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Is there any consumer protection available for franchisees?
Consumer protection is provided by a number of acts that imply certain terms into contracts to help protect the public. A consumer is a person not acting in the course of a business. It is unlikely that a franchisee would be considered a consumer as the relationship with the franchisor is formed in the course of a business and, therefore, the protection afforded to a franchisee is less than that available to a consumer. The Sale of Goods Act ensures that goods are of satisfactory quality and fit for the purpose of sale. Therefore, when a franchisor sells goods to its franchisees the Sale of Goods Act will imply terms regarding the quality of those goods. The Supply of Goods and Services Act 1982 implies a term into contracts for services that the supplier will carry out the service with reasonable care and skill. This will apply to the franchisor that supplies services under the franchise agreement to its franchisees. However, as the franchisee is not a consumer the franchisor can exclude, limit and vary the implied terms referred to above as long as such provision satisfies a test of reasonableness, which is set out in the Unfair Contract Terms Act. UCTA also applies to contractual terms in standard form contracts (which would include franchise agreements) excluding or restricting liability for breach of contract, which have to be reasonable.
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