Consumer Rights Disputes

Understanding Consumer Rights: Recent Clarification on Post-Rejection Use of Goods

 The ability of consumers to enforce their rights in respect of defective goods has been subject to some recent clarification in a decision worthy of note to traders.

In King v Black Horse Limited & Anr [2024] CSIH 3, the Inner House of the Court of Session was asked to consider the position of a consumer that continued to use goods having already rejected them in terms of the Consumer Rights Act 2015 (the “2015 Act”).

The right of rejection

Traders will be familiar with the implied terms that apply to certain contracts as a result of the 2015 Act.  The most commonly encountered term implied in a consumer contract for the supply of goods is that those goods are to be of satisfactory quality.  This is set out in section 9 of the 2015 Act which sets out the test against which quality is to be measured.

Where there is a breach of the terms implied by the 2015 Act, the consumer has a number of options. In addition to remedies applicable to any contract, there are a number of statutory remedies:

1. The short-term right to reject;
2. The right to repair or a replacement; and
3. The right to a price reduction or the final right to reject.

In summary, the short-term right to reject allows a consumer to reject defective goods within 30 days and receive a refund. After that period the trader will generally be afforded an opportunity to repair or replace defective goods.  If that is not possible, or he fails to address the defect, the consumer has the right to have the purchase price reduced (and keep the goods) or exercise the final right to reject and receive a refund.

Continued use of goods following rejection

What is the position if a consumer rejects goods in terms of the 2015 Act but continues to use them?

The answer provided by the common law was that the use of goods after rejection was prohibited. By continuing to use rejected goods, the right of rejection had been lost. The application of that rule could be traced back to cases from the late 1800s.

In the King case, Mr King contended that a vehicle purchased by him was defective.  He had rejected the vehicle in terms of the 2015 Act but continued to make use of it. He made payment in terms of the hire purchase contract and taxed the vehicle.

Before the Sheriff Court and Sheriff Appeal Court the hire purchase provider and dealership successfully argued that the right to reject had been lost by Mr King’s continued use.  Mr King successfully appealed to the Inner House of the Court of Session.

The Court clarified that there is no blanket prohibition on the post-rejection use of goods by a consumer having rejected them in terms of the 2015 Act. It was noted that a complete ban on post-rejection use would place undue economic pressure on the consumer.

The practical effect

The decision is an important one for traders but the limitations should be noted.  It is confirmation that there is no automatic prohibition on post-rejection use.

The Court was clear that there remains the possibility of a consumer barring themselves from insisting on the rejection.  This would require an assessment of all the circumstances to establish whether the consumer has acted in such a way that justifies the conclusion that the rejection has been abandoned.

Gilson Gray regularly acts for traders and consumers in defective goods cases.  Should you wish to discuss any Consumer Rights dispute, please contact Fraser Cameron.