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The Impact of Supply Chain Delays on Consumer Contracts

Sometimes with the best will in the world we are prevented from delivering on our promises due to circumstances that are seemingly outside of our control.

The question we are often asked at the Ombudsman is: how are such matters dealt with in consumer contracts?

There are many examples that are often cited as events outside of a trader’s control, where it could be argued the impact could be mitigated by using reasonable care and skill. For example, it is not unforeseeable that deliveries scheduled in winter months may be subject to delays if roads become impassible due to weather conditions. Delays in the supply chain can also impact negatively upon the end user of goods and services and this is something that our members are facing into at the moment, in the current climate which has impacted both manufacture and importing of consumer goods.

Customer Service processes and clear, timely messaging can and should be in place to mitigate the impact of this, however in circumstances where delay becomes unreasonable, providing the consumer with the option to walk away, may not only be advisable, but also in line with their legal entitlement.

It is worth bearing in mind that although the delays may be caused by events out of the trader’s control, they are not the consumer’s fault either.

Remember, under the Consumer Rights Act 2015, delivery has to take place within 30 days of the date of purchase, unless agreed otherwise. Terms and conditions should provide clear information as to when deliveries could be expected to arrive in the normal course of events and also how exceptions will be dealt with.

Further, if goods are not delivered on time and that time was deemed essential to a consumer, the consumer can walk away. The consumer can also give a further opportunity to deliver within an “essential time” and then cancel at a later date if the goods are still not delivered. Whilst a consumer may choose to cancel some or all of the goods, for example if one missing item is contributing to an overall delay, it is clear that they could choose to cancel the whole order.

Legalities aside, clear messaging provides a customer service solution to these events and the Ombudsman has several top tips for communicating with consumers:

  • Prepare before you communicate: know what this issue is, how it was caused and what action is required to deal with it.
  • Don’t make excuses, take ownership: explain the situation and let the consumer know what you can do to help alleviate it.
  • Keep the consumer informed: let the consumer know as soon as you are able and give regular updates so that they don’t have to chase you. It may also be worth building in information about any potential delays into the sales process to the extent they are known at the time, in order to ensure the consumer can make an informed choice.
  • Don’t make promises you can’t keep; Do keep promises you have made: avoid promising an outcome you can’t control, but given a realistic timescale for your next update and stick to it.
  • Give options, where possible: If you can give the consumer some alternatives to consider, you will empower them and put the consumer back in control.

What if the contract cannot go ahead at all due to the Lockdown Laws?

In the presently uncertain landscape, a retailer may be unable to meet its obligations due to circumstances that are outside of their control. The Competition and Markets Authority (CMA) has provided some guidance on the application of the legal principle of “frustration” to contracts that are prevented from going ahead as agreed, or at all, due to lockdown laws. This sets out the CMA’s expectation that the consumer will be entitled to a full refund, without necessarily having to ask for it, including any deposit that they have paid. Retailers should not ask the consumer to take “unreasonable or unnecessary steps” to obtain the refund and will be in breach of consumer protection law if they do so. That said, there is nothing to prevent a consumer and retailer coming to an arrangement that is suitable to both of them and this can be one advantage of alternative dispute resolution at this time.

Members of The Furniture & Home Improvement Ombudsman can contact us for advice on the individual circumstances of a complaint. We can help a business understand when is ‘too long’ for a consumer to wait and investigate what practical and legal options are available for the parties.

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