Consumer Conditions of Sale by Builders Merchants Federation

Introduction to

The BMF Consumer Conditions of Sale

Builders Merchants Federation 15 Soho Square, London W1D 3HL Tel: 0207 439 1753. Fax: 0207 734 2766 www.bmf.org.uk ÂŠ BMF 2010

CONTENTS

Page

1 INTRODUCTION Why use standard conditions of sale? - Benefits - Limitations Why have separate conditions of sale for trade and retail sales? The BMF Consumer Conditions of Sale

2 HOW TO MAKE THE BMF CONSUMER CONDITIONS OF SALE APPLY Identifying Consumer Customers Making the BMF Consumer Conditions of Sale apply - Legalities - Practicalities

PRE CONTRACTUAL REPRESENTATIONS

4 SPECIAL REQUIREMENTS Selling at a distance - Cancellation - The necessary information Further thoughts on selling on line - Incorporation of terms - Provision of information & general content of website Signing contracts at a customer’s home or place of work Customers’ right to reject or ask for repairs Granting credit to consumers

5 DATA PROTECTION - The Data Protection Act 1998 - Key definitions - Data protection principles - Action list

6 7

MORE ABOUT THE LAW ON SELLING TO CONSUMERS Implied terms in consumer contracts Unfair terms in consumer contracts

APPENDIX Statutory Notice to be added to contracts falling under the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008

1. INTRODUCTION WHY USE STANDARD CONDITIONS OF SALE? You should make every effort to trade on terms and conditions of sale - both for trade and for retail sales. You are obviously not going to negotiate full terms of agreement every time you make a sale. In most transactions the parties only concern themselves with the most fundamental terms - price, quantity, delivery etc. But full terms and conditions of sale are essential elements of the contract. They should not be simply regarded as the “small print”. The proper use of standard terms and conditions of sale avoids the need to settle detailed provisions in every sale or purchase to cover eventualities that hopefully will not occur. The principal benefits and limitations of using standard terms are set out as follows. Benefits Standard terms of business may be used in order to achieve any one or more of the following commercial objectives: • To set out a framework for how you deal with transactions and bring them to a conclusion without the additional time and expense involved in drawing up specific terms for each individual transaction. • To enable you to impose terms favourable to yourself (as far as possible within the constrains of the law) without negotiation. • To provide certainty in relation to transactions which form the main part of your trade through the use of the same set of terms in all cases. • To standardise your contracting procedures, so as to allow contracts to be handled and concluded by more junior staff. Limitations • The standard terms will not be binding on the other party and will therefore be useless if proper procedures are not followed to ensure that they are incorporated and prevail over any competing standard terms which the other party may be seeking to impose (see How to make your standard terms apply below). • There is a danger of staff using the standard terms for transactions for which they are not appropriate. As a safeguard against this, procedures can be established whereby proposed contracts over a certain value using standard terms are reviewed by senior personnel. • The use of standard terms cannot be relied on in place of commercial measures such as the maintenance of adequate credit or quality control procedures: they should be in addition to, rather than in substitution for, such measures. • Standard terms require regular review in order to ensure that they take account of legislative changes or new case law and reflect any changes in the business activities of the company.

WHY HAVE SEPARATE CONDITIONS OF SALE FOR TRADE AND RETAIL SALES? Unless you specifically choose not to sell to consumer customers, for example by selling only to holders of specially issued cards, any sales you make to consumers will be covered by consumer protection legislation no matter that you have Trade Conditions of Sale. This legislation has meant that the legal aspects of trading with consumers and with trade customers has diverged to such an extent that trying to use trading terms designed for trade customers in consumer sales will not only be unenforceable but could bring you into conflict with these customers, and with trading standards, the Office of Fair Trading and the courts.

It is no longer sufficient to use Trade Conditions of Sale in consumer contracts with a disclaimer to the effect that the Terms will not apply where they are in conflict with customers’ statutory rights. That is why BMF has produced the BMF Consumer Conditions of Sale that are separate and in addition to the BMF Model Trading Terms for trade sales.

THE BMF CONSUMER CONDITIONS OF SALE The BMF Consumer Conditions of sale have been prepared by BMF and its legal advisers Irwin Mitchell with the help of BMF merchant members. They were drafted in close cooperation with the Office of Fair Trading who have given them their recognition. The Terms are BMF copyright and should be used ‘as is’ and not be modified in any way. The BMF reserves the right to change and update the BMF Consumer Conditions of Sale as appropriate.

