Sales Law & Legislation

Sale of Goods Act• The Sale of Goods Act 1979 is the main piece of legislation helping

buyers to obtain redress when their purchases 'go wrong'. It is in the interest of anyone who sells goods or services to understand the implications of the Act for them and the responsibilities they have under it.

• Essentially, the Act states that what you sell must fit its description, be fit for its purpose and be of satisfactory quality. If not, you - as the supplier - are obliged to sort out the problem.

• Aside from the legal issues, it makes sense to comply with the requirements of the Act in order to build customer relationships.

• Example in practiceA travel agent pretends to have personal knowledge about a resort or hotel with which he or she is actually totally unfamiliar. This contravenes the Act.

Supply of Goods & Services• The Supply of Goods and Services Act 1982 aims to protect consumers against

bad workmanship or the poor provision of services. It covers contracts for work and materials, as well as contracts for pure services, and remember, this still applies even in everyday situations – such as going to the hairdressers or the dry cleaners – where you have no physical contract at all. Just as with Sale of Goods, Supply of Goods and Services legislation contains statutory rights, which don’t have to be specifically mentioned in any contract, but cannot be excluded. These are:

• That the supplier will carry out the service with reasonable care and skill • That the work will be carried out in reasonable time (unless timeframe has been

specifically agreed) • That the work will be carried out at reasonable cost (unless cost has been

specifically agreed) • The legislation also details the remedies which are available to consumers in

the event that any one of these statutory terms are breached. • Examples in practice

A tour operator continues to use a hotel for package holiday accommodation although it received a number of complaints about poor hygiene conditions the previous year. A travel agent gives information about visas which is not up-to-date. These both contravene the Act.

Trades Description• Description of the characteristics of goods, including their quality,

quantity, and fitness for the purpose for which they are required. Under the Trade Descriptions Acts 1968 and 1972, making a false trade description is a criminal offence in English law.

The offence may be committed by applying a false trade description directly, such as on a label attached to goods; indirectly, such as by deliberately concealing faults in goods; or in an advertisement. Misleading statements are also illegal.

• Examples in practiceA travel agent leaves late availability cards in the window after the holidays have all been booked. A tour operator describes a hotel as a short walk from the beach when in fact it is over a mile away. These both contravene the Act.

Unfair Contracts Terms• Transactions between businesses are covered by UCTA. In general,

businesses are assumed to be free to enter into whatever contracts they agree between themselves. However, UCTA places a number of restrictions on the contract terms businesses can agree to. Specifically, it lays down rules for the ways in which vendor businesses can use exclusion clauses to limit liability in certain areas:

• excluding liability for death or injury is not permitted in any circumstances

• excluding liability for losses caused by negligence is permitted only if it is reasonable

• excluding liability for defective or poor-quality goods is also permitted only if it is reasonable

• Example in practiceA tour operator claims that it is not responsible for faulty plumbing in a hotel used by its customers. This contravenes the Act.

Consumer Protection

• If you sell products or service to consumers from a base in the European Community (EC), then you are obliged to comply with this act. The Consumer Protection Act 1987 implements the European Commission's (EC) Product Liability Directive. The main purpose of the Act is to impose strict liability for defective products primarily on someone who is regarded as the 'producer' of a product, not the person supplying the product. The Act aims to provide clear rules by which an injured person can contact the person responsible for the damage. The Act only applies where the consumer has acquired a defective product which causes damage; a product which does not satisfy or is not fit for purpose is covered by the Sale

of Goods Act 1979. • Example in practice

A tour operator does not make it clear that possible aircraft fuel surcharges are not included in the price of the package. This contravenes the Act.

Data Protection The Data Protection Act gives individuals the right to know what information

is held about them. It provides a framework to ensure that personal information is handled properly. The Act works in two ways.

• Firstly, It states that anyone who processes personal information must comply with eight principles, which make sure that personal information is:

Fairly and lawfully processed, Processed for limited purposes, Adequate, relevant and not excessive, Accurate and up to date, Not kept for longer than is necessary, Processed in line with your rights, Secure, Not transferred to other countries without adequate protection

• Secondly, the Act provides individuals with important rights, including the right to find out what personal information is held on computer and most paper records.

Should an individual or organisation feel they're being denied access to personal information they're entitled to, or feel their information has not been handled according to the eight principles, they can contact the Information Commissioner's Office for help. Complaints are usually dealt with informally, but if this isn't possible, enforcement action can be taken.

• Examples in practice - A travel agent leaves details of one customer on screen visible to the next customer attended to. A tour operator uses data about its customers for purposes not declared on the official register. These both contravene the Act.

Data Protection Act cont…• Recording Employees• In 2003 there were some major amendments to the Data Protection Act**, in particular, in relation

to the monitoring of employees and recording of information, be it data, video or voice. Organisations doing this must now let employees know they are being recorded before doing so. Legally you must make telephone lines that are not recorded available for employees to make private telephone calls (these can be pay phones). Good practice guidelines advise that you tell employees why you are recording them.

• Recording Customers• The organisation must put in place a process whereby every customer is notified that his or her

call may be recorded and what the purpose for recording is, prior to the telephone conversation is taking place.

• For incoming enquiries, many organisations insert a notification into the IVR system, as this ensures that every caller is notified. The phrase: “Your call may be recorded for training or monitoring purposes” is most commonly used, because it notifies the caller that they may be recorded and tells them for what purpose. Equally, recipients of outbound calling must also be notified at the beginning of every conversation, to give the person opportunity to object.

• Some organisations notify customers through adverts and literature. This is not required or ideal, as it cannot guarantee that every caller will see it before calling.

• Record-on-Demand• The same principle applies – the agent must advise the customer that they are about to be

recorded, before hitting the record-on-demand button. They should not record any call without notifying the customer first, no matter what the circumstances (i.e. if the customer is irate).

EC Directive of Package Travel

• The other regulations that are really important for both tour operators and travel agents are contained in the EC Directive on Package Travel 1992, which also defines exactly what a package holiday is.

• According to the Package Travel Regulations 1992 a package holiday is a combination of not less than two of the following, when they are offered for sale at an inclusive price and when the service covers a period of more than 24 hours and includes overnight accommodation:

-Transport -Accommodation -Other tourist services which make up a significant proportion of the package

• Examples of these other services would be excursions, transfers to and from the hotel, car hire, and the availability of holiday reps.

• The Directive also makes it clear that package holidays can be offered by travel agents as well as tour operators.

Consumer Credit

• The Consumer Credit Act 1974 requires most businesses that offer goods or services on credit or lend money to consumers to be licensed by the office of fair trading. Trading without a licensing arrangement is a criminal offence and can result in a fine and/or imprisonment.

The General Product Safety Regs (GPS) 2005

• The regulations demand that the selling organisation must sell products that are safe, in normal or reasonable foreseeable use. This is why charity shops rarely sell second hand electrical goods any more.

• Fines of up to £20,000 and up to 12 months in prison could be imposed for companies selling unsafe products

Important Note

It is vital you understand the laws and acts that affect sales as well as your role within them. On reflection of the laws and legislations stated in this PowerPoint your actions or reports may have an impact on your role and your organisation.Your knowledge and understanding will be tested in this section.