How much is that doggy in the window?

On 2 October 2023, the Trading Standards (Fair Trading) (Guernsey) Ordinance, 2023 (the Trading Standards Ordinance) introduced a new statutory framework for consumer protection and fair trading in Guernsey. Prior to this date, consumer dealings were conducted on the principle of good faith – a long-standing legal principle with very little recourse if things were to go awry.

The Trading Standards Ordinance is approaching its second birthday, yet a majority of consumers and traders are still unaware of the rights available to them under it, and routes to enforcement if their rights are denied.

The Relationship between Business and Consumer

The first key point with respect to the Trading Standards Ordinance is that it only governs the relationship between a business and a consumer (otherwise known as a B2C relationship) and relies upon the contract that is created when B2C transactions take place.

With every transaction made between a business and consumer, a contract is created. Turning the clock back to the fundamental principles of contract law, a product being placed on a shelf in a shop with a price attached is what is known as an invitation to treat. An invitation to treat could be better described as when a business invites its shoppers to make an offer to purchase.

The moment at which you pick up that product and take it to the check out, you are in fact making an offer to the business to enter into a contract for sale. This offer can then be either accepted or rejected by the business (although in such scenarios it is very rarely rejected). Once accepted by the business, there is an exchange acting as “consideration” for the offer and acceptance – the consumer hands over the money, and the business hands over the product. Just like that, a legally binding contract is created.

The same can be said for providing services, however a written contract is more likely to be in place.

But what happens when the product is faulty, or not what you expected? Prior to the introduction of the Trading Standards Ordinance, consumers had to rely on the goodwill of the business in rectifying the problem. Now, however, there is legislation setting out consumer’s rights and remedies.

Implied Terms

The Trading Standards Ordinance introduces terms that are to be implied into all B2C contracts. These implied terms have existed in UK legislation since the introduction of the Consumer Rights Act 2015 (CRA 2015), and as such they are relatively new legal rights. In fact, the CRA 2015 provided the framework for Guernsey’s legislation.

Contracts for goods

The first term to be implied with respect to contracts for goods in a B2C relationship is that goods are to be of satisfactory quality (section 7). This means that the goods must meet the standard that a reasonable person would consider to be satisfactory, taking into account any description of the goods, the price, and all other relevant circumstances. It also includes the goods’ state and condition.

It is important to note that this term does not apply if a defect is brought to the consumer’s attention before purchasing, and the purchase proceeds despite the goods not being of satisfactory quality.

Secondly, the goods must be fit for a particular purpose (section 8). This purpose is set by the consumer and can be explicitly stated or implied and must be set before the contract is made (i.e., prior to purchase).

Goods must also fit the description assigned to them (section 9). Where purchases are made in bulk, and the supply is by sample as well as description, it is not enough that the majority of the goods match the sample if the goods do not also match the description.

Contracts relating to the supply of services

The Trading Standards Ordinance imports implied terms into contracts for the supply of services. The first implied term is that the service is to be performed with reasonable care and skill (section 46). As with the implied term that a product is of satisfactory quality, reasonable care and skill is to be assessed by the reasonable person but also taking into consideration that the service provider is assumed to be a professional in that area.

Pursuant to section 47, every contract to supply a service is to be treated as including anything that is said or written to the consumer about the trader or the service. This applies where it is considered by the consumer when the consumer is deciding whether to enter into the contract and is known as a representation.

The price paid by the consumer for a service is to be reasonable in accordance with section 48. Under section 48(3), what is a reasonable price is assessed with reference to the circumstances of a particular case.

The service must also be performed within a reasonable time in accordance with section 49. This section applies where the contract does not expressly fix the time for the service to be performed. As with section 48, what is considered to be a reasonable time is assessed with reference to the circumstances of a particular case.

Remedies

With respect to goods, the consumer has a short term (within 30 days) and final right to reject under sections 20 and 22 respectively of the Trading Standards Ordinance. Section 22 also offers a consumer the right to a price reduction in lieu of their right to reject.

A consumer also has a right to partially reject the goods under section 19, under which a consumer can reject some or all of the goods that do not conform to the contract (i.e., are not of satisfactory quality, are not fit for purpose, or do not fit the description).

The right to have an item repaired or replaced is captured by section 21.

Turning to services, where an implied term is breached and the service does not conform to the contract, the consumer is entitled to the right to require repeat performance (section 52), and the right to a price reduction (section 53).

Enforcement

The Trading Standards Service was formed to enforce the Trading Standards Ordinance. Whilst they primarily offer advice and guidance on rectification of issues at hand, they can also take formal enforcement action pursuant to the Trading Standards Ordinance.

Such enforcement action may be:

• Securing an undertaking that the trader will comply with their obligations.
• Securing an enforcement order from the court which compels the trader to comply with their obligations.
• Seeking injunctions relating to unfair terms.
• Prosecuting offences.

Conclusion

The Trading Standards Ordinance has reshaped the consumer relationship and given a legal foundation for consumers to enforce their rights when entering into B2C relationships.

If you require advice in relation to the content of this article, please contact a member of our team who would be happy to help.