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Legal ResponsibilitiesThere are certain laws that exist to make sure that traders deal fairly with consumers. They exist to protect the consumer, but businesses also benefit because these laws:
- outlaw disreputable business practices;
- encourage fair competition between businesses;
- offer businesses better protection from anti-competitive practices.
If a business does not abide by these laws, awards of damages can be made against them, hefty fines can be levied and/or key personnel could face imprisonment if the infraction warrants it.
What does the law say about dealing with consumers?
The three main laws in Bermuda that govern businesses and service providers in how they conduct business with consumers are the Sale of Goods Act 1978 (as amended in 2002), Supply of Services Act 2003, and the Consumer Protection Act 1999.
These are the key facts outlined in these laws:
The Sale of Goods Act 1978 (as amended in 2002)
- Whenever goods are bought they must conform to contract (in other words, they should meet the standards that a reasonable person would regard as satisfactory);
- It is the seller, not the manufacturer, who is responsible if goods do not conform to contract;
- If goods do not conform to contract at the time of sale (i.e. are faulty), purchasers can request their money back ‘within a reasonable time’. (This is unspecified and will depend on circumstances);
- If a part of the goods does not conform to contract, then the consumer can reject those goods that do not conform and keep those that do, and thus be entitled to compensation for those goods that don’t.
Supply of Services Act 2003
- A supplier of a service must carry out that service with the same reasonable care and skill that is set by a person trained and practiced in that discipline;
- If no definite date has been set for time of completion then the work must be completed within a reasonable time;
- If no price has been set, then the charge must be reasonable. A reasonable price would be judged by the standard costing for that particular service;
- If a supplier of a service breaches the conditions of the contract (e.g., fails to carry out the work ordered), the consumer has a choice of continuing with the contract and claiming compensation from the trader for his failure to carry out what was agreed, or the consumer can treat the contract as cancelled;
- Any goods (spare parts) supplied in the course of the service must be of satisfactory quality and fit for their purpose. If they are not, the consumer is entitled to a repair, replacement or compensation. Again, it should be remembered that as the contract is between the consumer and the supplier of services, it is the supplier against whom the consumer has an action should the goods supplied be of unsatisfactory quality;
- A supplier of a service who has broken a contract may also be liable for any consequential loss which is suffered by the consumer. Ultimately, it is for the courts to decide whether or not a breach of contract has occurred and the remedy to which the consumer might be entitled.
- The Consumer Protection Act 1999 protects consumers from unfair business practices, unconscionable acts and unsafe consumer goods;
- Unfair business practices are covered under section 11 of the Act and include false or misleading representations to consumers about products and services;
- Unconscionable acts can be just as damaging and include excessively one-sided contracts that benefit only the trader, grossly overpriced products and entering into a contract with a consumer who you know lacks the capacity to understand it;
- Consumer Affair’s inspectors have the power to enter premises, seize products and documents and make test purchases of the goods;
- Violation of the Act can impose a maximum of $15,000 fine and/or imprisonment for up to 12 months.
For more detailed information about these laws, download the Consumer Affairs booklet, “The Responsible Trader: A reference guide to the laws that govern how you conduct business with consumers”
Further information can also be found at www.bermudalaws.bm.
Test Your Knowledge of Consumer Laws
Quiz - Sale of Goods Act 1978 (as amended in 2002)
Answers supplied at end of quiz.
1. What are the three main laws in Bermuda that govern businesses and service providers in how they conduct business with consumers?
2. True or False – The Sale of Goods Act 1978 (as amended in 2002) main piece of legislation is to assist buyers to obtain redress when purchases go wrong.
3. True or False: Under the Sale of Goods Act if the quantity of goods is less than or more than contracted for, the consumer can reject some or all of the goods.
4. True or False: A supplier of goods can refuse to deal with a customer’s complaint about a faulty product on the grounds that the warranty has expired.
5. The camera I bought does not work as it should. It is still under warranty so I take it back and the seller says that I have to return it to the manufacturer. Who is responsible for the repair, the seller or the manufacturer?
6. True or False: A consumer purchased a rust proof outdoor planter which turned rusty within two weeks. He is entitled to his money back.
7. True or False: A consumer has the right to reject goods in respect of defects if they were pointed out to him prior to the sale.
8. True or False: Under the Sale of Goods Act consumers have up to 6 years to claim compensation.
9. True or False: When selling goods, the goods do not have to be free from minor defects.
10. True or False: In the first 6 months the onus is on the business to prove there was no fault at the time of the sale. After 6 months the onus is on the customer to prove there was a fault at the time of the sale.