Why Every Product-Based Business Should Understand the Consumer Protection Act 1987

William Slivinsky
May 30
10 min read

Updated: 3 days ago

Why Every Product-Based Business Should Understand the Consumer Protection Act 1987 is simple:

if your business produces, imports, brands, supplies or sells goods, product liability risk can arise before a complaint ever reaches court.

This is especially important for businesses dealing with electrical equipment, machinery, tools, components, appliances, heating products, workshop equipment, beauty equipment, home products, vehicle parts or imported goods.

A product-based business does not only need to think about sales, stock and delivery. It also needs to think about safety, compliance, documentation, warnings, instructions, supplier responsibility, insurance, maintenance requirements and customer communications.

That is where product liability becomes a business legal advice issue.

The Consumer Protection Act 1987 can create liability where damage is caused wholly or partly by a defect in a product. In practical terms, this means that if a product causes injury, death or property damage, the business may need to answer serious questions about how the product was produced, imported, branded, supplied, marketed, fitted, maintained and explained.

This is not just about whether the product was faulty in an ordinary customer service sense.

The key question is whether the product was defective within the meaning of the Act.

Product-based businesses should also remember that product descriptions, adverts and customer-facing wording may create wider consumer law risk. If your business sells goods online, relies on reviews, uses social media advertising or makes price and performance claims on its website, you should also consider the Digital Markets, Competition and Consumers Act 2024. I explain that separate online marketing and consumer compliance risk in my article on the DMCC Act and business legal advice for online sales, adverts and customer communications.

Why Every Product-Based Business Should Understand the Consumer Protection Act 1987 before selling goods

A business may think that product liability begins when a customer complains.

In reality, the risk starts earlier.

It can start when the product is designed.
It can start when the product is imported.
It can start when the business chooses a supplier.
It can start when the business puts its own brand on the product.
It can start when the website description is written.
It can start when the warning label is drafted.
It can start when the fitting instructions are prepared.
It can start when the maintenance requirements are explained.
It can start when a salesperson tells a customer what the product can do.

For that reason, product liability should be considered before the product is sold, not only after something goes wrong.

This is where proper business legal advice and drafting can protect the business.

However, the protection must be understood correctly.

Drafting is not used to avoid liability for a defective product. The Act prevents that. Instead, proper drafting helps define the product, its intended use, its limits, its safety requirements, the correct method of fitting, inspection and maintenance, and the responsibilities of the customer or user.

That difference matters.

Bad drafting tries to exclude liability.

Good drafting helps show whether the product was defective at all, whether the damage was caused by the product, or whether the real cause was misuse, poor fitting, lack of maintenance, incompatible parts, later modification or failure to follow clear instructions.

Section 2: who may be liable for a defective product

Under section 2 of the Consumer Protection Act 1987, liability may arise where damage is caused wholly or partly by a defect in a product.

The businesses most obviously exposed are:

the producer of the product;
a person who holds themselves out as producer by putting their name, trademark or other distinguishing mark on the product;
a person who imports the product into the United Kingdom in the course of business in order to supply it to another.

A supplier can also become exposed if the person who suffered damage asks the supplier to identify the producer, importer or previous supplier, and the supplier fails to do so within a reasonable period.

For business owners, this means product liability is not limited to the factory that physically made the item.

A business can become exposed because it imports the product, places its own brand on it, supplies it into the market, or cannot properly identify the supply chain when asked.

That is why supplier records, import documents, invoices, batch numbers, product codes and correspondence should be kept properly.

Section 3(1): the legal meaning of defect

Section 3(1) is the core test.

A product is defective if its safety is not such as persons generally are entitled to expect.

This is broader than asking whether the product worked.

Safety includes safety in the context of risks of death or personal injury. It also includes safety in the context of risks of damage to property.

That means a product-based business should not only think about obvious physical injury. It should also consider whether the product could cause fire, electrical damage, water damage, impact damage, damage to surrounding property, damage through overheating, leakage, collapse, malfunction or unsafe interaction with other products.

For example, an electrical product may create legal risk not only if it injures a person, but also if it causes fire damage to private property.

A product may therefore be legally risky even where the customer complaint begins as a technical fault or performance issue.

