2 September 2010 | Adviser Q&A
I have noticed on a quote from a supplier that the product cannot be cancelled or returned. Is this legal? Surely this contravenes the Sale of Goods Act or the Distance Selling Regulations.
Purchasing manager, Bristol
Dick Jennings, solicitor, RDY Jennings & Co
A statement that the product cannot be cancelled or returned is piffle. A seller can limit the buyer’s rights by agreement in specific areas, but only with carefully chosen words.
In English law a buyer has no automatic right of cancellation or return. However it can return goods, or sometimes rescind a contract, for breach of various legal rights. The Sale of Goods Act 1979 imposes some of these rights (you mention the Distance Selling Regulations, but they protect consumers only).
A supplier can limit those requirements in some respects. It can also limit possible remedies for breach. Mostly, though, any limit must be “reasonable” under the Unfair Contract Terms Act 1977, which the words you’ve seen obviously aren’t.
Beware if the supplier is based outside the UK. If the words you’ve seen would sway the supplier’s local courts that may count out cancellation or return in practice whatever the English law position.
Susan Singleton, solicitor, Singletons
The Consumer Protection (Distance Selling) Regulations 2000 apply only to contracts where a business sells to a consumer. If you work in a large firm you will benefit from any right to cancel the contract. If you do want a right to cancel before the goods are delivered you need to include such a term in your conditions of purchase and then ensure those conditions apply.
If you have a signed master agreement with the supplier which would prevail over unsigned terms passing between the parties, you would need to amend that signed agreement to include this term.
If not, you need to ensure your purchase order is sent with a copy of your terms. If the supplier replies accepting the offer with their terms, make sure you reject those and send your own terms back including your term about a right to cancel.
Under English law once a contract is made it is binding unless otherwise agreed. Even if the goods are not to be delivered for a year, if the buyer cancels the seller is entitled to the profit it would have made on the sale.
Jimmy Desai, partner, Blake Lapthorn
If the purchaser and supplier are businesses, then the supplier disallowing the cancellation or return of the product is likely to be legal. If the purchaser wants specific cancellation rights then this should be written into the contract.
Under general law purchasers of goods can benefit from legislation such as the Sales of Goods Act 1979 and UCTA. Legislation can also imply terms into contracts between the supplier and purchaser as to the quality of goods sold. For example, the goods must be “fit for purpose”.
Under UCTA, certain implied terms cannot be excluded from the contract, particularly where one party deals as a consumer. However, where both parties act during the “course of business” (or, in some instances on standard terms of business) the supplier can exclude liability as to its implied undertakings if this exclusion is reasonable. Whether the exclusion is reasonable depends largely on the relationship between the parties (ie, relative bargaining power), the nature of the goods and the market.
• Make sure your contract reflects that you want the right to cancel or return goods
• You will probably be able to return goods if they are not fit for purpose
• The Distance Selling Regulations apply to consumer purchases only
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