Services

Consumers have various rights when they buy a service, though there are no hard and fast rules, and every case is different. Under the Sale of Goods and Supply of Services Act, consumers are entitled to expect that:

  • You have the necessary skill to supply the service
  • You provide the service with the proper skill and care
  • Any materials you use in the service or goods supplied as part of it are of “merchantable” (in other words acceptable) quality

Sometimes businesses try to exclude one or more of these terms from the contract. But you can only do so when it is fair and reasonable, and you have to bring the specific exclusion to the consumer’s attention.

But what exactly is “fair and reasonable”?

Unfair terms

In reality, many services use standard contracts, which are pre-prepared and non-negotiable. The Unfair Terms in Consumer Contracts Regulations apply to any term that has not been individually negotiated in a contract between a business and a consumer.

In essence an unfair contract term is one that is significantly weighted against the consumer and is not used in good faith by the business. For example, it might be hidden away in small print to which the consumer has no access.

Where terms of the contract are in writing, always ensure that they are in plain, intelligible language. If there is doubt about the meaning of a term, the interpretation most favourable to the consumer will prevail.

A court would be unlikely to consider as reasonable a clause that absolves a supplier from any liability for his or her own carelessness.

Service contracts

Whenever you take an order for a service, a contract is formed between you and your customer. This agreement can be oral or written. Many businesses nowadays also conclude contracts with customers over the telephone or internet, where a traditional signature is not necessary. It is important to note that you are obliged to provide consumers with certain information before concluding the contract. These information requirements are set out in the Consumer Rights Directive, which was implemented in Ireland as the European Union (Consumer Information, Cancellation and Other Rights) Regulations, S.I. 484 of 2013.

The contract should spell out the price for the service, and this should be the complete price. Under law the price must include any taxes such as VAT and not hide any extra charges.

When drawing up or signing a contract, make sure that it covers likely problems and possible misunderstandings. Include details such as:

  • What the job involves
  • When it should be completed
  • How payments should be made – a payments schedule
  • Whether there is a deposit. If so, how much is it, and what are the circumstances in which you are entitled to hold onto it?
  • Whether there is a guarantee for the work

Guarantees

A guarantee is basically a written promise that the contractor will fix problems that happen for a certain time after finishing the job. As the seller, you should state in the guarantee what problems are covered by the guarantee, or if there are any exclusions. Or a service you are giving on an ongoing basis may include guarantees such as a specific refund for a loss of service.

Often goods or materials are provided as part of the service. They may also come with a manufacturer’s guarantee – a promise by the manufacturer to repair or replace the specific product if it is faulty during a certain time after purchase. Where relevant, provide the customer with this guarantee documentation at the appropriate handover stage.

If the customer wants to cancel a service

When a service turns out to be unsatisfactory, it’s up to you as the service provider to sort out the problem. Each situation will be different – it may be a case of undertaking appropriate repairs or replacing faulty parts, for example, or a refund for loss of service.

If the customer simply wants to cancel the service, the way this is done should be spelt out in the terms and conditions of their contract with you. It should specify, for example, whether they are obliged to pay a cancellation charge.

Right to cancel

Where a service is purchased by distance means, consumers can withdraw from the contract and seek a full refund at any time up to 14 days from the day the contract was concluded. Consumers will be liable for any usage they have had of the service before its cancellation. If digital content has been bought other than on a durable medium (CD, etc.), the withdrawal period ends as soon as the digital content is downloaded or streamed, as long as the consumer has agreed to the beginning of the performance of the digital content and has consented to the loss of a right to cancel.

You do not have to accept the cancellation of a service if the service contracted for has already been fully performed, with the consumer’s agreement, however, consumers need to be informed in advance if they do not have a cancellation right.

This period of withdrawal has been extended from the seven day withdrawal period that previously existed in law. You are responsible for informing the consumer of this right to cancel. The consumer doesn’t have to give a reason for cancelling the contract, but they are responsible for the cost of returning the goods (as long as you made this cost clear to them beforehand).

You must provide consumers with access to the model cancellation form which can be found in the relevant legislation (Schedule 3 to the Regulations). You don’t have to send a hard copy with each delivery, but you must make the form available to consumers online. If you want, you can provide a sample cancellation form can be provided on your website, making it easier for consumers to avail of this right.  Once a consumer has informed you of their wish to cancel, you must acknowledge this cancellation without delay. This acknowledgement must be communicated on a durable medium.

There are consequences for not providing information on the right of withdrawal. If you do not inform the consumer of the right of withdrawal, the cancellation period will be extended to twelve months from the date it would have expired if the information had been provided. If you provide the information within this 12-month period, the withdrawal period expires after 14 days from the date the consumer receives it.

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