Section 3(2): marketing, warnings, instructions and expected use

Section 3(2) is where drafting becomes extremely important.

When deciding what safety people are generally entitled to expect, the court may consider all the circumstances, including:

the manner in which the product was marketed;
the purposes for which it was marketed;
the product’s get-up or presentation;
the use of any mark in relation to the product;
instructions for doing or refraining from doing anything with or in relation to the product;
warnings with respect to doing or refraining from doing anything with or in relation to the product;
what might reasonably be expected to be done with or in relation to the product;
the time when the product was supplied.

This is why product descriptions, adverts, labels, fitting instructions, maintenance requirements and warnings are not just marketing material.

They can help define the safety expectation.

If a product must be fitted by a qualified person, the documents should say so clearly.

If a product must be inspected every six months, the documents should say so clearly.

If a product must not be used outdoors, overloaded, modified, repaired by the user, used with incompatible parts, exposed to moisture, or operated without ventilation, the documents should say so clearly.

If a product has wear-and-tear parts that must be checked or replaced, the documents should say so clearly.

Those instructions do not exclude liability for a defective product. But they may be highly relevant to whether the product was defective in the first place and whether the later damage was caused by the product or by misuse, poor fitting, lack of maintenance or failure to follow instructions.

That is the legal value of good drafting.

Section 7: terms and notices cannot exclude liability

A business must be careful here.

Section 7 of the Consumer Protection Act 1987 says that liability under Part I for damage caused wholly or partly by a defect in a product cannot be limited or excluded by any contract term, notice or other provision.

This means a business cannot simply write: We accept no liability for defective products.

That kind of wording will not remove liability under the Act.

So the purpose of drafting is not to contract out of the Consumer Protection Act 1987.

The purpose is different.

The purpose is to make the product documents accurate, clear and complete so that the business can show what the product was, what it was designed for, how it was to be used, how it was to be fitted, what maintenance was required, what warnings were given and what risks were outside proper use.

Which will fall precisely into the question the act is asking at section 3, namely: what the consumer was entitled to expect?

That can matter when deciding defect, causation, misuse, maintenance failure, contributory negligence and insurance cover.

Maintenance, fitting and inspection: why they matter

Many products are not safe in every condition forever.

Some products require professional installation.
Some require regular maintenance.
Some require inspection.
Some require cleaning.
Some require replacement parts.
Some require calibration.
Some require ventilation.
Some require safe storage.
Some require use only with compatible products.
Some require a competent person to fit, service or repair them.

If the business knows this, the product documents should make it clear.

For example, if an electrical product causes damage after the customer ignored clear inspection and maintenance requirements, the business may argue that the product was not defective when supplied, and that the damage was caused by failure to maintain or improper use.

That is very different from saying that the business has excluded liability.

The business is not saying:

“We are not liable even if the product is defective.”

The business is saying:

“The product was not defective when supplied; it was safe when used, fitted and maintained as clearly instructed. The later damage was caused by something else.”

This distinction should sit at the heart of the article and the wider series.

Section 4: statutory defences and why records matter

Section 4 contains statutory defences.

One important defence is where the alleged defect is attributable to compliance with a requirement imposed by or under an enactment, or with an assimilated obligation.

For a business, that means legal and technical compliance records can become very important.

If a product was designed, labelled, supplied or limited in a certain way because a legal requirement or product-specific rule required it, the business should be able to prove that.

Other defences include situations where the person proceeded against did not supply the product, where the supply was not in the course of business, where the defect did not exist at the relevant time, where the state of scientific and technical knowledge at the relevant time was not such that the defect could have been discovered, and where a component defect was wholly attributable to the design or instructions of a later product into which it was incorporated.

This is why a business should keep a proper product file.

That file may include:

product specifications;
supplier details;
import records;
batch numbers;
conformity or compliance documents;
testing records;
product standards relied on;
design records;
fitting instructions;
maintenance instructions;
warning labels;
website descriptions;
customer communications;
insurance documents;
complaint records.

A product liability dispute often becomes a document dispute.

What did the business know?

What did the supplier provide?

What did the customer receive?

What was written in the product specification?

What warnings were included?

What standards applied?

What records exist?

