Consumer Contract Regulations and Pitfalls for Traders – What are they and when do they apply?
With potentially catastrophic effects upon traders such as Builders, Carpenters, Plumbers, Electricians, and many other businesses who deal directly with customers, The Consumer Contracts Regulations 2013 (the “CCR”) are nothing short of a minefield for the average sole-trader or small business.
In this first installation of a three-part blog series, we will assist small businesses and sole-traders by outlining what the CCR are, and when they will apply.
When do the Consumer Contract Regulations Apply?
The CCR apply to the vast majority of situations where a trader enters into a commercial relationship with a consumer. The CCR will apply regardless of whether you have a formal written contract, a verbal contract, or even just an implied agreement.
The CCR do not apply in a small number specific and limited circumstances, importantly where the relationship is respect to the construction of a new building or redevelopment of an existing building into a substantially new building,
What is a Trader?
For the purposes of the CCR, a ‘trader’ is a person who is acting for purposes relating to his trade, business, craft, or profession; so in the course of his trade. It does not matter whether the trader is acting personally (as a sole trader), on behalf of another sole trader, or on behalf of a limited company or other business.
Further, under the CCR, the trader will be the ‘contractor’ and not any sub-contractors or employees of the contractor.
What is a Consumer?
For the purposes of the CCR, a ‘consumer’ is an individual acting for purposes wholly or mainly outside of that person’s trade, business, craft, or profession; and so not in the course of his trade.
Therefore, where a person engages a builder to undertake works, it would not matter if the person engaging the builder is himself a builder by trade, he would still be a ‘consumer’ for the purposes of the CCR.
Businesses such as limited companies are not capable of being consumers and as such are excluded from the CCR, as everything that a corporate entity does is ‘for the purposes of its trade’.
How can we help?
If you are a trader and are facing a claim for breaching the CCR, or simply want to check your current procedures to make sure you are compliant, our specialist team of Commercial Dispute Resolution Solicitors have substantial experience of dealing with this area. To speak to a member of the team and discuss your options and potential liabilities, call 01202 525333 or send an email.
In our next article, we will be specifically looking at the requirements of the CCR, and what you as a trader need to know in order to make sure that you don’t fall foul of the common pitfalls.