Trade Advice Document

This guidance is for England, Scotland and Wales

What is hire? Hire is when a trader gives or agrees to give you possession of goods (for example, cars, power tools and special occasion-wear) along with the right to use them, subject to the terms of the hire contract, which will include the length of time the goods are hired out for. The trader remains the owner of the goods and you do not have the right or the option to buy them.

When you hire goods from a trader, you are entering into a contract that is regulated by many laws.

The Consumer Rights Act 2015 gives you rights and remedies when the hired goods fail to meet your expectations and when a hire service provided by a trader is below standard. It also sets out rules to protect you if a trader tries to take away your rights or use unfair terms in a consumer contract or notice.

A contract for the hire of goods is also known as a consumer hire agreement and is regulated by the Consumer Credit Act 1974.

You also have the right to expect that hired goods are safe to use.

This guide sets out key laws that apply to a hire contract and offers an explanation of the rights and remedies you have against a trader when things go wrong. Hire purchase agreements (where you do have the option to buy the goods) are not covered in this guide.

BREXIT

Rules are in place that cover many areas, including how the UK trades with the EU. What does this mean for you? The majority of changes to trade are 'behind the scenes', but there are some changes which you will notice, such as replacing 'EU' with 'UK' and 'GB' (Great Britain) and having the option to use UKCA (UK Conformity Assessed) marking and/or the EU's CE marking on certain goods, as a result of the Government's decision to indefinitely extend the use of CE marking.

CONSUMER RIGHTS ACT 2015

A hire contract is an example of a 'mixed contract' under the Consumer Rights Act 2015; you have rights against a trader if the goods hired to you fail to meet your expectations, possibly because they are faulty or unsafe, and when a hire service provided by a trader is below standard. These are commonly referred to as your 'statutory rights'. You also have remedies against a trader if your rights are not met.

Key rights (hired goods):

a trader must have the 'right to supply' the goods to you. If they do not (for example, if they do not own them) then you have a remedy
the goods must be of 'satisfactory quality'. The description, price, condition of the goods, fitness for purpose, appearance and finish, safety, durability, and freedom from minor defects are all important factors when considering quality. Public statements (such as those in advertising or on labelling) made about the goods by the trader, the producer or their representative must be accurate and can also be taken into account when deciding if they are of satisfactory quality
if you make a trader aware that you want the hired goods to be 'fit for a particular purpose' - even if it is something that they are not usually hired for - then you have the right to expect they are fit for that purpose
you have the right to expect that the goods are 'as described'
if you see or examine a sample, then the goods 'must match the sample'
if you see or examine a model, then the goods must 'match the model' - for example, the model hired to you must be the same as the one you examined and agreed to hire in the store

Key remedies (hired goods):

the right to a refund for the period of hire that you paid for but did not get
right to a repair or replacement

The 'Sale and supply of goods: your consumer rights' guide gives more information on your rights and which remedy you are entitled to.

Key rights (hire service):

the service must be carried out with 'reasonable care and skill'. A trader must carry out the hire service to the same or similar standard to that which is considered acceptable for hirers in general
'information about a trader or service' is legally binding. Anything said or written down by a trader (or someone acting on their behalf) about themselves or the hire service forms part of the contract if you take the information into consideration before you agree the contract or if you make a decision about the hire after the contract is made
'reasonable price' to be paid. You are required to pay only a 'reasonable' price for the hire service unless the price (or the way in which the price is worked out) is fixed as part of the contract. Take note that some hire agreements must be in writing and the price for hire would be included
the service must be carried out within a 'reasonable time', if time is not fixed by the hire contract

Key remedies (hire service):

right to repeat performance. If you are dissatisfied with the hire service, then a trader must perform the service again. This should be carried out within a reasonable time, without significant inconvenience and at no cost to you
right to a price reduction. If repeat performance of the hire service fails to resolve the problem (perhaps it is impossible or it cannot be carried out within a reasonable time or without causing you significant inconvenience) then you are entitled to a price reduction, which can be as much as a full refund

The 'Supply of services: your consumer rights' guide gives more information on your rights and which remedy you are entitled to.

The law on unfair terms, as set out in the Consumer Rights Act 2015, applies to all consumer contracts (contracts between a trader and a consumer), including contracts for the hire of goods, whether they are in writing or not.

It also covers notices if they are 'consumer notices', which means they set out rights or obligations between a consumer and a trader or try to deny or restrict a trader's responsibility to a consumer. The meaning of 'consumer notices' is wide and applies to announcements and any other communications, whether in writing or not, that are intended to be seen or heard by a consumer. You may find this type of notice near the counter in a hire store.

The general rule is that a term or notice is unfair if, contrary to the requirements of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer.

