Why is this important?
Consumer protection for businesses
If you're running a business, you may make contracts with other businesses to buy their goods or services. But as a business, you may not have the same rights and protection as an ordinary consumer.
Your rights will depend almost completely on what's in your contract.
If you're a sole trader you count as a business buyer rather than as a consumer for any contracts you make for your business.
Read this page to find out more about your rights as a business buyer of goods or services.
What can you do about unsatisfactory goods or services?
When you buy goods or services from a business for your own business, you'll need to check your contract very carefully to see what it says about unsatisfactory goods or services.
When you buy as a consumer, the law says you have certain rights, called statutory rights.
However, as a business buyer, the person you buy from can take most of these statutory rights away, as long as they make this clear in your contract. They can do this by putting an exclusion clause in your contract.
The contract doesn't remove your statutory rights
If the contract doesn't remove any of your statutory rights, you'll have the same rights as other consumers. So for example, if you're buying goods they should be of satisfactory quality and match any description given. If something is wrong, you can ask the seller to put things rights, such as giving you a refund, repair or replacement.
However, as a business buyer, you can't normally ask for a full refund if the fault is so slight that it would be unreasonable for you to take goods back. You can still claim compensation.
If you're buying a service, it should be carried out with reasonable care and skill, for the price you've agreed and within a reasonable time. If something is wrong, you can ask the trader to put it right or pay you compensation if someone else has to put it right.
- More about consumer rights if goods are faulty
- More about consumer rights of if services aren't unsatisfactory
The contract removes your statutory rights
If the contract removes your statutory rights, there may be very little you can do if something goes wrong with your goods or services. However, it may be possible to challenge an exclusion clause. You'll need to take legal advice if you want to do this.
How do you know if the contract takes away your statutory rights?
If the person who sold you the goods or services has taken away your statutory rights, there should be something in your contract about this. For example, it might say the seller isn't responsible for goods that are unsatisfactory, don't match their description or aren't fit for purpose. Or it might say that the seller isn't responsible for any loss you've suffered because of their lack of care or skill. This type of content in a contract is called an exclusion clause.
Is there anything a seller can't put in a contract with a business buyer?
If you're a business buyer, it isn't legal for a seller to put the following types of terms into your contract:
- a term which says the seller isn't responsible if somebody dies or is injured because of their carelessness
- a term which says the seller isn't responsible if the goods they're selling aren't theirs to sell.
If there's a term in your contract which says something like this, it may be against the law and you should get advice to find out what you can do.
What can I do if my contract has an exclusion clause?
Negotiating with a seller
You could try to negotiate with the seller to take out any exclusion clauses from the contract. This will probably depend on your relationship with the seller. If it's an important contract, you may want to get advice before signing anything.
Challenging an exclusion clause
If you're a business buyer and there's an exclusion clause in your contract, you should check that it's reasonable. If you think it isn't reasonable you can challenge it. The law which allows you to challenge clauses like these is called the Unfair Contract Terms Act.
An exclusion clause might not be reasonable if, for example:
- the contract was part of a standard form and not negotiated individually between you and the seller
- you didn't have the bargaining power to negotiate better terms.
It's up to a seller or trader to show that any exclusion clause they put in a contract is reasonable.
If either you or the seller goes to court about the terms of your contract, the court might decide that the exclusion clause is unreasonable. This would mean you don't have to keep to the terms of the clause.
You may need to get advice about how to challenge an exclusion clause.
Extra protection for sole traders
If you're a sole trader and you paid by credit, you may be able to make a claim against the credit company if things go wrong. Only ordinary consumers and sole traders have this right – it doesn't apply to other types of business trader.
- For more about getting legal advice, see Using a solicitor
- More about unfair contract terms in consumer contracts
- More about how to make a complaint
- More about terms and conditions in a consumer contract
- If you need more help
Other useful information
- You can get other useful information from the GOV.UK website at: www.gov.uk