mail order, and telephone purchases.
Under these regulations, you have seven days from the date of receipt of the goods in which to return them as new, and cancel the order. There is no obligation to give a reason for cancelling the order, and you are entitled to your money back.
From the point of view of a partial order, this right to return in unaffected and you can therefore return what you have received and cancel the order outright. Of course, this will not get you the goods you are missing so if you are not put off by the fact that the company has not sent everything you ordered, there are other options.
Your Right to Receive the Missing Goods
Every order is a contract for the purchase of goods and as such, the contract is a strict document with the following express terms:
- you will pay a certain price for the goods in question; and
- they will supply those goods, in the agreed amounts.
Any reduction in the number of goods supplied is therefore either an outright breach of the contract or an attempt to change the terms without consultation. You are not obliged to accept any change to the contract once it has been made (which it was at the time of purchase), and may hold the supplier to the original agreement.
A breach of contract grants you the right to cancel the contract entirely, and to recover any loss endured because of the breach; which includes the cost of postage should you need to return any goods which were supplied to you. It also grants you the right to have the terms of the contract upheld, if you so desire.
When receiving only a partial order, you may therefore:
- demand the rest of the order be supplied; or
- return those goods that were supplied and be reimbursed, including for the cost of postage.
Your Right to a Refund
Because only receiving part of an order is an effective change to the contract, you may cancel the contract and be refunded all of your money (plus, as detailed above, any costs incurred in returning what goods you did receive) but there is another option.
Instead of returning the goods already received, you may alternatively choose to accept the changed contract, and receive a refund for the price of the goods not received. This is useful where the goods received are unavailable elsewhere, or where the goods not received can be re-ordered (possibly from elsewhere) at a later date.
It is worth remembering that when an order is accepted by a distant seller, be it a website or another form of mail order company, both parties have entered a binding contract for the supply of goods. Each party must uphold the terms of the contract, and may only alter those terms with the express permission of the other party.
Where a company accepts an order for goods but only supplies part of that order, they are in breach of the contract unless you specifically agree that they may supply only part of the order; and you are entitled to be refunded the cost of any unsent items. You are under no obligation to accept partial fulfilment of an order, and may return the partial goods if you so wish.
The Need for Vigilance When Dealing By Post
A contract is not formed until both sides agree to the terms
Anyone who has the misfortune of seeing daytime television in the UK cannot have failed to notice the glut of “sell your gold!” adverts that plague our airwaves. The fact that there are now so many of these companies should be warning enough that their customers are not getting a fair deal but now the Office of Fair Trading is investigating, the sheer size of the problem will no doubt soon come to light.
These companies, and others like them in various fields, need to be handled carefully if at all. They raise the issue of the average British person’s usual lack of knowledge of how the law works and what legal protections there are for dealing at arm’s length.
The Three Stages of Contractual Negotiations
The first thing to bear in mind is the difference between an agreement, an offer and an invitation to treat, because these three things not only form the basis for a contract but are also treated very differently in law.
Contractual negotiations usually begin with an invitation to treat. Put simply, this is a statement that you are open to negotiations on a certain deal and others are invited to make you an offer. In the case of one of these gold-buying companies, the invitation to treat would come in two forms: the company advertising its services, and you sending them your gold.
Note that by sending them your gold, you are saying you are interested in selling it if the price is right. It is important to remember that not only have you yet to state outright that you will sell your gold but you have certainly not agreed on a price for it. One of the reasons for the OFT’s investigation of these companies is that some companies are apparently trying to make declining their pitiful offers very difficult.
At this stage of the proceedings, you have the right to reject their offers and get your gold back, no questions asked.
The Offer
The offer is when one side states their terms for the deal, and the other side gets to choose whether or not to accept them. In terms of these gold-buying companies, the offer comes not when the customer sends the gold to the company, but when the company states how much they are willing to pay for the gold that has already been sent.
An offer can be accepted or rejected at any time, unless an agreement has already been reached or the offer has been superseded by another offer (whether better or worse). Rejecting an offer need not end negotiations and both parties are free to extend further offers to one-another, but once rejected the same offer cannot subsequently be accepted unless it is re-submitted.
At this stage, you still have the right to reject the company’s offer and get your gold back.
When is an Agreement Reached?
An agreement is reached only when both sides accept the terms and agree to be bound by them. It is as simple as that. Once an agreement is reached however, it cannot be ended without the consent of both parties.
What If The Company Refuses to Return My Gold?