If the business cannot answer those questions clearly, it may struggle to defend its position.

Section 5: what damage is covered

Section 5 deals with damage.

The Act covers death, personal injury and loss of or damage to property, including land.

However, there are limits. Liability under this part does not cover damage to the defective product itself. There are also restrictions around property damage, including private use, occupation or consumption, and a monetary threshold for property damage.

For business owners, this means it is important to separate different types of complaint.

A customer saying “the product broke” is not the same as a customer saying “the product injured me” or “the product caused fire damage to my home.”

The legal route, insurance position and response strategy may be different.

Section 6(4): contributory negligence

Section 6(4) connects product liability with contributory negligence.

Where damage is caused partly by a defect in a product and partly by the fault of the person suffering the damage, contributory negligence principles may apply.

This is another reason why instructions, warnings, fitting guidance and maintenance requirements matter.

If the customer ignored clear warnings, failed to maintain the product, used it in an unsuitable environment, modified it, overloaded it, used incompatible parts, or failed to obtain proper fitting, the business may need to consider whether contributory negligence is relevant.

Again, this is not about excluding liability.

It is about identifying the real cause of the damage and whether the claimant’s own conduct contributed to it.

Product liability insurance is not automatic protection

Product liability insurance is important, but it is not a substitute for compliance, accurate drafting or good records.

A business should not assume that because it has insurance, every product claim will automatically be covered.

Insurance cover may depend on policy wording, exclusions, disclosures, product type, product use, compliance records, safety warnings, supplier information and whether the business followed required procedures.

This is why product liability insurance should be checked alongside the documents used to sell and supply the product.

The key question is not only:

“Do we have insurance?”

The better question is: Would our product documents, warnings, specifications, supplier records and customer communications support our position if a claim was made?

If the answer is uncertain, the business should review the position before a problem arises.

How business legal advice and drafting can help

Product liability is not only a problem for large manufacturers.

Small and medium-sized businesses can also be exposed, especially where they import goods, rebrand products, sell electrical equipment, assemble components, provide technical products or rely heavily on suppliers.

Business legal advice can help identify where the risk sits before it becomes expensive.

This may include reviewing product descriptions, website wording, customer emails, terms and conditions, warning labels, fitting instructions, maintenance instructions, supplier documents, insurance wording and complaint responses.

Legal drafting can help make product documents clearer, safer and more commercially controlled.

A consultation can also help the business understand whether the issue is mainly about product safety, customer expectations, supplier responsibility, insurance cover, contract wording, causation, maintenance, misuse or complaint handling.

The aim is practical.

Identify the risk early.

Fix weak documents.

Avoid careless promises.

Strengthen warnings and instructions.

Document maintenance and fitting requirements.

Keep better evidence.

Respond properly if a complaint is made.

When a business should take advice

A business should consider taking advice if it produces, imports, brands, supplies or sells products that could cause injury, fire, electric shock, property damage or other serious loss.

Advice is also useful if the business is launching a new product, changing supplier, importing goods from abroad, adding its own brand, selling technical products, receiving repeated complaints, dealing with an insurer, or facing a claim from a customer.

Early advice is usually cheaper and safer than waiting until the complaint has escalated.

If your business deals with products and you are unsure whether your documents, warnings, specifications, supplier terms, maintenance instructions or insurance position are strong enough, it is sensible to review the position before there is a serious dispute.

Practical conclusion

Every product-based business should understand the Consumer Protection Act 1987 because it connects product safety with business documentation.

The Act is not only about defective goods. It is about safety expectations, marketing, instructions, warnings, compliance, damage, causation, responsibility and insurance.

For business owners, the lesson is clear.

Do not look at product liability only after something has gone wrong.

Look at it when drafting the advert.
Look at it when preparing the product description.
Look at it when writing fitting instructions.
Look at it when setting maintenance requirements.
Look at it when preparing warnings.
Look at it when checking supplier documents.
Look at it when reviewing insurance.
Look at it before the product reaches the customer.

That is how legal advice, drafting and consultation can help protect the business before a product issue becomes a claim.

The information on this blog is general guidance only and should not be relied on as legal advice. Legal outcomes depend on the facts of each case. For tailored advice, please book a consultation.