Does a Sole Trader Have Consumer Rights (Cooling Off Period)

[ukresident]

Hello,

 

Just purchased a laptop from PC World Under the "Smart Plan" option for business which is managed by their partner "RentSmart"

 

I'm a sole trader and when I signed up, I was pretty sure its the right thing for me. However, three days later, I'm a bit hesitant and would like to get out of the cotract under the "Cooling off Period"

 

Do I have any chance in doing so? Does a Sole Trader have the same rights as a consumer when it comes to the "Cooling Off Period"?

 

Thanks!

[rory32]

Under the Consumer Credit Act 2006 sole traders have the same protection as consumers. Did you sign the agreement on their premises?

[ukresident]

Under the Consumer Credit Act 2006 sole traders have the same protection as consumers. Did you sign the agreement on their premises?

 

Thanks Rory! No I signed it at the PC World Premises, not the premesis of the company I'm dealing with for the rental agreement "RentSmart".

 

However the agreement did include sole trader in the text. Does that matter?

 

Also, I sent them an email informing them I wanted to exercise my rights under the "Cooling off period" and cc'd PC world .

 

I did it this morning (2 working days after the purchase) so will update you on what they say.

 

Thanks again!

Edited December 20, 2008 by ukresident
punctuation/facts

[ukresident]

I did it this morning (3 days after the purchase) so will update you on what they say.

 

here is the response:

 

We are writing ion response to your email and renting equipment under contract No. xxxxxx.

We are unable to cancel your contract as the signed paperwork has no been received and the contract finalised.

I would draw your attention to the fact you have signed a Business-to-Business none-cancellable contract as reflected in the Hire Agreement and Terms and Conditions (please see attached for your reference). As a Business-to-Business contract, the agreement is void of a cooling of period as per consumer agreements. We must advise you that you are liable for the equipment and payments under the terms and conditions of the contract. As a sole trader the non - cancellable, fixed-term, pre-executed Smartplan is between Rentsmart Ltd and you in your own right as your business is not a separate legal entity.

With reference to your request to cancel the above contract the agreement that you have entered into is for a minimum rental period of [XX] months. As per clause 2 of the terms and conditions, the hire agreement

“..will continue for the minimum rental period…” therefore should you wish to terminate the contract early the balance of the remaining payments must be made in full. The settlement figure is shown above.

Following the early termination the equipment will need to be returned to Rentsmart in “..good order, repair and working condition…” (see Clause 8). However, should you wish to retain the equipment rather than return you may make an offer to purchase it from Rentsmart.

Until such a time as your contract is terminated in accordance with its terms, you must adhere to the terms and conditions of your contract.

We trust that this assists in the matter and if we can be of any further assistance please do not hesitate contact me at the address listed.

[ukresident]

Does the above response make sense?

 

I know this is not a law forum so I'm not expecting a legal answer but do you guys think that the arrangement I've signe up to nullifies my rights under the Consumer Credit Act of 2006 (cooling off period)?

 

Also, any advice on where I can go to seek free legal advice?

 

thanks!

[ukresident]

Just been digging around and it doesn't look good:

 

1) the office of fair trade has placed some exceptions to the cooling off period including "rental agreements that have to be in writing ie a lease for three years or more" which is what I fall under.

 

2) it seems that RentSmart have "Smartly" placed two notices, one above the signature strip that says "the consumer credit act governs this agreement" and another "read this carefully before signing" notice after the signature strip that says the consumer credit act does not govern this as it relates to "Sole Traders"!

 

In any case I will be filing a complaint with the OFT on Monday, specifically about this contract but more generally about my whole experience with PC World/RentSmart and the method by which they sell these "Rental Agreements".

 

Thanks for hearing me out!

Edited December 20, 2008 by ukresident

[banker_rhymes_with]

Hello ukresident!

 

I regret I don't have the reference to hand, but I'm pretty sure that Sole Traders and small Partnerships (2 people I think) are classed as Consumers.

 

The clause they have added may not be valid and/or an Unfair Term.

 

Hopefully someone who knows more than me will jump in to help.

 

Cheers,

BRW

Edited December 20, 2008 by banker_rhymes_with
Typo

[ukresident]

Hello ukresident!

 

I regret I don't have the reference to hand, but I'm pretty sure that Sole Traders and small Partnerships (2 people I think) are classed as Consumers.

 

The clause they have added may not be valid and/or an Unfair Term.

 

Hopefully someone who knows more than me will jump in to help.

 

Cheers,

BRW

 

thanks BRW,

 

I will let you know what OFT says on Monday. BTW I love this forum, been reading aoround and can't believe I didn't come across it before!

 

Cheers and Merry X-Mas!

[rory32]

Agreements regulated under the 1974 Act etc.

 

1 Definition of “individual”

 

In section 189(1) of the 1974 Act (definitions) for the definition of “individual” substitute—

“‘individual’ includes—

(a) a partnership consisting of two or three persons not all of whom are bodies corporate; and

(b) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership;”.

 

Exemption relating to businesses

Before section 17 of the 1974 Act insert—

“16B Exemption relating to businesses

 

(1) This Act does not regulate—

(a) a consumer credit agreement by which the creditor provides the debtor with credit exceeding £25,000, or

(b) a consumer hire agreement that requires the hirer to make payments exceeding £25,000,

if the agreement is entered into by the debtor or hirer wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.