It is clear from the news reports surrounding the OFT’s investigation that some companies are “not honouring” the customer’s right to refuse their meagre offer (which can be as low as 6% of the true value of the gold) and get their gold back. Recalling that until an agreement is reached, the customer has the right to refuse the offer to buy, it is clear that the customer still owns the gold until the offer is accepted.
It should therefore be clear that if the customer owns the gold and the company refuses to return it, the company has stolen it. Their refusal to honour your right to have your property back is therefore a criminal matter. Discuss it with the police if this happens to you.
In summary, it is clear that vigilance is always necessary when making a transaction; be it to purchase something face to face or at a distance through the post or the Internet. Get as much information from the other party as possible before handing over your money or property and in the case of selling gold, always look for a better deal than these companies are offering. After all, if they can make a huge profit from your gold, so can you by cutting out the middle man.
Why a Snail is Important to Consumer Law
Donoghue v. Stevenson redefined how duty of care is established for the tort of negligence
While the majority (if not the entirety) of negligence lawyers in the UK are now well aware of the neighbour principle in establishing a duty of care, this was not always the case.
Before the famous 1932 case of Donoghue v. Stevenson, whether a person owed a duty of care to another person was decided using the Hart approach; a significantly more complex device.
The Hart Approach
In Definition and Theory of Jurisprudence, H.L.A. Hart argued that trying to clearly define what a legal right or a legal duty was would lead to immense problems, and that instead the law would be better served by rejecting the idea that there was a ‘one size fits all’ definition.
He instead argued that while there would be a ‘core’ definition of any given concept, such as a legal duty, there would be a far larger penumbra or ‘grey area’ in the law; and therefore definitions must be loose in order to adequately cover these situations.
The problem in this respect is that grey areas lead to ambiguities in law. As P. Harris states in An Introduction to Law, signs stating “No vehicles may enter this land” may be designed to prevent cars from entering, but Hart’s approach could just as easily be used to successfully argue for the banning of aircraft. Clearly a more structured approach is in order.
Enter The Snail
In 1928, Mrs Donoghue and a friend entered a café in Paisley, where her friend ordered a bottle of ginger beer. The bottle was made of dark glass, preventing its contents from being inspected, and Mrs Donoghue drank a glass of the ginger beer before pouring out the remainder. On pouring, she discovered the decomposing remains of a snail (or possibly a slug). The experience left her suffering both shock and gastroenteritis.
Because it was not Mrs Donoghue who purchased the bottle, she had no recourse under standard contract law to pursue a claim for the losses she suffered as a result of drinking the contaminated drink. She therefore brought a negligence case against Stevenson, the manufacturer.
Determining Negligence Under Donoghue v. Stevenson
For her case to be successful, she needed to prove a duty of care existed between Stevenson as the manufacturer and herself as the end consumer despite their being no clear contractual line between them.
The case went to the House of Lords, who ruled that a duty of care did indeed exist. In his assessment of the case, Lord Atkin summarised the situation in his famous ‘neighbour principle’ rule of negligence, which states:
“You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.”
What is a Neighbour in Law?
So who is “your neighbour” in Lord Atkin’s view? Essentially, this the issue of proximity. While it is true that no-one has a duty in English law to be careful about the entire world, any person who is sufficiently close to your actions, or inactions, and whom you can reasonably be expected to take note of may be deemed to have a right to be taken care of. As Lord Atkin put it:
“[Neighbours are] persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation…”
Essentially, therefore, you are likely to have a duty of care toward anyone whom you should be aware of as potentially being at risk from act act, or inaction, on your part. It should therefore be obvious why Stevenson was found to have a duty of care toward Mrs Donoghue as the end consumer of their product; despite there being no contractual basis for their relationship.
Negligence and Duty of Care in Modern English Law
Since its inception in 1932, the rule in Donoghue v. Stephenson has been refined and the modern method of establishing whether a duty exists between two parties is stated in Caparo Industries Plc v. Dickman [1990] 1 All ER 568.
The rule in Caparo v. Dickman tells us that a duty of care will exist if three key factors are met:
- the likelihood of damage is foreseeable;
- the claimant is not too remote from the defendant; and
- it is just to impose a duty, having regard to all the facts.
Donoghue v. Stevenson was a landmark case that redefined the tort of negligence and streamlined the process of establishing whether a duty of care exists. From this ruling, a new, more manageable form of tort law has been established and the case remains a landmark decision throughout the common law world.
