Comply with the law in the provision of goods, facilities and services

The sales process – from the initial approach to long after the sale is completed – is governed by a number of important legal requirements designed to protect your customers.

Playing it by the book can help your business build and maintain an honest and trustworthy reputation.

This guide will help you identify which laws apply to your business including online selling rules, distance selling regulations and data protection rules. It will help you understand how to comply with these rules.

It provides a brief introduction to general trading rules and the special rules for retailers or specialised sectors.

It looks at late-payment legislation that could affect you if you are considering taking action against late payers or if you tend to pay invoices after their due date.

The guide also covers the Proof of Age Standards Scheme (PASS), which helps you comply with the law on age-restricted sales.

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Supplying satisfactory and safe goods and services

The Sale of Goods Act and the Supply of Goods and Services Act make it a legal requirement for every business to ensure that the products or services it sells meet minimum standards.

All goods you sell must:

• correspond with any description given – verbally, in writing or in an illustration
• be of satisfactory quality
• be fit for their purpose

All services you supply must be carried out:

• with reasonable care and skill
• within a reasonable time and for a reasonable charge, unless these matters have previously been agreed with the customer

Service providers must also provide specific information such as their business name and address and details of the service to be provided. See our guide on customer protection.

Customers who are unhappy with goods may be able to claim compensation, while in other circumstances they may be able to ask for repair or replacement of the goods.

If any services you provide don’t meet the requirements specified above you will be in breach of contract and customers may well be entitled to compensation.

Your responsibility to your customers can last for a maximum of six years, dependent on the nature of the goods or services (five years from discovery of the problem in Scotland).

For more information, see our guide on the Sale of Goods Act.

The Consumer Protection from Unfair Trading Regulations give consumers the right not to be misled by the actions or omissions of traders. They also protect consumers from aggressive or high-pressure selling techniques.

Business customers are protected by rules that prohibit misleading advertising.

Download a basic guide to the Consumer Protection from Unfair Trading Regulations [opens in a new window].

If anyone incurs damage to their private property, is injured or killed as a result of using goods you have supplied you can be sued under product liability law. See our guide on product liability.

Your local Trading Standards service monitors and enforces product safety and day-to-day fair-trading practices. Find your local Trading Standards office on the Trading Standards Institute (TSI) website.

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How equality law applies to the provision of goods, facilities and services

Under the Equality Act 2010 people who access your goods, facilities and services are protected from discrimination on the basis of a ‘protected characteristic’.

The relevant protected characteristics are:

• age
• sex
• disability
• religion or belief
• sexual orientation
• gender reassignment
• pregnancy and maternity
• race, which includes ethnic or national origins, colour and nationality

Direct discrimination

This occurs when a person is treated less favourably than another person because of a protected characteristic. For example, if you refuse to serve a customer because of their sexual orientation.

Direct discrimination can also take place if you discriminate against someone because:

• they associate with someone who has a particular protected characteristic
• you (wrongly) perceive that person to have – or deliberately treat them as if they have – a particular protected characteristic

Indirect discrimination

This occurs when there is a rule, policy or practice that applies generally but which particularly disadvantages people who share a particular protected characteristic.

For example, a ‘no dogs’ policy in a hotel would indirectly discriminate against those who need a guide dog to help them access premises.

However, such a policy or practice could be justified if it can be shown that its application is a proportionate way of achieving a legitimate aim.

Discrimination arising from disability

This occurs when a disabled person is treated unfavourably because of something connected with their disability and this unfavourable treatment cannot be justified. For example, you exclude a person with a mobility impairment from your premises because they use a wheelchair.

You can justify this unfavourable treatment if you can show that it is intended to meet a legitimate objective in a fair, balanced and reasonable way.

This type of discrimination cannot occur if you do not know, or could not reasonably be expected to know, that the person is disabled.

Harassment

This can occur when a service provider engages in unwanted conduct which is related to a relevant protected characteristic and which has the purpose or the effect of:

• violating the customer’s dignity
• creating an intimidating, hostile, degrading, humiliating or offensive environment

Harassment because of a person’s pregnancy and maternity, religion and belief or sexual orientation are not protected directly under the harassment provisions but pregnancy and maternity harassment would amount to harassment related to sex. Also, where unwanted conduct related to sexual orientation or religion or belief results in a person suffering a detriment, that person could bring a claim of direct discrimination.

