Consumer Contracts - But it's a B2B Sale
Discussion
I thought I would run this one by you clever guys, but I'm sure I know the answer.
We sell high value products, online and by telephone orders, that could equally be used at home as well as in a business. Recently a customer asked us to invoice his vat registered limited company (about £4.5K) but to deliver the goods to his home address. We have to presume that his business has a need for these goods to be used at his home address. I'm sure they wouldn't be solely for his personal use.
However, he is complaining about a couple of niggling quality issues. To most people these would be non-issues and we have already proposed that we replace the component involved, which he won't accept. We have tried to help.
He is now apparently going to write asking for collection and refund under the Consumer Contracts Regulations. I don't think he's twigged yet that this is was a B2B sale and that the Consumer Contracts Regulations don't apply. By purchasing through his business and then hoping to benefit from consumer protection he expects to have his cake and eat it in my view. I am looking forward to receiving his email and writing a reply.
We have separate B2C and B2B terms.
The above might be in the "cool story bro" category, but do you have any thoughts and comments please?
We sell high value products, online and by telephone orders, that could equally be used at home as well as in a business. Recently a customer asked us to invoice his vat registered limited company (about £4.5K) but to deliver the goods to his home address. We have to presume that his business has a need for these goods to be used at his home address. I'm sure they wouldn't be solely for his personal use.
However, he is complaining about a couple of niggling quality issues. To most people these would be non-issues and we have already proposed that we replace the component involved, which he won't accept. We have tried to help.
He is now apparently going to write asking for collection and refund under the Consumer Contracts Regulations. I don't think he's twigged yet that this is was a B2B sale and that the Consumer Contracts Regulations don't apply. By purchasing through his business and then hoping to benefit from consumer protection he expects to have his cake and eat it in my view. I am looking forward to receiving his email and writing a reply.
We have separate B2C and B2B terms.
The above might be in the "cool story bro" category, but do you have any thoughts and comments please?
Was it made clear that this transaction was B2B? Where is this communicated to the customer?
Whilst he has the correct expectation that as a business customer the products should be fit for purpose, consumer contract regs do not apply for B2B. It really depends on how the transaction was conveyed.
I would write to explain the situation regarding B2B, and reiterate that any issues will be resolved to ensure the goods perform as expected.
The only issue maybe is that you also trade B2C. Unless you can demonstrate it was a trade sale it may get difficult.
Whilst he has the correct expectation that as a business customer the products should be fit for purpose, consumer contract regs do not apply for B2B. It really depends on how the transaction was conveyed.
I would write to explain the situation regarding B2B, and reiterate that any issues will be resolved to ensure the goods perform as expected.
The only issue maybe is that you also trade B2C. Unless you can demonstrate it was a trade sale it may get difficult.
Ussrcossack said:
And benefit of claiming the tax whilst using at home
But that is impossible to know.I often get goods delivered to my house, that are used in my business. Either used at home (for business purposes), or for ease of delivery.
No assumptions can be proven by a delivery address.
Law says
“consumer” means an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession;
Therefore in some cases you can be a consumer if using the goods wholly or mainly for non business purposes (but not exclusively) even if you nought them as a business (say a sole trader)
However as the Ltd company is a separate entity and not an 'individual' then he is not included I would say
In consumer law a Ltd company is usually referred to as a person as per the definition of trader in the same law
“trader” means a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf.
That said, he may still have rights under the terms of contract if items don't do what they are supposed to.
“consumer” means an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession;
Therefore in some cases you can be a consumer if using the goods wholly or mainly for non business purposes (but not exclusively) even if you nought them as a business (say a sole trader)
However as the Ltd company is a separate entity and not an 'individual' then he is not included I would say
In consumer law a Ltd company is usually referred to as a person as per the definition of trader in the same law
“trader” means a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf.
That said, he may still have rights under the terms of contract if items don't do what they are supposed to.
Ham_and_Jam said:
Ussrcossack said:
And benefit of claiming the tax whilst using at home
But that is impossible to know.I often get goods delivered to my house, that are used in my business. Either used at home (for business purposes), or for ease of delivery.
No assumptions can be proven by a delivery address.
Doofus said:
Ham_and_Jam said:
Ussrcossack said:
And benefit of claiming the tax whilst using at home
But that is impossible to know.I often get goods delivered to my house, that are used in my business. Either used at home (for business purposes), or for ease of delivery.
No assumptions can be proven by a delivery address.
To be fair to the op he has to be fair
RegMolehusband said:
Thanks for the replies. It's getting slightly more confusing as despite being asked to invoice his limited company it looks like he paid on a personal credit card rather than a corporate card. I was hoping the company might have paid for it.
They might have done - the company might have reimbursed him. The method of payment is irrelevant for you. The key thing is that you believe you sold to a limited company, because that's what he asked you to do.Sheepshanks said:
Sheepshanks said:
It doesn't matter much anyway what you do - it's not like he can dial 999 and have you arrested.
What he might do is try and make a chargeback on the card. No idea what happens then.
And while the CCA doesn't apply, I believe Sale of Goods Act still does.
What he might do is try and make a chargeback on the card. No idea what happens then.
And while the CCA doesn't apply, I believe Sale of Goods Act still does.
I may organise it yet in January, but he is being very unreasonable in relation to the product quality and he has irked my to some extent. A past F1 team manager has some of this product from us (a big name who understands quality) and he certainly doesn't regard it as "not fit for purpose".
Also, it's galling that, it seems, he wants to reclaim the VAT by asking us to invoice the company and then expects consumer protection from the government.
Also, it's galling that, it seems, he wants to reclaim the VAT by asking us to invoice the company and then expects consumer protection from the government.
I bought some electronics from Richer Sounds for my business some years ago. I out my limited company name in the name field so it was on invoice and I could claim VAT back etc. They advertised a 5 year warranty, but we're very quick to inform me that as a business purchase it would be on B2B terms and only eligible for 6 months warranty. Might be worth doing this in future for any business customers.
I don't think the payment method makes any difference. If it's invoiced to a business it's a B2B sale. What do your T&C's say?
I'm not a lawyer but I don't think consumer protection would apply. Weather it's worth pursuing is another matter. Probably easier to accept the return, and make sure you are very clear for future orders.
Another option could be to ask if he's happy for you to forward details of the transaction to HMRC to get their opinion. He may well go quiet after that if it's not a legitimate business expense.
I don't think the payment method makes any difference. If it's invoiced to a business it's a B2B sale. What do your T&C's say?
I'm not a lawyer but I don't think consumer protection would apply. Weather it's worth pursuing is another matter. Probably easier to accept the return, and make sure you are very clear for future orders.
Another option could be to ask if he's happy for you to forward details of the transaction to HMRC to get their opinion. He may well go quiet after that if it's not a legitimate business expense.
Mojooo said:
What matters is who the parties to the contract are.
The Ltd company is not a consumer.
What if the purchaser is a consumer but a company has agreed to make the purchase? Does the consumer lose their rights because the name on the credit card is the name of a business?The Ltd company is not a consumer.
Whether the purchase is to the benefit of a consumer or business is surely a matter of fact?
If I win a sales bonus and the company agrees to let me use the company card to buy a big telly for my personal use, does that mean I lose my consumer protection?
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