General Principles in Consumer Law
A. Buyer’s (Consumer’s) Rights and Responsibilities
In a sale of goods, the buyer has certain rights and responsibilities. To determine what those rights and responsibilities are, courts should first determine whether a valid contract has been formed between the consumer and the seller of goods. (See Contracts Tutorial – What is a Contract?) If a valid contract exists, then the buyer has certain rights and duties in the transaction. Whether the buyer has any additional rights depends on what statutes and regulations apply to the transaction.
The buyer clearly has the right to accept the goods in question. Acceptance of goods occurs when the buyer:
- after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity; or
- fails to make an effective rejection but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or
- does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him. Acceptance of a part of any commercial unit is acceptance of that entire unit. §55-2-606.
If the goods purchased do not conform to the seller’s description or the timing of delivery does not conform to the terms of the contract, then the buyer has the right to reject the goods from the onset or revoke initial acceptance of the goods.
1. Rejection: If the goods or the time of delivery do not conform to the description given, or promises made, by the seller, then the buyer has the right to reject the goods within a reasonable time after their delivery. Once the buyer has had the opportunity to inspect the goods and has not rejected them, then he or she is considered to have legally accepted them. To reject effectively, the buyer must notify the seller and specify the defect. §55-2-602 (Manner and effect of rightful rejection).
Buyer’s Responsibilities in Rejecting Goods:
- The buyer must not exercise ownership over the goods after rejection or revocation, except to retain them for safekeeping;
- The buyer must care for the goods long enough for the seller to reclaim them; and
- The buyer must bring the lawsuit within four years of the breach of contract, regardless of whether the buyer knew of the breach.
2. Revocation of Acceptance: Even if a buyer has not effectively rejected goods upon initial receipt of them, the buyer may still have the right to later revoke acceptance of defective goods if:
- The buyer reasonably assumed that that seller was going to remedy the defect, but the seller failed to do so; or
- The buyer failed to discover the defect because the defect was difficult to discover or because of the seller’s assurances that the defect would be corrected. §55-2-608 (Revocation or acceptance in whole or in part).
A buyer may only revoke acceptance for a nonconformity that substantially impairs the value of the purchase. This is a stricter standard than that for rejection, which can be for any nonconformity. In order to revoke acceptance, the buyer must notify the seller of his or her intention to revoke within a reasonable time after the buyer discovered the ground for revocation.
3. Recovery of Damages: The buyer may collect damages for the breach of contract. Damages are calculated by:
- The difference between the market price and the contract price; or
- Any reasonable method for calculating damages. §55-2-713 (Buyer's damages for nondelivery or repudiation).
B. Seller’s Rights and Responsibilities
The seller is responsible for providing goods that conform to the consumer’s reasonable expectations of those goods, meaning that the product should conform to the seller’s representations of that product in advertising and during the transaction between consumer and seller. The seller has the right to timely payment for the goods purchased.
Right to Cure: The seller has the right to avoid a buyer’s rejection by acting to fix the problem with the goods. The seller must give the buyer notice of the intent to remedy the defect and must remedy the goods within the time period originally contracted for delivery. §55-2-508 (Cure by seller of improper tender or delivery; replacement)