Victimisation

This occurs when a service provider treats a person badly because they have made or supported a complaint about discrimination or harassment, or because the service provider thinks that a person is doing or may do these things.

A person is not protected from victimisation if they have maliciously made or supported an untrue complaint.

Reasonable adjustments

You are required to make changes, where needed, to improve service for disabled customers or potential customers. Reasonable changes are required wherever disabled customers or potential customers would otherwise be at a substantial disadvantage compared with non-disabled people. Service providers cannot charge disabled customers for reasonable adjustments.

Breastfeeding mothers

The law makes it clear that you must not discriminate against women outside work just because they are breastfeeding, regardless of the age of the child.

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Customers and data protection

All businesses that hold the details of customers, potential customers, suppliers, staff or any other business contacts are required to comply with the Data Protection Act. The Act applies to any records held electronically – for example on computer – or manually such as in a paper file.

You may be required to register with the Information Commissioner.

You can register with the Information Commissioner on the Information Commissioner’s Office (ICO) website- Opens in a new window or by calling the ICO Helpline on Tel 0303 123 1113.

The Data Protection Act requires businesses to comply with a number of principles. These include:

• information must only be used for specified and lawful purposes
• businesses should only hold on to information they actually need
• information that is no longer required should be deleted or destroyed as soon as possible
• the information must be accurate and up to date
• the information must be held securely
• businesses must observe the subject’s rights

You can read information on the principles of the Data Protection Act on the ICO website- Opens in a new window.

For further information on the implications of the Data Protection Act, read our guide on privacy and data protection in marketing.

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Getting paid on time

Late payment of bills can be frustrating and can cause serious cashflow problems for businesses of any size.

The law aims to discourage late payment by allowing businesses to charge each other interest on overdue invoices under the Late Payment of Commercial Debts (Interest) Act 1998.

Unless your terms and conditions state otherwise, an invoice becomes due within 30 days of the invoice date. If it is not paid within this time you are entitled to charge interest.

It is not compulsory to charge interest but if you do it should be calculated at the Bank of England base rate plus 8 per cent. You can find the current base rate on the Bank of England website- Opens in a new window.

The law also allows you to claim compensation for late payment at the following rates:

• £40 for debts up to £999
• £70 for debts between £1,000 and £9,999.99
• £100 for debts more than £10,000

Some firms choose not to charge interest because they are concerned it may alienate important customers. Developing strong credit management procedures can help avoid this conflict of interests.

And remember – your purchase invoices may also attract interest if you fail to pay them on time.

Download the user’s guide to late payment legislation [opens in a new window].

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Rules for businesses that don’t sell to customers face to face

If you sell to consumers – as opposed to other traders – without seeing them face-to-face, there are additional distance selling rules that you must stick to.

When communicating with your customers, you must clearly inform them about:

• your business name
• its place of registration, registered number and registered office address
• your postal address (when advance payment is required)
• the goods or services (including a description)
• prices (including taxes)
• payment arrangements
• arrangements for delivery for goods or performance in the case of services
• the right to cancel during the ‘cooling-off’ period
• who is responsible for postage/delivery of returned goods
• how long prices are valid
• minimum duration of contracts

Once an order has been placed you must send confirmation to the customer by post, email or fax. You must also make it clear if you intend to substitute unavailable goods with similar items.

You must provide key information, such as pricing and the right to cancel, before the order is placed. You must also confirm all the required information in writing, at the latest when the goods are delivered or before the service you are providing comes to an end.

The customer can cancel the agreement up to seven days after the goods are delivered or the service contract is agreed. Special rules apply if the written information has not been provided, or if the customer agrees to the service starting before this cooling-off period is over.

Delivery of the goods or the beginning of the performance of a service must be within 30 days from the day after the consumer sent the order to you, unless otherwise agreed. The customer must be informed if you are unable to meet this deadline – they are not obliged to agree to a revised date and can cancel the contract. Any money paid must be refunded within 30 days of cancellation of the contract.

Customers who enter contracts lasting more than a year must be given details of how the agreement can be terminated.

See our guide on distance selling and online trading.