2. HOW TO MAKE THE BMF CONSUMER CONDITIONS OF SALE APPLY IDENTIFYING CONSUMER CUSTOMERS Applying the appropriate set of sale terms is easy with Trade account customers and conversely with consumers making larger or more complex contracts (sales of kitchens/bathrooms, special orders large scale deliveries etc). Recognising a consumer in everyday over-the-counter sales, or when taking telephone orders, is more tricky. Broadly, a consumer is a person who is not dealing in the course of their business, but some legislation includes more specific definitions and conditions. According to government guidance consumers are people who buy for purposes that are not related to their trade, business or profession. In practice, it may be difficult to distinguish between a consumer and a business customer. In most cases, the simplest way to make this distinction will be to ask a customer whether or not they are a trade customer. The distinction will be less easy to make where a customer is ordering goods on the internet or where there is little or no opportunity to talk to the customer before a sale is made. In these cases it may be useful to include give the customer a notice (which could be incorporated on the terms and conditions, on your website or any document which is given to the customer before a sale is made) along the following lines: The terms on which we will do business with you will depend on whether you are a consumer or a business. For this purpose a consumer means any person acting for purposes outside his trade, business or profession. A copy of our standard consumer or business terms of sale are available at [website/ in-store etc]. You should read these terms carefully before purchasing any goods from us.

MAKING THE BMF CONSUMER CONDITIONS OF SALE APPLY A) LEGALITIES It is a commonly thought that printing standard terms and conditions of sale on invoices alone is sufficient to incorporate them into contracts. This is wrong in law. A contract consists in law of “offer” and “acceptance” (as well as other essential elements not discussed here). There must be a clear offer and an unconditional acceptance. A court will look for evidence that the parties were of one mind. You must be able to prove that your customer was aware of the standard terms at the time when the contract was made. The invoice follows the contract and it cannot be said that the customer was aware of terms endorsed upon it at the time when the contract was made. Even if you have made sure that your consumer customer is aware of these Terms you have to be on your guard that your staff do not agree to variations requested by the customer without being clear that a variation has occurred. The court will often be left with no alternative than to take the view that the transaction is governed by the terms which last passed between the parties before something was done consistent with performance of the contract, for instance, delivery. Acknowledgement of order forms endorsed with sale terms are helpful and the strict use of written purchase orders can assist in the incorporation of sale terms. If for some reason you have not incorporated the BMF Consumer Conditions of Sale into the contract, you may be able to convince the customer (or the court) that they have been incorporated as part of a course of dealing between the parties. The courts have been prepared to hold that certain terms are incorporated where, as a result of their consistent use in previous transactions, the reasonable expectation of the parties is that those terms will apply to the particular transaction in question. So a customer may be bound when the standard terms of sale only appear on the reverse of a post-contractual document if: • There has been regular trading between the parties. Several transactions per month over a period of years would be sufficient for these purposes, but three or four transactions over a period of several years are unlikely to be enough. • The trading has been consistent: previous trading must have been on the same terms and a consistent procedure must have been followed. Given the stringent and somewhat uncertain tests which must be satisfied before a court will hold that terms have been incorporated by a course of dealing, it is clear that this is an argument of last resort, to be used in negotiations and, if necessary, in court, if the customer has challenged your terms: it is no substitute for proper contracting procedures as have been described above. To ensure that these sale terms are incorporated into contracts take care in setting up and maintaining standard paper work and procedures. The aim is to be able to prove that your customer or supplier was fully aware of your trading terms. Examples of suitable procedures are set out below.

MAKING THE BMF CONSUMER CONDITIONS OF SALE APPLY – B) PRACTICALITIES In order to maximise the chances of successfully incorporating the BMF Consumer Conditions of Sale in contracts with consumer customers, you must ensure that the terms are brought to the attention of customers at the earliest possible opportunity. The simplest way of doing this is expressly to state in pre-contract correspondence (if there is any) that the BMF Consumer Conditions of Sale will apply to the sale - and to provide a printed copy. However, this may provoke customers into seeking to negotiate the terms. The desire to avoid this must be balanced against the increase in risk that those terms will be considered not to have been incorporated if an express statement is not made in the pre-contractual correspondence. The next best option is to clearly promote the fact that you are trading under the BMF Consumer Conditions of Sale. BMF makes available window stickers and Posters drawing attention to the fact that Retail Customers are covered by the BMF Consumer Conditions of Sale. You should also include the BMF terms: • In brochures, catalogues or other publications. • On quotation forms. • In the acknowledgement or confirmation of order document. • On the delivery notes. If the BMF terms appear on the above documents, there is no harm in putting them on the seller’s invoices as well, because if there is a course of dealing with that particular customer, this will assist an argument that the terms had been brought to the attention of the customer over a period of time.