(2) If an agreement includes a declaration made by the debtor or hirer to the effect that the agreement is entered into by him wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him, the agreement shall be presumed to have been entered into by him wholly or predominantly for such purposes.

(3) But that presumption does not apply if, when the agreement is entered into—

(a) the creditor or owner, or

(b) any person who has acted on his behalf in connection with the entering into of the agreement,

knows, or has reasonable cause to suspect, that the agreement is not entered into by the debtor or hirer wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.

(4) The Secretary of State may by order make provision about the form, content and signing of declarations for the purposes of subsection (2).

(5) Where an agreement has two or more creditors or owners, in subsection (3) references to the creditor or owner are references to any one or more of them.

(6) Nothing in this section affects the application of sections 140A to 140C.”

[ukresident]

Thanks Rory,

 

so ...

 

"(b) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership;”.

 

applies to me a sole trader?

 

and ...

 

the total contract is just over 3K to be paid over 48 months so does that mean my scenario applies under the Consumer Credit Act?

[rory32]

so (b) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership;”. applies to me a sole trader?

 

Yes.

 

the total contract is just over 3K to be paid over 48 months so does that mean my scenario applies under the Consumer Credit Act?

Again yes. The only agreements now excluded from the Act if you enter into them as a sole trader are those over 25K.

[ukresident]

Yes.

 

Again yes. The only agreements now excluded from the Act if you enter into them as a sole trader are those over 25K.

 

Nice! Thanks Rory!

 

So why is the guy I'm corresponding with insisting they are right? Is it because they have placed an provision that nullifies the Consumer Act? Is that legal?

 

Do you agree with my next step of filing an official complaint to OFT or would you do it differently?

 

Cheers!

[rory32]

No I would get that complaint into the OFT. Your rights are statutory - they can not just be waved by a company because it suits them.

[ukresident]

No I would get that complaint into the OFT. Your rights are statutory - they can not just be waved by a company because it suits them.

 

Cheers Rory, I really really appreciate all your help!

 

Will keep you all informed of developments in this thread,

 

all the best!

 

UKR

[banker_rhymes_with]

Thanks Rory32!

 

Agreements regulated under the 1974 Act etc.

 

1 Definition of “individual”

 

In section 189(1) of the 1974 Act (definitions) for the definition of “individual” substitute—

“‘individual’ includes—

(a) a partnership consisting of two or three persons not all of whom are bodies corporate; and

(b) an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership;”.

 

Exemption relating to businesses

Before section 17 of the 1974 Act insert—

“16B Exemption relating to businesses

 

(1) This Act does not regulate—

(a) a consumer credit agreement by which the creditor provides the debtor with credit exceeding £25,000, or

(b) a consumer hire agreement that requires the hirer to make payments exceeding £25,000,

if the agreement is entered into by the debtor or hirer wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.

(2) If an agreement includes a declaration made by the debtor or hirer to the effect that the agreement is entered into by him wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him, the agreement shall be presumed to have been entered into by him wholly or predominantly for such purposes.

(3) But that presumption does not apply if, when the agreement is entered into—

(a) the creditor or owner, or

(b) any person who has acted on his behalf in connection with the entering into of the agreement,

knows, or has reasonable cause to suspect, that the agreement is not entered into by the debtor or hirer wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.

(4) The Secretary of State may by order make provision about the form, content and signing of declarations for the purposes of subsection (2).

(5) Where an agreement has two or more creditors or owners, in subsection (3) references to the creditor or owner are references to any one or more of them.

(6) Nothing in this section affects the application of sections 140A to 140C.”

 

That was exactly the quote I knew I had read but didn't have to hand.

 

CAG in action yet again, excellent.

 

Cheers,

BRW

[ukresident]

(2) If an agreement includes a declaration made by the debtor or hirer to the effect that the agreement is entered into by him wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him, the agreement shall be presumed to have been entered into by him wholly or predominantly for such purposes.

(3) But that presumption does not apply if, when the agreement is entered into—

(a) the creditor or owner, or

(b) any person who has acted on his behalf in connection with the entering into of the agreement,

knows, or has reasonable cause to suspect, that the agreement is not entered into by the debtor or hirer wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.

 

 

How do you guys interpret this?

 

I did mention that I will be using it for work purposes, but the PC World Rep also knew that my work is from home and that the unit will not only be used for Work. Does that affect my rights under the act?

 

Thanks again!

Edited December 21, 2008 by ukresident
edited facts

[rory32]

Does that affect my rights under the act?

 

No as you would be using it predominantly for work purposes.

[ukresident]

No as you would be using it predominantly for work purposes.

 

Thanks Rory!

[ukresident]

Doens't look good chaps,

 

Just contacted ConsumerDirect.gov.uk and they bascially said that the statement placed in the RentSmart contract (found under the signature strip!) that says: "read this carefully before signing" nullifies my rights under the act because it specifically says the consumer rights under the act do not cover sole traders.

 

So basically, according to them my statutory rights are nullified.

 

Unless anyone has any other ideas, I will have to dust this off as an expensive lesson and honour my comitments under the agreement.

 

Thanks again for your help folks!

 

UKR

Edited December 22, 2008 by ukresident