The computer seller has agreed to erase two crucial limits to
its own liabilities for equipment it sells. Its liability for
negligence will no longer be capped at the price of the product,
and it will remove a term which excluded liability for
consequential loss arising out of breach of contract.
While the move will be seen as a victory for consumer rights,
the demands of the Office of Fair Trading (OFT) in relation to
consumer sales contracts is perceived by some as being potentially
problematic for businesses.
"On the one hand it is laudable to make sure that consumers are
protected, but on the other hand I think they can sometimes go a
little over the top," said Jon Fell, a partner at Pinsent Masons,
the law firm behind OUT-LAW.COM. "Ultimately it is up to a court to
decide what is reasonable, but any guidance issued by the OFT is
something that will be persuasive. I think it is tough on business
but it is not that surprising."
A statement from the OFT said: "The OFT identified a number of
terms that it considered to be inconsistent with the requirements
of the Unfair Terms in Consumer Contracts Regulations 1999 or The
Consumer Protection (Distance Selling) Regulations 2000 and
therefore unsuitable for use in consumer contracts."
"The limited liability [for consequential loss] is a bit harsh,
because it depends what you are going to use the computer for,"
said Fell. "There is an assumption that a consumer is not a
business customer, but if you know that the person is buying it for
small office or home office use regardless of the fact that it was
a consumer purchase are they going to look for more than just their
money back?"
The OFT had once before made recommendations about consumer
computer purchase contracts. It made further recommendations at the
end of last year.
"What is significant here is that the OFT produced its
guidelines in December and they have gone after someone they see as
a big consumer name selling almost exclusively by distance selling,
looking to get them to agree to changes," said Fell. "It shows that
they want to be seen to be taking this seriously."
Christine Wade, director of consumer regulation enforcement for
the OFT, said: "Distance selling, be that by mail, phone or the
internet, does not exclude businesses from ensuring their contracts
are fair to consumers and compatible with the law. I'm pleased that
Dell has worked with the OFT to modify important aspects of its
terms and conditions, such as those relating to time of delivery
and liability for faulty goods, in the light of the OFT's
concerns."
The other two changes made by Dell are less controversial. It
has changed the term which "excluded liability for oral
representations not confirmed in writing" and another that
"required the consumer to notify Dell of any errors in its
confirmation of the consumer's order immediately".
