Legal Rights of Buyers and Sellers - Case Study Example

LEGAL RIGHTS OF BUYERS AND SELLERS Laws are used to protect the rights of people. In business field many disputes arisedue to disagreements between buyer and seller. Disputes may vary from one consumer to another and one seller to another. Most of the times the disputes are based on infringement of laws by one or the both parties. Regarding the maintenance of the product, supplying the product after the deadline, bad quality of the product, service not up to the mark, etc. constitutes some of the problems between a consumer and a seller. To solve the disputes government of UK introduced many laws and legal rights were provided to both consumers and sellers. In Office of Fair Trading's (OFT) website any person can see the consumer rights forum and can use for his rightful purpose. This paper presents about the rights that are applicable to a consumer and a seller. If both parties are in dispute regarding the product they can approach OFT or court. After making an enquiry court will rule in favour of the party that follows the rules and regulations. Lets look at the present case. Bigbeef Ltd is in the business of butchery trade as a wholesale supplier of fresh meat. While supplying the products they give customers a detailed description of the standard terms and conditions of trading which has to be strictly followed. It includes a clause. According to this clause until buyer pays the amount in full the ownership of the goods supplied will remain with the seller, which in this case is Bigbeef Ltd. If the buyer hasn't paid in full or paid some amount then the seller has every right to take action by recovering and selling the goods and may enter buyer's premises for that purpose. Afterwards legal action would be taken against the buyer to recover the dues. Before the payment of the dues if the buyer alters the supplied goods in any way then the seller has the whole property rights on those altered and processed goods until such payments has been made and seller' s would be extended to those altered or processed goods. Until the buyer pays the amount in full for the goods relationship between them would be money related in respect of the goods. Bigbeef Ltd supplied 100 sides of fresh British beef to Frosty Ltd that is a frozen meat distributor and a regular customer. Frosty Ltd hasn't paid any amount regarding the supply of the British beef. Of the 100 sides 75 were cut into joints, packaged and frozen ready for resale. Because of the stringent government laws and regulations regarding labelling of beef the original supplier of the goods can be easily traced. Frosty Ltd sold the remaining 25 sides to a local super market that were supplied by Bigbeef Ltd to Frosty Ltd. Frosty Ltd made no profits from this trade to local super market. The above is the scenario in which one party supplies goods to the second party without receiving any payment. The second party sells a part of the supplies to the third party without making any profits. Due to UK's strict laws with respect to labelling of the goods the second party cannot sell the goods supplied by first party without prior permission from them or until full payment is made. The General Consumer council for Northern Ireland (The Consumer Council) is a statutory body, whose aim is to promote the interests of all consumers. The Consumer Council campaigns on behalf of consumers for the best possible standards of service and protection, undertakes research and gives advice and information and issues publications. The Consumer Council also manages consumer line that gives advice and information to consumers on: Practical help on how you can deal with your problem. Sources of additional help. Advice on using Small Claims Court. Your legal rights as a consumer. The Council has an Environmental Health Department (EHD) employing Environmental Health Officers (EHO). The EHO try to make sure that the Council's area is a healthy place for you to live, work and play. The law makes it a criminal offence to sell consumer goods which are unsafe, or food which is unfit for you to eat or which would be harmful to your health. There are also laws on how food is labeled and the cleanliness of places where food is sold. If you buy an item like a toy, which is unsafe or buy food that is of poor quality, you should contact the local EHD. To solve the legal disputes both the buyer and seller can approach Small Claims Court or report to OFT. The Small Claims Court is a low cost, quick and informal way of settling disputes. The system was set up here in 1979 and allows anyone to have a claim of up to 2,000 decided by a judge. You can use the Small Claims Court to claim for any faulty goods, poor service or credit agreement. You cannot use it for things like personal injury or for damage caused by a road accident. All you have to do is complete a one-page form, pay a fee (the amount is set by the size of the claim) and appear for a short time at an informal court hearing. You do not need to be represented by a lawyer/solicitor. The Office of Fair Trading (OFT) is responsible for making markets work well for consumers. They achieve this by promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. There are over twenty different laws which lay down the duties and powers of the OFT. These include issuing licences to credit companies or moneylenders, dealing with problem traders and stopping the use of an unfair term in a standard contract. You have no real grounds for a complaint if you: Were told about the fault before you purchased the item. Examined the item when you bought it and should have seen the fault. Made a mistake when purchasing the item. Simply changed your mind about the item. The Consumer Credit Act regulates the way that credit is offered to consumers. People who offer credit facilities must be licensed by the Office of Fair Trading and must prove they are fit to have a licence. It is a criminal offence to operate without a licence. This legislation notes that: 1. You should receive at least one copy of any credit agreement you sign. Credit agreements should include the following information: - the cash price, the number and amount of repayments, the Annual Percentage Rate (APR) and, in most cases, the total amount payable. 2. You can cancel some credit agreements - your cancellation rights depend on the circumstances under which you signed the agreement. You have no cancellation rights if you signed the agreement on the trader's premises. You have a right to cancel if you met the trader face to face to discuss the deal and you sign the agreement away from the trader's premises, e.g. in your home. If an agreement is cancellable it should say so on the agreement itself and tell you what you have to do to cancel the agreement. In the case of Bigbeef Ltd, Frosty Ltd has clearly breached the contract terms and conditions. According to the contract until and unless full payment is done the ownership of the good will remain with the seller. Of the supplied 100 sides of the British beef Frosty Ltd kept 75 of them in frozen state and sold remaining 25 to a local super market. Bigbeef Ltd can recover the amount either by reselling the supplied beef or approach Small Claims Court to take legal actions. Most probably the verdict goes in favour of Bigbeef Ltd. Since Frosty Ltd breached the contract by selling the good to the third party without paying the full amount of the goods supplied by Bigbeef Ltd. Frosty Ltd can avoid actions if full payment is done. If they are short of amount they can sell those goods with prior permission from Bigbeef Ltd and repay them from the amount acquired. Reference Crown. (2003). Labelling. Retrieved December 18, 2005, from Food Standard Agency (FSA): http://www.food.gov.uk/foodindustry/guidancenotes/labelregsguidance/foodlabelregsguid --> Citizens Advice. (2005). What If The Supplier Goes Out Of Business. Retrieved December 18, 2005, from The National Association of Citizens Advice Bureaux: http://www.euroconsumer.org.uk/index/using_your_rights/supplier_goes_bust.htm --> Crown. (2005). Directgov. Retrieved December 18, 2005, from : http://www.direct.gov.uk/RightsAndResponsibilities/RightsAndResponsibilitiesArticles/fs/enCONTENT_ID=10015892&chk=I8hfA1 --> . (2005). Your rights when shopping - buying goods. Retrieved December 18, 2005, from : http://www.oft.gov.uk/Consumer/Your+Rights+When+Shopping/your+rights+buying+goods.htm Read More