Stuart Farr’s ‘fly on the wall’ observations of goods and services

When it comes to trade deals, Stuart Farr says that sometimes it’s difficult to work out what the fuss is all about.

Do we need them? If so, why? I confess the constant reference to them makes me wonder where some people’s motives actually lie. Is the need for them really about our national interest or is it all about creating barriers? Have they been used as a ruse to slow things down or even stop us altogether?

Discussions in many arenas have been rife with the talk of such trade deals and the pundits and politicians claim we must have the freedom to trade elsewhere – if we so wish. These deals, it is claimed, apparently offer significant fiscal advantages. Forgive me, but advantages for whom? The nation? Consumers? Traders?

My hesitation surrounding trade deals is based on the government’s own published statistics which tell us that, in 2017, it was the service industries which accounted for 79 per cent of total UK economic output (Gross Value Added). The service industries also accounted for 83 per cent of workforce jobs in the first quarter of 2018.

On any analysis, that’s a staggering figure. That leaves around a fifth of our output which is based on goods alone. 7.5 per cent of our GDP is exported to the EU with the rest either going elsewhere in the world or being absorbed within our national economy.

Admittedly, that still leaves an EU export figure in the billions – but let’s face it, we are not exactly the manufacturing powerhouse we once were. It left me pondering whether the seemingly universal drive for trade deals has gotten out of hand.

“So what?” you might be thinking. “We’ve been chucking product out of the door all over the Christmas period; all the refunds and exchanges have been settled; the January sales rack has been cleared and folded away; and we are now looking to flog even more shooting gear at the fairs.”

Yes, but have you given any thought as to what proportion of your efforts comprises a service rather than just selling goods? The 79 per cent quoted above has to come from somewhere doesn’t it? It is a fair bet that too few will be able to distinguish easily between that which has been sold as “goods” and that which has been provided as a “service”. The difference is important, because the law treats them quite differently. It’s easy to become confused too, and I’ll illustrate why.

Recently, my wife and I took a weekend morning trip to a local garden centre to partake of a decent breakfast in readiness for a busy day ahead. It was table service so I ordered my nine-item gut-buster breakfast (with all the trimmings) and we sat down to enjoy our hot beverages while the staff embarked on the cooking. After half an hour, with no sign of food, I was down to the dregs of my brew and getting ready to saw off and consume my own arm.

I was just composing myself to deliver a ‘gentle nudge, corrective action notice’ when the table attendant (I believe one cannot say “waitress” anymore) came toward us with two plates and with a flourish began the process of landing one of the plates in front of me. However, touchdown did not occur. Even before the landing gear on the plate was fully down I spotted it right away: A dead fly, cooked into the middle of my egg.

I raised my gnawed arm and followed the dead insect with a pointed finger while the plate was still on in descent; “What the bloody hell is that?” I exclaimed. Touchdown was immediately aborted and my plate soared once more into the air and was swept away with an “Oh dear, that’s not good!” mumble from the attendant.

So the question is where, in (non-food) legal terms, does my complaint lie?  The obvious answer is that the egg was the ‘good’ that was not of satisfactory quality. As it more closely resembled a Bush Tucker Trial, it was not exactly fit for human consumption and I was therefore entitled to reject it.

But what about the service? The attendant had walked a good 20 feet from the kitchen carrying a dead blue bottle spread-eagled across my egg. What does that say about the quality of the service I was provided – the cost of which was no doubt wrapped up in the hefty price of my breakfast? Could I have addressed my subsequent complaint in a different way perhaps?

Was the service inadequate because of the failure of the staff to plate up my breakfast and deliver it to me in a decent and fly-free fashion?

A ‘service’ is simply defined as a duty or labour rendered by one person to another. With such simplicity it is easy to see how services can become a part and parcel of a wider sales process. Bespoke fitting, warranty work, long term maintenance and deliveries are just a few examples of where a service might be supplied. Indeed, after-sales work has become an important element of many traders’ profit.

The Consumer Rights Act 2015 (at Section 49) implies a contractual term into every consumer contract where a service is supplied that the trader must perform the service with reasonable care and skill. One might expect this to be an outcome based standard. In other words, the test as to whether a service has been properly supplied will be primarily judged by the end result.

After-sales work, like checking for bugs, has become an important part of a trader’s profit

However, perhaps surprisingly, that is not the case. The focus remains on the way a service has been carried out – which I suppose could give rise to some odd consequences. So, for example, provided the proper degree of care is taken to measure it is of lesser consequence whether the gun ultimately fits the customer or not. Where service is concerned it is all in the effort and not necessarily the end result? That can’t be right, can it?

There is also no definition of ‘reasonable care and skill’. The reason for this is to allow the standard to be flexible between sectors and industries; permit the courts to take into account existing case law on the meaning of this term and develop its meaning further through new case law; and allow for the taking into account of industry standards or codes of practice and the price paid for the service.

Under Section 50 of the CRA every contract to supply a service is to be treated as including anything said or written to the consumer, by or on behalf of the trader, about the trader or the service. This is the case if either (a) it is taken into account by the consumer when deciding to enter into the contract and/or (b) it is taken into account by the consumer when making any decision about the service after entering into the contract.

In essence, if any information is provided voluntarily about the service, it effectively becomes part of the contract for the supply of that service. This is an area where advertising material for services and conversations with customers need to be couched in careful terms as to what is going to be supplied, how and when. The customer is entitled to rely on this information and is entitled to quote it back at the trader if he/she feels those obligations have not been met.

The final two important elements under the CRA require services to be provided within a ‘reasonable’ time (again, not defined by the CRA) while the consumer is obliged, in the absence of a specific agreement on the price, to pay a reasonable amount for the service which has been provided.

In my experience, this is the most fertile area for disagreement and often occurs where traders become ‘carried away’ by their work without first carefully managing their customer’s expectations as to what the service will cost. Easily done, I accept. Not as easy to avoid because it is not in the nature of many good people to complain or raise the dirty word “money”. That must be the fly in the ointment instead, I suppose?

Stuart is a solicitor and partner at Knights plc. He has been a shooting enthusiast for over 30 years and welcomes contact from trade members: stuart.farr@knightsplc.com

 

 

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