Definitions of Consumer, Goods and Services

Introduction

We are all consumers in some way or the other. According to oxford dictionary, a consumer is a buyer of goods or services. The expression ‘consumer’ in the general sense, means ‘all of us can be called ‘consumers’, when we buy any movable or immovable item. Property or rental services for various purposes.’ But in the current socio-economic scenario, we find that the consumer is the victim of many unfair and unethical practices adopted in the market.

Definitions of Consumer, Goods and Services

Who is a Consumer?

Meaning of Consumer: –consumer is a person or a group who intends to order, orders, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, not directly related to entrepreneurial or business activities. Section 2(d) of the Consumer Protection Act says that consumer means any person who: –

  1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment, and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
  2. hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment, and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.

What is the Consumer Protection Act?

The Consumer Protection Act, implemented in 1986, gives easy and fast compensation to consumer grievances. It safeguards and encourages consumers to speak against insufficiency and flaws in goods and services. If traders and manufacturers practice any illegal trade, this act protects their rights as a consumer. The primary motivation of this forum is to bestow aid to both the parties and eliminate lengthy lawsuits.

This Protection Act covers all goods and services of all public, private, or cooperative sectors, except those exempted by the central government. The act provides a platform for a consumer where they can file their complaint, and the forum takes action against the concerned supplier and compensation is granted to the consumer for the hassle he/she has encountered.

What are Consumer Goods?

Meaning of Consumer Goods: – Consumer goods are goods sold to consumers for use at home or school, or for entertainment or personal use. There are three main types of consumer goods: – durables, non-durables, and services. Consumer goods are products bought for consumption by the average consumer. Alternatively called final goods, consumer goods are the end result of production and manufacturing and are what a consumer will see stocked on the store shelf. Clothing, food, and jewelry are all examples of consumer goods.

Consumer Goods

Durables are consumer goods that have a long-life span (i.e., more than three years) and are used over time. Examples include bicycles and refrigerators. Non-durables are consumed in less than three years and have a short life span. Examples of non-durable goods include food and drink. Services include auto repair and haircuts. Consumer goods are also called final goods or final products, as they are the final output of a productive process that occurs over time.

Exception: – A person is not a consumer if he purchases goods for commercial or resale purposes. However, the term “commercial” does not include the use of goods purchased and used by the consumer, exclusively for the purpose of earning his livelihood through self-employment.

What are Consumer Services?

Meaning of Consumer Services: – Customer Service is the interaction between the buyer of a product and the company that sells it. Consumer Services are the intangible economic product that is provided by a person on the other person’s demand. It is an activity carried out for someone else. Most retailers see this direct interaction as a critical factor in ensuring buyer satisfaction and encouraging repeat business.

They can only be delivered at a particular moment, and hence they are perishable in nature. They lack physical identity. Services cannot be distinguished from the service provider. The point of sale is the basis for consumption of services. Services cannot be owned but can only be utilized. You can understand this by an example: If you buy a ticket for watching a movie at the multiplex, it doesn’t mean that you purchased the multiplex, but you have paid the price of availing services.

Differences between Consumer Goods and Services

The basic differences between goods and services are mentioned below: –

  1. Goods are the material items that the customers are ready to purchase for a price. Services are the amenities, benefits or facilities provided by the other persons;
  2. Goods are tangible items i.e. they can be seen or touched whereas services are intangible items;
  3. When the buyer purchases the goods by paying the consideration, the ownership of goods moves from the seller to the buyer. Conversely, the ownership of services is non-transferable;
  4. The evaluation of services is difficult because every service provider has a different approach of carrying out services, so it is hard to judge whose services are better than the other as compared to goods;
  5. Goods can be returned to or exchanged with the seller, but it is not possible to return or exchange services, once they are provided;
  6. Goods can be distinguished from the seller. On the other hand, services and service provider are inseparable;
  7. A particular product will remain same regarding physical characteristics and specifications, but services can never remain same;
  8. Goods can be stored for future use, but services are time bound, i.e. if not availed in the given time, then it cannot be stored;
  9. First of all the goods are produced, then they are traded and finally consumed, whereas services are produced and consumed at the same time.

Applicability of Tort Law in Consumer Protection Cases

By paying compensation, the law of tort is primarily concerned with the redressal of wrongful civil actions. Conflicts of interest are bound to happen in a society where men live together, and they may harm one or the other from time to time. In addition, with rapid industrialization, fraudulent liability has come to be used against manufacturers and industrial units.

The law of torture came from common law, and overall, this branch of law is uncodified. Strict liability is codified only to a very limited extent, such as worker’s compensation, motor vehicle accidents, environmental degradation, consumer protection etc. The development of consumers protection systems is quite young and can be traced back to the Consumers’ Bill of Rights in which the recognition of consumer rights began internationally.