BMF POINT OF SALE MATERIAL

Call THE BMF on TEL: 0207 439 1753 to order your information pack

Face to face transactions with customers Aim to ensure that your customer agrees to trade on the BMF terms at the outset of the relationship. This can be done by including a clear prominent statement on any written purchase order by which the customer will acknowledge that he has received a copy of the sale terms. An example of wording is: Our standard terms of sale apply to any purchases you make from us. A copy of these terms should have been given to you but, if they haven’t, are available on request. You should read these terms carefully before signing.

Internet Sales For sales which take place via the internet, your standard sales terms should be visibly available and before any transaction is completed, customers should be required to check a box to indicate that they have read your sale terms. An example of wording is: Our standard terms of sale [INSERT LINK TO THE CORRECT PAGE] apply to any purchases you make from us. You should read these terms carefully before clicking on “complete purchase”.

Fax and telephone sales Sales by phone or fax tend to pose more of a problem as it is often impractical to send the full text of your sales terms to a customer before an order is placed. When dealing with customers on the phone, customers can be directed to your company’s website where appropriate and staff can be trained to include phrases such as “all purchases are subject to our standard conditions which are available from our website at [address] or from one of our outlets” into all conversations with customers. Similar references can be made on order acknowledgements which are made by fax. Although both methods may not be effective to incorporate the sales terms into the contract on the first transaction with the customer, it is likely that they will be effective in subsequent dealings.

3. PRE-CONTRACTUAL REPRESENTATIONS You should be aware that it is likely you may be held liable if a member of your sales staff makes statements about Goods sold, if what is said varies the written terms. Examples of this are likely to occur every day. In practice, an employee might give a firm date for delivery or say that Goods are suitable for a particular purpose and a court may hold that either the written terms were varied in spite of a contract term to the contrary or that you are liable because of a misrepresentation by an employee. Alternatively, you may incur liabilities in circumstances where sales staff have made inaccurate or unsustainable statements about products. The courts may, as in the case of statements made in sales literature, find that such statements are contractually binding on the company, either as an additional term of the contract. The likelihood of these problems occurring in practice may be reduced by giving clear instructions to sales staff as to what may or may not safely be said in relation to the products and the contract terms. Marketing staff should be appraised of the dangers of making unsustainable claims in sales literature and of the need to have all such literature approved prior to distribution. The practical rule is: DON’T SAY WHAT YOU DON’T KNOW DON’T PROMISE WHAT YOU CAN’T DO

4. SPECIAL REQUIREMENTS SELLING ‘AT A DISTANCE’ I.E. BY TELEPHONE AND FROM YOUR WEBSITE The Consumer Protection (Distance Selling) Regulations 2000 (the “Distance Selling Regulations”) The Distance Selling Regulations apply when you sell your products or services to consumers (defined as a natural person (not a company or partnership) acting for purposes which are outside his or her trade or profession): • by telephone; • by fax; • on the internet; • on interactive digital television; • by mail order, including catalogue shopping; or • by advertising on television, radio, in newspapers or magazines. The Regulations do not apply to: • business to business contracts; • financial services; • sale of land or buildings; • sale of land plus construction of buildings; • vending machines; • public pay phones; or • auctions. For contracts to which the Distance Selling Regulations apply you are under an obligation to perform the contract (i.e. deliver the goods or services) within 30 days of the contract being made, unless agreed otherwise between the parties. You are also required to give the customer certain information before the contract is formed (such as price, delivery costs etc) which must be set out in a clear and comprehensive manner, including the existence of a 7 day “cooling off” period during which the contact can be cancelled and you must reimburse the purchase price within 30 days. You are entitled to deduct the price of recovering the goods if you have said that returning the goods is at the consumer’s expense and the consumer does not comply with this obligation. You may also deduct a reasonable value of goods that the customer has damaged prior to returning them or which have been caused by the customer not being careful. If the consumer has purchased the goods under a related credit agreement, the Regulations provide for the automatic cancellation of that agreement.

