The Consumer Contract

You won't find the Law of Contract written down in any Act of Parliament. It's a set of rules developed over the centuries, but don't be put off because you think that it's too ancient to have anything to offer you. You probably enter into several contracts every day without even realising it. Each time you catch a bus or buy a magazine or a packet of sweets or visit the cinema you are making a contract. It means that both you and the other person involved have important rights. As a consumer you're entitled to receive the goods or services you asked for and you rightly expect them to be in a reasonable condition and safe to use.

What is a contract?

Many people mistakenly believe that you can only have a legally binding contract if you have all the details written down and have signed the piece of paper. This isn't true. When you step on a train you're making a contract (provided you paid for your ticket), but the driver doesn't sign a form agreeing to take you where you want to go, nor do you insist that your hairdresser draws up an agreement before touching your head.
A contract is a deal between two people where each one agrees to do something for the other. Often it involves paying money in exchange for goods or services - just as you buy a ticket from British Rail in exchange for carrying you on the train or you hand money to a newsagent in exchange for a magazine. You and the other person are getting some benefit from the arrangement and each has a responsibility to the other.

When is a contract made?

Usually at the time that the deal is struck. You see a CD that you want in a shop window but because it is out of stock you ask the shop to order a copy for you. The shop agrees - and there's your contract. You haven't signed anything and you may not have handed any money over but you've agreed that you will once your disc arrives. That's enough to make your contract legally binding.
The exact moment that a contract is made can be very important because if there are any special terms or conditions attached to it (such as "Yes, we'll order the CD but you'll have to pay postage or delivery charges) then you must be told about them at or before the time the contract is made. Otherwise they don't form part of your contract and you can't be forced into accepting them.

Written Contracts

You can challenge any written contract term and conditions that you think are unfair. The Director General of Fair Trading looks into complaints about the "small print" that you'll often find in traders written agreements.

What does a contract involve?

Until the other person has accepted an offer, there is no contract. Both the offer and the acceptance must be made in the same terms with both sides clear about what they're agreeing to. Suppose you had said, "I want to buy a CD that you've got in your window" and the shop had said, "We've just sold the last one we had on special promotional offer. We can get you another copy but it'll be the full price". Here the seller isn't accepting your offer. He's making what the law calls a counter-offer and asking you whether you still want to go ahead knowing that the price will increase. At this point you're free to back out of the deal by rejecting his counter-offer. If you accept then you're agreeing to pay the higher price.
'Consideration is not an essential contract ingredient in Scotland. A gratuitous contract is binding in Scots Law. A person who has accepted an offer which amounts to a gift made to himself by another person is just as entitled to enforce the contract as he would have been if he had made or agreed to make payment to the other party.'

Shop Displays

A shopkeeper by displaying his or her goods in the window or on the shelves isn't making an offer to you in the legal sense. Instead the display is what is called an 'invitation to treat'. It means that the customer, are being invited to make an offer to buy - which the shopkeeper can either accept or reject. In practice, of course, most accept because that's why they're in business, but you can't force a shop to supply you with anything. You can, in theory, only ask if it is prepared to sell to you. If it isn't, there is nothing you can do about it other than take your custom elsewhere. However, if you believe you are being discriminated against because of your race or ethnic origin, or your sex then the shopkeeper is breaking the law. If the shop tries to charge you a higher price than the one marked on the goods, that's a criminal offence.

Why is a contract so important?

Once you have made it, and agreed the terms of your deal, you have a legal obligation or duty to go through with it. Changing your mind can cost you money because if you try to back out of it you risk being sued for breach of contract. This is the legal term for breaking your agreement. If it happens it gives the other person the right to claim compensation from you. Even if you're a minor (under eighteen years old) you can still run the risk of being sued for breach of contract. It depends on whether what you agreed to buy is what the law describes as "necessaries" (things suitable to your particular way of life like clothes, transport, food). It is one good reason why it pays to be careful before you commit yourself to anything.
If the seller breaks the agreement, then you'd be entitled to compensation for any losses suffered. If you'd paid a deposit or made a down payment you could reclaim it. If you'd had to make several journeys to and from the shop - perhaps they'd asked for you to call back later - you might be entitled to your fares.