So what does this mean? Basically it means that traders must draft and present their hire contracts and notices to you in a way that is fair and open and that respects your legitimate interests. Terms and notices should be transparent; the wording used should be plain (no legal jargon), capable of being understood and legible. They should not be designed to trick or trap you and any terms that are important (because they may put you at a disadvantage) must be prominent. 'Significant imbalance' means that the rights or obligations contained within the term or notice are significantly weighted in favour of the trader and therefore place a greater burden on you.

Terms that are 'standard' (which means that they are used in all the trader's hire contracts) and terms that are individually negotiated with you as part of your own contract can both be assessed for fairness. However, terms that deal with the main subject matter of the contract and those that set the price are exempt from the assessment of fairness only if they are transparent and prominent.

There are certain 'blacklisted' terms that are automatically unfair in all circumstances; if a trader includes them in a contract or notice they cannot rely on them and cannot enforce them against you. An example of this would be a term that excluded or restricted responsibility for death or personal injury resulting from negligence.

There are certain 'greylisted' terms, which are not automatically unfair but may be considered unfair depending on how they are used - for example, a term that allows a trader to get out of the hire contact at their discretion but does not allow you to do the same.

You are not legally bound by an unfair contract term or consumer notice and you have the right to challenge it, in court if necessary.

The 'Unfair terms in consumer contracts and notices' guide gives more information.

CONSUMER CREDIT ACT 1974

The law defines a consumer hire agreement as an agreement made by a person with an individual for the hiring of goods where the following applies:

the agreement is not a hire purchase agreement
the agreement must last for more than three months

The agreement must be in writing and signed by you and the trader. You must be given a copy of the agreement that contains all the hire terms. Make sure you read all the terms and conditions before you sign.

Short-term hire agreements (less than three months) - for example, hiring a suit for a wedding or a dress for a prom - are not regulated by the Consumer Credit Act 1974 but the trader should still provide you with a written agreement as well as the terms and conditions applicable to the hire. Long-term hire agreements - for example, the hire of a motor vehicle for longer than three months - are agreements regulated by the Consumer Credit Act 1974.

The law gives the hirer a right to terminate the agreement by giving notice to the trader, as long as:

the hire agreement has run for at least 18 months, unless a shorter period is provided for in the agreement
the hirer gives a minimum notice period of either three months or the shortest interval between the due dates under the agreement - for example, if you pay in monthly instalments one month's notice would be acceptable

The right to terminate does not apply where the hire payments are more than £1,500 in any one year.

Visit the Financial Conduct Authority website for more information on consumer hire agreements.

SAFETY OF HIRED GOODS

There are safety regulations that apply to specific products or groups of products. Goods hired out must comply with relevant safety regulations - for example:

ELECTRICAL EQUIPMENT (SAFETY) REGULATIONS 2016

These Regulations apply to electrical equipment, including hired electrical equipment such as power, garden and decorating tools, which must be safe for use. You and anyone else coming into contact with the equipment, including domestic animals, must be adequately protected against physical injury or other harm.

The trader is responsible for ensuring the equipment is 'UKCA' marked, which stands for UK Conformity Assessed, or CE marked, to show that it meets all required safety objectives.

UKCA marking looks like this:

You may be familiar with the EU's CE marking, which looks like this:

You will continue to see CE marked electrical equipment for sale because the Government intends to indefinitely allow manufacturers to use either the UKCA or CE markings (or both) on products placed on the GB market, as long as they conform to all legal requirements.

Electrical equipment must be properly labelled (type, batch or serial number, manufacturer's and any importer's details) and supplied with instructions and safety information. Make sure everything is in order and that the equipment is in good condition before you hire it.

GENERAL PRODUCT SAFETY REGULATIONS 2005

If there is no product-specific safety legislation covering certain goods on hire then the General Product Safety Regulations 2005 will apply. These Regulations place a duty on manufacturers and retailers only to supply products, both new and second-hand, that are safe for you when used in a normal or reasonably foreseeable way. The following are all important factors when deciding if a product is safe:

its characteristics (how it is made, packaging and any instructions for assembly)
the effect it has on other products it is used with
its presentation (labelling, warnings and any instructions for disposal)
the types of consumer using it

You should be given instructions with any item in order to operate it safely; if in doubt seek the advice of the trader.

If you believe that goods on hire are unsafe, report it to the Citizens Advice consumer service for referral to Trading Standards. If you have been injured by unsafe, hired goods, you should contact a solicitor.