Cancellation The cancellation period starts to run from the date of receipt of the goods by the consumer if you provided the necessary information required by the Regulations in writing prior to the delivery of the goods. If you did not provide this information prior to the delivery of the goods then the cancellation period will begin to run from the date the written information is supplied.

The necessary information Clearly, it is important that you maintain tight control over when contracts may be cancelled, and that you ensure the correct information is provided in writing at the same time as delivery of the goods. The necessary information is: a) the identity of the supplier and, where payment in advance is required, the supplier’s address; b) a description of the main characteristics of the goods; c) the price of the goods or services including all taxes; d) delivery costs (where appropriate); e) arrangements for payment and delivery; f) the existence of a right of cancellation; g) information about procedures for exercising the right to cancel, including:

i) the requirement that the consumer shall return the goods to the supplier; and

ii) whether the consumer or supplier will be responsible for the costs of returning any goods to the supplier or the costs of the supplier recovering them.

h) where the consumer may address any complaints; i)

information about any after-sales service and guarantees; and

j) conditions for exercising any contractual right to cancel an ongoing supply contract of unspecified duration or exceeding one year. Items a-f above, are also required to be given prior to conclusion of the contract. For example, if the sale is concluded by telephone, the information should be given in a telephone script. A right to cancel should be set out in your standard terms or, if sent separately to the customer, would need to accord with relevant provisions within your standard terms.

FURTHER THOUGHTS ON CONTRACTING ONLINE Incorporation of Terms The ordinary rules of contract apply when forming a contract over the internet and so, as set out above, there must be a clear offer and an unconditional acceptance for a contract to be formed. You need to be careful when displaying goods for sale on a website and should avoid such a display being an online “offer” open for acceptance by unlimited numbers of customers. This could result in you being contractually bound to supply unlimited goods resulting in demand outweighing ability to supply. Instead you should aim for your website to be a “shop window” i.e. an invitation to the customer to make an offer to purchase the goods which you are then free to accept or reject. Again, for the BMF Consumer Conditions of Sale to be incorporated into your contract you must be able to prove that your customer was aware of the terms at the time when the contract was made. Provision of Information and General Content of Website The Electronic Commerce (EC Directive) Regulations 2002 (the “ECommerce Regulations”) came into force on 21 August 2002 and apply to contracts made online. The ECommerce Regulations (along with the Companies (Trading Disclosures) Regulations 2008) require that a supplier provides customers with specific information on its website including: • details about itself such as name, geographic address, company registered office (if different), company registered number and place of registration and VAT number;

• the different technical steps to follow to conclude the contract (not required for contracts formed by e-mail); • whether or not the contract will be filled by the supplier or a third party (not required for contracts formed by e-mail); • the technical means for identifying and correcting input errors prior to placing an order; and • the languages offered for the conclusion of the contract. You may choose to set out this information in your terms or on a separate page. Where you provide the customer with terms and conditions applicable to the contract, they must be provided in a way that allows the customer to store and reproduce them e.g. they should be capable of being printed from the website or copied into a word processing document. You must also acknowledge receipt of a customer’s order without undue delay (although this is not required for contracts formed by e-mail).

SIGNING CONTRACTS AT A CUSTOMER’S HOME OR PLACE OF WORK Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008 The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008 came into force on 1 October 2008 and give consumers a right to cancel a contract that they enter into away from a trader’s place of business e.g., during a trader’s visit to the consumer’s home, workplace, outside a local shopping centre or ‘doorstep selling’. The regulations require the trader to give notice to the consumer of his or her right to terminate where a contract has been formed in such circumstances. The BMF Consumer Conditions of Sale do not include the required notice as it will not be appropriate to include it in most cases. An appropriate form of wording is set out in the Appendix to this booklet for use in circumstances when you enter contracts which fall under the regulations. Please note: the wording set out in the schedule is prescribed in the regulations and should not be amended without first taking legal advice. The notice informs the consumer of his or her rights and should be attached to the front of the terms when the contract is formed in the following circumstances: • during a visit by you to a consumer’s home or place of work, or to the home of another individual; • during an excursion organised by you away from business premises; and • after an offer made by the consumer during such visit or excursion. The regulations do not require the consumer to give a reason for the cancellation. The cancellation period is seven calendar days from the receipt of the notice of the right to cancel.