By awarding compensation, the law of tort is primarily concerned with redressing wrongful civil actions. Conflict of interest is bound to occur in a society where men live together, and they can cause damage to one or the other from time to time. Moreover, tortious liability has come to be used against manufacturers and industrial units with rapid industrialization. The Law of tort came from Common Law, and by and large, this branch of law remains uncodified. Tortious liability has only been codified to a very limited extent, such as worker’s compensation, motor vehicle accidents, environmental degradation, consumer protection and so on.

These consumer rights were further strengthened on 9 April 1985, passed a resolution by United Nations General Assembly that issued general guidelines including: –

  1. Physical security;
  2. The protection and promotion of consumer economic rights;
  3. Standards for the safety and quality of consumer goods and services;
  4. Measures to enable consumers to get redressal;
  5. Measures relating to specific sectors such as food, water and pharmaceuticals; and
  6. Consumer education and information programmes.

What are the rights and responsibilities of a consumer?

The Bill recognized six important consumer rights, as follows: –

  1. Right to Safety: – Before buying, a consumer can insist on the quality and guarantee of the goods. They should ideally purchase a certified product like ISI or AGMARK.;
  2. Right to be Informed: – The buyers should be informed with all the necessary details of the product, make her/him act wise, and change the buying decision;
  3. Right to Choose: – Consumer should have the right to choose from a variety of goods and in a competitive price.; and
  4. Right to be Heard: – This means the consumer will get due attention to express their grievances at a suitable forum.
  5. Right to Consumer Education: – Consumer should be aware of his/her rights and avoid exploitation. Ignorance can cost them more.
  6. Right to Seek Compensation: – The defines that the consumer has the right to seek redress against unfair and inhumane practices or exploitation of the consumer.

The Responsibilities of the Consumer are as follows: –

  1. Responsibility to be Aware: – A consumer has to be mindful of the safety and quality of products and services before purchasing.
  2. Responsibility to think Independently: – Consumer should be well concerned about what they want and need and therefore make independent choices.
  3. Responsibility to Speak Out: – Buyer should be fearless to speak out their grievances and tell traders what they exactly want
  4. Responsibility to Complain: – It is the consumer’s responsibility to express and file a complaint about their dissatisfaction with goods or services in a sincere and fair manner.
  5. Responsibility to be an Ethical Consumer: – They should be fair and not engage themselves with any deceptive practice.

Object of Consumer Protection Act

On the domestic front, the consumer movement began with the enactment of the Consumer Protection Act, 1986 (hereinafter referred to as the CPA), which aimed “to better protect the interests of consumers and to provide for the establishment of quasi-judicial authorities” for settlement of consumer disputes”. The Act has primarily given statutory recognition to the rights of the consumer in India.

These rights specified in the Act include: –

  1. The right to be protected from the marketing of goods and services dangerous to life and property;
  2. The right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumer from unfair trade practices;
  3. The right to access a variety of goods and services at competitive prices;
  4. The right to be heard and to be assured that due consideration will be given to consumer interests on suitable flora;
  5. The right to be redressed against unfair trade practices or dishonest exploitation of consumers; And
  6. Right to consumer education.

However, prior to these developments, the concern for protecting the rights and interests of consumers may have been located under Tort Law, which is still equally effective and enforceable. Hence, this monograph tries to throw light on the relationship between Tort Law and Consumer Protection with special emphasis on cases of medical negligence.

The primary objective of consumer protection system is to protect against deficiency in service and defects in goods. Thus, these aspects will primarily be discussed under tort law and consumer laws, with sector-specific treatment of consumer affairs. Insurance, transportation, banking and finance, medicine, etc. sectors are specifically covered in this monograph.

Doctrine of Caveat Emptor

Meaning of Caveat Emptor: – The Doctrine of Caveat Emptor means that the responsibility lies on the buyer of goods and he must perform due diligence before the purchase of the goods. It is expected from the buyer to be alert in a contract of sale. He cannot hold the seller responsible for inferior goods unless the contact is based on fraud. The Doctrine of Caveat Emptor is generally applicable in the case of property transactions but it can also be applied in the sale of goods and other services. 

Section 16 of the Sale of Goods Act, defines it as ‘“there is no implied warranty or condition as to the quality or the fitness for any particular purpose of goods supplied under such a contract of sale“

Let’s explain the Doctrine of Caveat Emptor with an example. The seller makes the goods available in the market and it is the responsibility of the buyer to inspect them well before buying. If the buyer later discovers a defect in the goods that could have been detected earlier by him, he cannot sue the seller for inferior quality.

Though the responsibility lies with the buyer, he can shift it to the seller under the given conditions: –

  1. If the buyer has informed the seller about the purpose of the purchase, before making the purchase.
  2. If the buyer relies on the technical expertise and experience of the seller.
  3. If the goods are of a description that the seller supplies in his normal course of business.

The caveat emptor: – ‘let the buyer beware’ doctrine of the law concerning the sale of goods, assumed that the consumer was responsible for protecting himself and would do so by applying his intelligence and experience in negotiating the terms of any purchase. That principle may have been appropriate for transactions conducted in village markets. In early times, the consumer may have been able to protect himself since the products were less sophisticated and could be inspected before purchase. But now the conditions have changed.