PERSONAL CONTRACT HIRE: NEW CARS

Personal contract hire is a type of finance agreement that allows you to change your car regularly without having to be concerned about depreciation in value. At the start of the agreement, you choose the hire term (minimum term likely to apply) and anticipated annual mileage; these determine how much your monthly hire payment will be. Generally road tax is included. You may be able to add extras such as a servicing, repair and maintenance packages but you will have to pay for these. Points to note:

you will not own the car at the end of the agreement
there is no option to buy the car
you may be charged for excess mileage over what is sent down in the agreement
if the car has not been kept in a reasonable condition you may be liable for a refurbishment cost
read the terms and conditions of the agreement carefully before you go ahead

I'VE BEEN MISLED: WHAT ARE MY RIGHTS?

The Consumer Protection from Unfair Trading Regulations 2008 prohibit commercial practices that are unfair to consumers. If a trader misleads you or engages in an aggressive commercial practice and you make a decision to hire goods that you would not otherwise have done, the trader may be in breach of the Regulations. For example, a trader may claim your hire car is 'top of the range', justifying a greater hire charge, when in fact it is a basic model. If you have been misled or a trader has behaved aggressively, report your complaint to the Citizens Advice consumer service for referral to Trading Standards.

If you enter a hire contract because a trader misled you or because a trader used an aggressive commercial practice, the Consumer Protection from Unfair Trading Regulations 2008 also give you rights to redress: the right to unwind the contract, the right to a discount and the right to damages. See the 'Misleading and aggressive practices: rights to redress' guide for more information.

POINTS TO NOTE

Property rentals are covered by different laws. You can obtain advice from Citizens Advice, Shelter, your local authority private sector housing team or a solicitor if you have a complaint about the property itself. However, goods provided as part of the property rental are subject to safety laws. When choosing rented, furnished accommodation, check the furnishings and appliances carefully. Often letting agents as well as landlords are liable if goods supplied with the tenancy are not of the standard required by law. See 'Product safety in rented accommodation for tenants' for more information.

If you make a payment connected to the hire of goods on finance (using a credit card, for example), and if the cost was more than £100 but less than £30,000, you are protected by the Consumer Credit Act 1974. Section 75 of the Act makes the card provider as responsible as the trader for a breach of contract or a misrepresentation. You are entitled to take action against the trader, the card provider or both. This does not apply to charge cards or debit cards. If you are dissatisfied with the credit card provider's response, then complain to the Financial Ombudsman Service.

If you use a debit card to hire goods or if you use a credit card and the hire cost is less than £100 (your rights under the Consumer Credit Act 1974 would not apply) you may be able to take advantage of the chargeback scheme. Chargeback is the term used by card providers for reclaiming a card payment from the trader's bank. If you can provide evidence of a breach of contract (the hired goods were not supplied, for example) you can ask your card provider to attempt to recover the payment. Check with your card provider as to how the scheme rules apply to your card, whether internet transactions are covered and what the time limit is for making a claim.

Disputes over damage to goods and return of deposits may occur. Always read the terms and conditions of the hire contract before you agree to the hire. Check the hired goods as soon as you can and ensure that defects you see at the time of hire are noted in writing. Be aware that difficulties can arise when determining where 'fair wear and tear' ends and 'damage' begins. Always inspect hired goods on return and obtain written confirmation that there has been no damage before you leave them. The trader will hold you liable for loss or damage of the hired goods whilst they are in your possession, but they may offer you insurance cover as part of the hire service. Always obtain a copy of the insurance policy terms and conditions and check them carefully before going ahead.

Car hire agreements, especially for foreign hire, can be complex. Make sure you are properly insured and take advice from a motoring organisation if you belong to one. Obtain all agreements in writing. Members of the British Vehicle Rental and Leasing Association abide by a code of conduct and have a complaints procedure.

YOUR OBLIGATIONS WHEN YOU HIRE GOODS

When you hire goods, they belong to the trader that hired them to you. You have responsibilities as well as rights; you are not liable for fair wear and tear to the goods in normal use but you do have a duty to take reasonable care of them.

If you do not comply with the terms of the agreement, do something with the goods that you should not or do not give the goods back when the hire is finished, the trader may be entitled to repossess them. If you return the goods late, you may be liable to pay penalty charges. If the goods are damaged, you may forfeit your security deposit to cover the cost of repair or replacement. If the trader's losses are greater than the security deposit you have paid, the trader may take action against you to recover the additional costs.

IN THIS UPDATE

CE marking update.

Last reviewed / updated: October 2023

Key legislation

Please note

This information is intended for guidance; only the courts can give an authoritative interpretation of the law.

The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on amendments to legislation can be found on each link's 'More Resources' tab.

For further information in England and Wales contact the Citizens Advice consumer service on 0808 2231133. In Scotland contact Advice Direct Scotland on 0808 164 6000. Both provide free, confidential and impartial advice on consumer issues.

Trading standards

Trade Advice Document