CUSTOMERS’ RIGHT TO REJECT OR ASK FOR REPAIRS Sale and Supply of Goods to Consumers Regulations 2002 (“the Consumer Regulations”) The Consumer Regulations came into force on 31 March 2003. They amend parts of Unfair Contract Terms Act 1977 and the Sale of Goods Act 1979 and provide additional remedies to consumers in specified circumstances. They also impose obligations on you if you offer guarantees to consumers and set out provisions on the legal status of such guarantees. The main changes introduced by the Consumer Regulations are: • where a consumer returns faulty goods in the first six months from the date of the sale the consumer does not have to prove the goods were faulty at the time of sale – it is assumed that they were. If the retailer does not agree it is for him/her to prove that the goods were satisfactory at the time of sale;

• in addition to the consumer’s right to reject unsatisfactory goods within a reasonable time, the Consumer Regulations introduce a right to have goods repaired or replaced or have a price reduction in the goods. Until the introduction of the Consumer Regulations, these additional remedies had no legal basis even though they were often provided by retailers to consumers in practice; and • any guarantee offered by the retailer/manufacturer will be legally binding and must be available on request, for example a manufacturer who advertises a product is guaranteed for 5 years.

GRANTING CREDIT TO CONSUMERS Consumer Credit Act 1974 Where goods are provided to consumers on credit or under a hire arrangement the Consumer Credit Acts 1974 and 2006 (and other relevant subordinate legislation) will apply and a Consumer Credit Licence will be needed. These Acts contain wide provisions affecting the drafting and use of consumer credit agreements and specific advice should always be obtained before offering consumers credit. You can however allow a consumer an extended payment period (e.g. 30 days) or can offer up to four part payments plus reasonable interest in a period of less than a year (364 days) without it being considered a consumer credit agreement. The standard terms produced by the BMF will not be suitable for credit contracts entered into with consumers. A failure to follow specific procedures relating to the provision of consumer credit could cause sums owed by a consumer to be irrecoverable and lead to your prosecution.

5. DATA PROTECTION The Data Protection Act 1998 The Data Protection Act 1998 came into force on 1 March 2000 replacing the existing 1984 legislation. The aim of the legislation remains to protect an individual’s rights to privacy but the new provisions impose further obligations on the data controller and greater rights to the data subject including a right to claim compensation for damage and/or distress suffered.

Key Definitions “Personal Data”

data relating to a living individual who can be identified from those data including expressions of opinion or indications of intention;

“Data Controller”

the person (including a legal person – a company or other organisation) responsible for determining the purposes and the manner in which personal data are processed and for complying with the Data Protection Principles;

“Data Subject”

an individual who is the subject of Personal Data.

“Processing”

the Act covers all data processing. This is so widely defined that it is difficult to contemplate any activity that is not covered. In particular, it includes “obtaining”, “holding” and “disclosing” data.

Data Protection Principles The Data Controller is responsible for complying with eight Data Protection Principles (DPPs).

The first DPP is that Personal Data shall be processed fairly and lawfully. In a credit context either the individual must have consented to the processing or the processing is necessary for entering into or performing a contract where the Data Subject is a party. The consent must be informed and freely given and must be relevant and appropriate to the particular circumstances. There are more extensive consent rules relating to sensitive data which in the credit context could include health issues (which may be relevant in respect of insurance cover) and also criminal convictions, allegations and proceedings which may be relevant when investigating suspected fraud. To process data fairly and lawfully it is necessary to give or “have readily available” to the individual: • the identity of the Data Controller; • the purposes for which the data are intended to be processed; and • any further information which is necessary to enable processing in respect of the Data Subject to be fair The necessary information will include the purposes for which the data are to be processed, the likely consequences of such processing and, in particular, what disclosures of information are envisaged. It will be the responsibility of the Data Controller to advise the individual where the information will be sent and in a credit context this will include credit reference agencies, factoring companies and credit circles. The duty to notify the Data Subject also covers data that are obtained from third parties. The obvious time to obtain consents and give the relevant notices in respect of new customers is on completion of credit application forms and notification of trading terms. The further seven DPPs are that data should:• be obtained for specified and lawful purposes; • be adequate, relevant and not excessive; • be accurate and up to date; • not be longer than necessary; • be kept in accordance with the rights of the Data Subject; • be kept securely; and • not be transferred outside the EEA without the Data Subject’s explicit consent. The Data Subject not only has the right to details of the Personal Data being held but can also prevent unwarranted processing, unwarranted direct marketing and can control and have certain details for automated decision-making. If there is a breach of the DPPs not only is the Data Controller sanctioned but the individual is also entitled to compensation if damage and/or distress are suffered. If the Data Subject is concerned about the processing of data he or she can enlist the assistance of the Commissioner by asking for an assessment to take place.