Many modern goods are technological mysteries. The consumer knows little or nothing about these highly sophisticated goods. In real life, products are complex and of great variety and consumers and retailers have imperfect knowledge. The principle of caveat emptor, thus, has ceased to be appropriate as a general rule. The consumers need protection by law when goods fail to live up to their promises or indeed cause injury.

Consumers Protection in India

In India, given the ever-increasing population and the consequent need for many goods and services, which have no equal supply, the need for consumers protection is significant. India’s growing consumers exploitation can be attributed to lack of education, poverty, illiteracy, lack of information, traditional views of Indians suffering in silence and their ignorance of the legal remedies available in such cases.

Consumer Protection in India

Consumerism in India is as old as business. There are references in Kautilya’s Arthashastra to the concept of consumer protection against exploitation such as manipulation and adulteration of weights and measures. Along with this, the same book also provides for punishment for these crimes. Kautilya’s Arthashastra Book IV, Chapter II, “Removal of Thorns”, deals with consumer protection against traders.

When a trader sells or pledges substandard goods by misrepresenting them as superior goods or adulteration of medical articles with grain, oil, salt, fragrances and similar substandard articles, the said dealer shall not only be liable to be punished, but also to be compelled to compensate for the loss.

Differences between Law of Torts and Consumer Protection Act, 1986

S.No.Law of TortConsumer Protection Act
1.In the case of tort, losses are always unliquidated or unascertained and invariably, they are not and cannot be real.In the case of the CP Act of 1986, the aggrieved consumer is entitled to liquidated damages only, i.e., pre-settled or actual damages. Redressal agencies can ascertain the damages.
2A tort is an infringement of a right in rem.In the case of this Act, the consumer is injured or suffer loss then, it is an infringement of a right in personam.
3.The philosophy of the law of tort is a new subject and formulated into a separate branch just from the beginning of the 20th century.Consumer awareness, consumerism, consumer rights are formulated in a separate law department is a very fresh subject, formulated in a separate law department just twenty years ago. 
4.In tort, the duty is one that is imposed by the law and is owned by the community at large. This principle is known as “Respondeat Superior”.The duty is also imposed by the law in consumerism but is owned by the seller /manufacturer/trader. This duty’s principle is known as “Caveat Venditor”. 
5.Sometimes the motive is an essential factor in determining the liability, for example, malicious prosecution, defamation, etc.The motive in consumerism is not a key factor. The defaulting party, i.e. the seller/trader/manufacturer, must pay the costs of the goods or services or replace them with new defect-free goods or actual damages, without any inquiry as to the motive.
6.Tort law has not been codified. It’s the law made by the judge.While consumer law is new, it is codified.
7.In tort, a person may be entitled to such damages that he has not suffered in actuality. (injuria sine damnum). Consumers are entitled only to actual damage or replacement of new goods or services under consumer law.
8.In tort, exemplary or vindictive damages are awarded.Actual damages are generally awarded to consumers. Exemplary or vindictive damages can also be awarded in exceptional cases where the seller acts in bad faith and negligently.
9.There is no establishment of separate courts. The cases of tort are also enquired in ordinary civil and criminal courts.Separate consumer disputes redressal agencies are established in India, one at National level-National Commission, second is at State level-State Commission, and the third District level-District Forum.
10.The plaintiff should pay the court fee, the fee for the lawyer, etc.There is no fee for the court or for the lawyer.
11.Generally, the petition must be filed only by the aggrieved. The litigation of public interest is allowed to a limited extent in exceptional circumstances. PIL is now highly prevalent in environmental law, coupled with tort.Public interest litigation is allowed. The complaints can also be filed by third parties on behalf of aggrieved consumers.
12.The inquiry will be carried out for a long time.The inquiry must be concluded within a prescribed time by the redressal agencies as prescribed by the Act.
13.The proceedings are conducted in accordance with the rigid legal principles, and natural justice is also followed.The proceedings are conducted in a fast and simple manner. There are no legal procedures to follow. Natural justice principles may not also be taken into consideration.

Conclusion

Indian tort law while being less developed, based on English tort law and English court decisions. As a result, Indian consumers will also have to resort to the decisions of the English courts on the product liability domain to base their claims under tort law. But the liability was based on strict liability under the English Consumer Protection Act 1987. As a result of this product liability under tort law, more consumers have been oriented since the strict liability in place of negligence-based liability in England has been supported. It is important to note here that the Indian law under C.P. Act 1986 bases the product on the trader’s and service provider’s negligence. Thus, the Indian courts will follow either the Common Law principles of negligence-based liability or strict liability as proposed in the Ryland v. Fletcher case and under C.P. Act,1987  while dealing with product liability under tort law. 

As a result, the  Consumer Protection Act,1986 was enacted with the aim of providing Indian consumers with “cheap, simple and quick” justice.

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