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Special rules for businesses that sell to customers in their home or workplace

Since 1 October 2008, consumers have had the same rights to a cooling-off period for sales resulting from a solicited call by a trader as they do for sales resulting from an unsolicited visit by a trader to a consumer’s home, workplace or at a location arranged by the trader away from their business premises. This means that consumers who agree to purchase goods or services with a total payment value of more than £35 can cancel any agreement within a seven day cooling-off period. Businesses that have not yet done so should review their contracts and sales practices and make necessary adjustments.

Check your responsibilities to consumers when they buy products or services from you in their home or workplace on the Department for Business, Innovation & Skills (BIS) website- Opens in a new window.

If you sell goods to consumers online – via the internet, email, digital TV or mobile-phone text messages – you must comply with the distance selling regulations. See the page in this guide on rules for businesses that don’t sell to consumers face to face.

Similar requirements apply if you sell goods online to businesses. However, business customers do not have an automatic right to cancel.

Whether you are selling to consumers or businesses, you must provide customers with additional information, including:

• your VAT number (if applicable)
• details of membership of any professional organisations
• an opportunity to correct orders before they are completed

Information on how to place an order, and how to correct errors made while placing it, must be provided before the order is made. You must also acknowledge orders promptly.

Most other information can be made available on your website. Find information on the electronic commerce regulations on the BIS website- Opens in a new window. 

See our guide on distance selling and online trading.

There are also special rules concerning marketing by email that you need to be aware of. You can find out more about these in our guide on email marketing.

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Special rules for businesses that sell electronic and electrical goods

The Waste Electrical and Electronic Equipment (WEEE) Regulations 2006 place responsibilities on users, producers and distributors of electrical and electronic equipment. Under the WEEE regulations you are a distributor if you sell electrical and electronic equipment to consumers.

You’ll need to comply with the WEEE Regulations if you sell:

• household appliances
• IT, telecommunications or audio-visual equipment
• lighting equipment
• electrical and electronic tools
• electronic and battery-operated toys

This list is not exhaustive. For further information, see the page on equipment covered by the WEEE Regulations in our guide on waste electrical and electronic equipment (WEEE).

To fulfil your obligations under the WEEE Regulations you must:

• provide information to consumers on the environmental impacts of electrical and electronic equipment and the reasons for separating WEEE from other waste
• explain the meaning of the crossed-out wheeled bin symbol
• explain how consumers can safely dispose of WEEE free of charge
• display information on the benefits of take-back schemes
• establish an in-store take-back scheme or join the distributor take-back scheme to enable consumers to dispose of their WEEE

You must keep records of this information for four years.

If you decide to set up an in-store take-back scheme, you are required to take back the old item from your customer when you sell them an equivalent new item. You must keep records of the amounts and category of items that you receive and keep these records for four years. You must then arrange the removal of the WEEE you collect through a licensed waste carrier or producer compliance scheme.

Alternatively you can join the distributor take-back scheme. This scheme works through a network of centres where consumers can dispose of their WEEE free of charge. You must inform customers about how and where they can do this.

See the page on obligations of electrical and electronic equipment distributors in our guide on waste electrical and electronic equipment (WEEE).

The distributor take-back scheme is operated by Valpak Retail WEEE Services.

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The Proof of Age Standards Scheme

The Proof of Age Standards Scheme (PASS) is the UK’s national scheme for proof-of-age cards.

PASS brings in a common standard and accreditation process to help protect you and your employees when making age-related sales.

The PASS hologram indicates that the card issuer has passed the rigorous Trading Standards audit process and that you can rely on the card’s authenticity.

How PASS makes life easier for retailers

If you are a retailer, PASS has several important benefits for you and your employees. It can help to:

• protect your business from receiving fines for selling age-restricted goods
• protect you from the loss of your premises licence
• clarify which cards are genuine
• give a single recognisable logo you can trust – the PASS hologram is a registered trademark, which means that to forge the hologram is a criminal offence
• make it easier to check the identity of the carrier against the photo and date of birth on the card with the PASS hologram

Almost two million young people hold proof-of-age cards bearing the PASS hologram, and numbers are increasing all the time.

The following cards are all part of PASS and are available nationally:

• CitizenCard
• VALIDATE UK
• Young Scot
• Proof GB

There are a number of local schemes which produce PASS-accredited cards. Find a list of local and national schemes issuing PASS-accredited cards on the PASS website- Opens in a new window.