Data Protection Action List Undertake a Data Audit • What personal data do you hold/use? • What do you do with it? • Where does it come from? Did you obtain it fairly? • Who do you send it to? • Who has access to it? • Why do you have it? • How long do you keep it? Consents and Notification • Does the Data Subject know the identity of the Data Controller? • Does this Data Subject know the purposes for which the data are to be processed? • Have you told the Data Subject any other necessary information to make the processing fair? • Does the Data Subject know where the data has come from? • Has the Data Subject consented to the transfer of the data from you to any third party? • Is the data sensitive? – If so, have you obtained explicit consent? Consent may be obtained from the Data Subject by an endorsement on a credit application form. Suitable wording may be:Data Protection Act I understand that you may hold and use details in your possession about me as set out in clause 10 of your Sale Terms, a copy of which I have received. This will apply to the person signing the contract or a consumer credit application form.

6. MORE ABOUT THE LAW ON SELLING TO CONSUMERS The following Section gives a more detailed background to the law that the BMF Consumer Conditions of Sale have to take into account. Relevant legislation is: • Sale of Goods Act 1979 • Sale and Supply of Goods Act 1994 • Supply of Goods and Services Act 1982 • Unfair Contract Terms Act 1977 • Unfair Terms in Consumer Contract Regulations 1999 • Sale and Supply of Goods to Consumers Regulations 2002; • Consumer Credit Act 1974 • Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008 • The Consumer Protection (Distance Selling) Regulations 2000 • The Consumer Protection from Unfair Trading Regulations 2008 • The Electronic Commerce (EC Directive) Regulations 2002

• The Freedom of Information Act 2000 • The Data Protection Act 1998

IMPLIED TERMS IN CONSUMER CONTRACTS The Sale of Goods Act 1979 together with recent additional and amending legislation sets out the general principles of the law of sale of Goods. It states a number of terms which are implied into all contracts for the sale of Goods unless the parties make an agreement to the contrary. The right to agree otherwise is regulated by the Unfair Contract Terms Act 1977. The implied terms include: • a warranty of title; The seller must have the right to sell the Goods. • a term that the Goods will correspond to their description; A sale of branded Goods or the sale of building materials which are fully described are all sales by description. When Goods are displayed and selected by the customer a sale is usually not a sale by description unless the customer relies on a label or packaging that includes a description. • a term that whenever Goods are sold in the course of business there is an implied term that the Goods are of satisfactory quality. “Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the Goods, the price (if relevant) and all other relevant circumstances.” (Sale of Goods Act 1979 s14(2A)) The quality will be determined taking into account the state and condition of the Goods and among other things, their fitness for all the purposes for which Goods of that kind are commonly supplied; their appearance and finish; freedom from minor defects and safety and durability. These factors were introduced in a 1994 amendment to the Sale of Goods Act 1979 as a result of consumer pressure. The new definition of quality will apply to all contracts of sale unless the implied term is excluded in trade sales. The seller is not liable if he draws specific attention to the defects or if the customer actually inspects the Goods supplied and the inspection ought to have revealed the defects. • a term that Goods supplied shall be reasonably fit for the purpose for which they are required when that purpose is made known to the seller expressly or by implication. For example, fire extinguishers which exploded in a fire were held to be unfit for the purpose required. If Goods are used for a variety of different purposes the customer must expressly make known the purpose for which he requires them if he is to take advantage of this implied term. A seller is not liable where the customer expressly, or by implication, does not rely on the seller’s skill or judgement. For instance, an architect might specify a particular type of boiler for a contractor to order from a Merchant. Whilst the Merchant might be liable if the boiler was defective, he would not be liable if the wrong type of boiler had been specified and it was unsuitable for the particular installation, unless the Merchant had held himself out to the architect as an adviser and expert in that branch of trade. • Sale by Sample A term that where Goods are sold by sample, the bulk of the Goods must correspond to the sample, the customer must be given the opportunity of comparing the bulk to the sample and the Goods must not be of unsatisfactory quality in a way that inspection of the sample would not have revealed.

