Consumer Rights Act 2015 and Digital Content

Partner Debbie Brett, in our Corporate & Commercial team, explains the Consumer Rights Act 2015 and digital content.

The new Consumer Rights Act 2015 (CRA) comes into force on 1 October 2015 and will mark an important change for consumer law in England & Wales in respect of rights and remedies relating to ‘digital content’.

What is Digital Content?

‘Digital Content’ refers to data which are produced and supplied in digital form including software, e-books, music, films and ‘apps’ .

The Sale of Goods Act 1979 (SGA) and the Supply of Goods and Services Act 1982 (SGSA) have conventionally been the basis of consumers’ rights when purchasing goods and services.

Consumers have become increasingly dependent on digital content but our current consumer rights legislation fails adequately to protect a consumer’s rights in respect of defective digital content. The SGA defines ‘goods’ as ‘tangible items’ and arguably digital content which is delivered electronically, for example, a film downloaded to a computer, or a virtual character purchased when playing a computer game,  does not fall within the definition of ‘goods’.

This means that until the CRA is enacted, a consumer seeking a remedy for defective digital content cannot rely on strict legal rights that a consumer purchasing goods or services can.  The CRA has therefore established ‘digital content’ as a category of product and has applied familiar consumer rights to digital content. The new CRA legislation aims to bring consumer rights into line with our modern digital age.

Statutory Rights

The new rights under the CRA apply to all paid-for digital content, including content which is supplied free alongside paid-for content, and content paid-for with a facility that was originally paid for with money, for example virtual currency in a computer game, a token or a gift voucher.

However, if digital content is given away, for example, free computer system software, the statutory rights do not apply.

Once enacted, the new legislation will imply a set of statutory rights into a contract for the supply of digital content to consumers (as opposed to business-to business transaction), regardless of the express terms included in the contract. The terms imply that the digital content must be:-

1. Of satisfactory quality - the standard is that which a reasonable person would consider satisfactory taking account of all relevant factors
2. Fit for a particular purpose
3. As described – digital content must match any descriptions given

Remedies

The remedies available under the CRA for defective digital content are similar to those for tangible goods, namely:-

1. Right to repair or replacement
2. Reduction in price- this is only triggered if the remedies of repair and replacement are not possible or the trader has not complied with the right to a repair or replacement within a reasonable time
3. Repair of damage
4. Refund

“Mixed supply” of services and Digital Content

The CRA retains the implied terms of the SGSA. Therefore, where there is a contract for the supply of both services and digital content, for example, a music streaming service, the provisions of the CRA apply to the digital content and the services provisions apply to the service, namely that service must be carried out with reasonable care and skill, in a reasonable time, for a reasonable charge.

The CRA has introduced two new remedies for “mixed supply” contracts where a trader beaches these terms, namely:-

1. The consumer may request that the service is performed again where the service has not been performed with reasonable care and skill; and
2. If this is not possible, or where the service is not performed within a reasonable time, the consumer may request an appropriate price reduction.

As a result of the CRA, businesses will need to ensure that their terms and conditions, and any relevant contracts, reflect the rights and remedies under the new legislation.

For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.