Your Right to a Refund: Defective Product Law and the Sale of Goods Act
Goods must be delivered in their advertised condition. Photograph by DarkSideX
So you’ve just bought yourself a new DVD player, or a washing machine, or anything else in fact. You get it home, set it up and turn it on. It doesn’t work. We’ve all been there at some time, right? If you’ve also found that when you try to take the thing back to the shop you bought it from, they won’t give you a refund, read on.
Some stores in the UK cling to the idea that their returns policy somehow trumps the law. Some stores are simply ignorant of what their duty is. They will claim they have a ‘no refunds’ policy and will only allow replacements or ’store credit’ but it is not their decision to make, it’s yours. This goes for online and catalogue purchases, too.
Buying Goods by Description and Online
With the Internet being such a big player in the shopping lives of many people, it is important to understand just what your rights are. Under section 13 of the Sale of Goods Act 1979, all contracts for sales of goods by description (which covers most, if not all, goods purchased on the Internet) have a condition attached that the goods delivered to the buyer will actually match the description provided.
Because this is a condition, as opposed to a warranty, the buyer is granted four specific rights when faced with a defective product:
- the right to return the goods;
- the right to a refund;
- the right to claim damages (but only when the product has caused a loss); and
- the right to terminate the contract.
So, if you were to buy a brand new washing machine and when it was delivered and set up correctly, it promptly flooded your kitchen and ruined your new kitchen floor, you would be within your rights to return the washing machine and get not only your money back (or perhaps a replacement washing machine, if you still trusted the shop) but also the cost of replacing the damaged floor.
The usual rules on minimising the damage count here, of course; so it is best to try to keep any damage to a minimum, otherwise you risk having to front some of the cost of repairs yourself.
Unsatisfactory Quality and Goods Unfit for Purpose
When buying something in a shop, it should go without saying that anything you buy should live up to reasonable standards of quality. Similarly, if you specifically state to a salesperson that you want to buy a DVD recorder, they should sell you a DVD recorder and not a simple DVD player. It sounds simple, but unfortunately not everyone plays by the rules.
Section 14(2) of the Sale of Goods Act 1979 inserts another condition into all sale of goods contracts; this time requiring that all goods purchased be of “satisfactory quality”. Whether the goods in question are of satisfactory quality will, of course, depend on the circumstances but if something is bought brand new and does not work, it is reasonable to suggest that it is not satisfactory.
Meanwhile, the condition that a product be reasonably fitness for any purpose stated to the seller prior to purchase is inserted by Section 14(3) of the 1979 Act. Because of this, anyone sold a DVD player when they clearly stated that they wanted a recorder would be able to demand a refund on returning the product. As defective product lawyers across the country will attest, consumer protection law is not limited to mere faulty goods.
Can you lose these rights?
The right to reject the goods and terminate the contract cannot be taken away by any store policy or a ‘no refunds’ sign (no matter how prominent) but there are still two situations where they can be lost:
- Failure to report dissatisfaction in a reasonable time; and
- Altering the goods to such an extent that they cannot be returned in the same state that they were received.
As with the question of what constitutes “satisfactory quality”, what can be regarded as a reasonable timeframe to express dissatisfaction will depend on the circumstances. Altering the goods, however, should be mostly self-explanatory. Suffice to say opening the packaging is unlikely to count in most cases.
The Legality of a No Refunds Sign
At this point, you may be wondering what the point of a “no refunds” sign is if it has no actual legal standing. The simple fact of the matter is that some people either don’t know what the law is, or don’t care. Sometimes they fall into the latter category and hope their customers fall into the former. It is therefore a good idea to remember about the Unfair Contract Terms Act 1977.
Section 6 of the 1977 Act deals with exemption clauses (also referred to as exclusion clauses). The section specifically counters any attempt to get around sections 13 and 14 of the Sale of Goods Act 1979 when dealing with a sale between an individual and a business. Because of this, a store returns policy limiting returns to store credits or refunds is null and void; no matter how many notices are displayed.
As if that was not enough (and probably because some people simply won’t be told), the Consumer Transactions (Restrictions on Statements) Order 1976 makes it a criminal offence to use a void clause in a consumer sale of goods agreement. There really is no excuse for trying the old “we don’t do refunds” trick now.
In short, the Sale of Goods Act 1979 combined with the Unfair Contract Terms Act 1977 gives consumers the right to return goods for a full refund if those goods are faulty. This right cannot be taken away by purported terms in any sales contract, but they will disappear if the buyer delays too long before returning the product, or alters it in a substantial fashion. It is therefore best all ’round if faulty goods are returned promptly.