UNFAIR TERMS IN CONSUMER CONTRACTS Under the terms of the Sale of Goods Act 1979, the implied terms set out above apply unless the parties to the contract of sale reach specific agreement to the contrary. The right to exclude liability imposed by these implied terms is limited by the Unfair Contract Terms Act 1977 which for convenience is called “UCTA”. UCTA draws a distinction between trade customers and consumers and for a number of years after its introduction it was a commonly held view that the Court was only likely to interfere in a consumer contract (although this view has been challenged in recent years). The key provisions of UCTA are:It is not possible to exclude or restrict liability for:• death or personal injury caused by negligence; • breach of statutory implied term as to title; or • in consumer contracts, breach of the statutory implied terms regarding conformity of Goods with sample/description, satisfactory quality and fitness for purpose. Consumer protection was extended by the Unfair Terms in Consumer Contracts Regulations 1999 and other legislation. These Regulations run in parallel and at times overlap the provisions of Unfair Contract Terms Act 1977. The Regulations cover standard form contracts which have not been individually negotiated and accordingly standard trading terms will be covered. The BMF Consumer Conditions of Sale are fully compliant with these regulations. The Regulations demand that the standard terms are fair. Any term will be unfair if contrary to the requirement of good faith it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. Language which is not plain and intelligible is enough to tip the balance. The schedule to the Regulations gives some illustrations as to what may be considered to be “unfair” in any given circumstances, for instance:• a term which allows the forfeiture of a customer’s deposit unless there is a corresponding right for a customer to be paid an equivalent sum if the supplier terminates the contract; • a term providing for the price of Goods to be determined at the time of delivery or allowing the supplier to increase the price unless the customer is given the corresponding right to cancel the contract if the final price is deemed to be too high in relation to that agreed when the Goods were ordered; • a term obliging the customer to fulfil all his obligations even though the supplier does not perform his. For example, reserving the right to deliver late or not to deliver if there is a shortage of building materials but still requiring the customer to accept delivery if the Goods are available; and • a term reserving to the supplier the right to determine whether Goods supplied are in accordance with the contract. The Regulations provide that if a term of the contract is unfair it is not binding on the consumer. A similar result occurs with “unreasonable” exclusion clauses under UCTA. If a complaint is made to the Director General of the Office of Fair Trading s/he has the power to take the offending supplier to Court and obtain an injunction to prevent the continued use of that term.

Appendix STATUTORY NOTICE TO BE ADDED TO CONTRACTS FALLING UNDER THE CANCELLATION OF CONTRACTS MADE IN A CONSUMER’S HOME OR PLACE OF WORK ETC. REGULATIONS 2008 NOTICE OF THE RIGHT TO CANCEL You have the right to cancel the contract made between us if you wish to do so. Your right to cancel may be exercised by delivering or sending a notice to cancel to [INSERT NAME AND/OR POSITION] at the following address within the next 7 days: [INSERT ADDRESS]: or by email to [INSERT EMAIL ADDRESS]: Your notice to cancel will be deemed to be received by us as soon as it is posted or sent. If you wish to cancel the contract made between us, you may use the detachable slip below should you wish to do so. Please note: you may be required to pay an amount to us to reflect any services we have provided if you cancel the agreement between us within the next 7 days. This notice has been given to you on

(Member representative to insert date).

If you wish to cancel the contract you MUST DO SO IN WRITING and deliver personally or send (which may be by electronic mail) this to the person named below. You may use this form if you want to but you do not have to. (Complete, detach and return this form ONLY IF YOU WISH TO CANCEL THE CONTRACT). To:

The Registered Care Manager

[INSERT ADDRESS]: or by email to [INSERT EMAIL ADDRESS]: I/We (delete as appropriate) hereby give notice that I/we (delete as appropriate) wish to cancel my/our (delete as appropriate) contract made between us on (insert date). Signed Name and Address Date