Part III of the legislation introduces cancellation rights for off-premises and distance contracts.
Off-premises contracts are ones where the consumer and trader are physically together, but not on the business premises of the trader. Distance contracts are where the consumer and trader are not physically together.
The process of booking an appointment for a service is not considered when determining the type of contract. Consider only where the service itself will be performed. If the service will be performed at your premises, it will be an on-premises contract. If instead it is performed at the consumer's home, it will be an off-premises contract.
Cancellation rights
- In off-premises and distance contracts consumers have the right to cancel the contract, without giving a reason, and receive a full refund, except:
- Where the consumer chose an enhanced delivery method, the refund needs only to be for the cost of the basic delivery option,
- Less a deduction where the value of the goods was diminished by handling above that required to establish the nature, characteristics and function of the goods,
- Less postage costs to return the goods, only if the consumer is informed of this beforehand,
- Where the consumer requested early supply of the service, less reasonable cost of the service already provided
- Cancellation period begins on day contract is entered into and ends:
- For services and digital content, 14 days after the day the contract was entered into,
- For goods contracts, where deliveries are over a number of days, 14 days after the last delivery,
- For goods contracts with regular deliveries of goods over more than 1 days, 14 days after the first delivery,
- For all other goods contracts, 14 days after consumer takes possession of the goods.
- If the trader does not provide the consumer with information on their right to cancel before they are bound by the contract, the cancellation period is extended:
- If the information is provided within 12 months of the contract being entered into, it ends 14 days after the consumer receives the information
- Otherwise, the cancellation period ends 12 months after it would have ended if the information was provided at the proper time.
- Consumers exercise their cancellation rights by informing the trader they wish to cancel the contract, or withdraw their offer to enter into a contract. They can do this by completing a provided cancellation form or by making any other clear statement.
- If the trader provides a form on a website, they must provide the consumer with an acknowledgement of receipt on a durable medium.
- Once a consumer has cancelled, it ends the obligations of both parties to perform the contract.
- For contracts for goods, the trader must refund payments no later than 14 days from the earlier of:
- The day the trader receives back the goods
- The day the consumer provides the trader with evidence they have sent the goods back
- For all other contracts, the trader must refund the payments no later than 14 days from when the consumer exercised their cancellation rights.
- Refunds must be via the same method of payment the consumer used. No fees can be charged.
- If the goods can be returned by post the consumer must do so, or hand them back to the trader or their representative. If the trader offered to collect the goods, they must do so. Traders must also collect the goods if they were delivered to the consumer in an off-premises contract and cannot be returned by post.
- Consumers must send the goods back without undue delay, but no later than 14 days after exercising their cancellation rights. They must pay for the return if the trader informed them they would have to.
Goods - exclusions
- There are exclusions for cancellation rights:
- Gambling services
- Financial services
- Immoveable property
- Doorstep deliveries by regular roundsmen
- Vending machines
- Public pay phones
- Single use of telephone, internet etc.
- Goods sold by way of execution
- Prescriptions
- Passenger transport services
- Off-premises contracts under £50
- Goods/services where price is dependent on fluctuations in the financial market outside the trader's control which may occur during the cancellation period
- Goods made to consumer's specification or clearly personalised
- Goods that will deteriorate rapidly
- "wine on the vine" type contracts
- Urgent repair/maintenance callouts (but not any additional services or goods supplied at the same time)
- Newspapers, magazines etc. but not subscriptions
- Public auctions
- Goods that have been unsealed and therefore can't be returned for hygiene reasons
- Sealed audio or video recordings once the seal has been broken
- If the goods become mixed inseparably after delivery
- Accommodation, if the contract provides a specific date of performance
- Goods transport, if the contract provides a specific date of performance
- Vehicle rental services, if the contract provides a specific date of performance
- Catering, if the contract provides a specific date of performance
- Services related to leisure activities, if the contract provides a specific date of performance
Services cancellation
- For a contract for supply of a service, performance can only begin during the cancellation period if the consumer makes an express request for this and (for off-premises contracts) this is made on a durable medium.
- Consumers will lose their cancellation rights for a service contract if they make an express request for the work to begin, the contract is then fully performed, and the consumer had acknowledged that they would lose their cancellation rights if the contract was fully performed.
- If the services is cancelled during the cancellation period, the consumer must pay for the service provided up to the cancellation, in proportion to what has been supplied, based on the price agreed or, if the price agreed is excessive, on the basis of the market value of the service. If the trader didn't inform the consumer about their cancellation rights, they would not be liable to pay.
Supply of digital content in cancellation period
- Digital content not supplied on a tangible medium (e.g. downloaded/streamed etc), can only be supplied during the cancellation period if, the consumer gives express consent, acknowledges that they will lose their cancellation rights and they have received confirmation of the contract as required. In that case, the consumer loses their cancellation rights.
Ancillary contracts
- Ancillary contracts are contracts by which a consumer acquires goods or services related to a contract, where those goods/services are provided by the trader or by a third party on the basis of an arrangement between the third party and the trader.
- Ancillary contracts are automatically terminated, with no cost to the consumer, except:
- Where the consumer chose an enhanced delivery method, where the refund only need be for the basic method,
- Where there can be a deduction where the value of the goods is diminished by consumer handling,
- Where the goods are returned by the consumer and they have to pay ,
- Where the consumer requests early supply of service and they have to pay a proportionate amount.
- The trader must inform the 3rd party that the ancillary contract has been terminated.
Template for cancellation rights
- For off-premises and distance contracts, Part III requires you to inform the consumer about their right to cancel the contract. It might be a criminal offence not to do so.
- We have provided templates as detailed below of the information that must be communicated about cancellation rights. You don't have to use these templates, but if you do, you will have met your obligations under the Ordinance.
- Template instructions cover the following areas:
- Template 1 - for service contract,
- Template 2 - for digital content not on tangible medium, e.g. downloadable apps or games,
- Template 3 - for sale of goods contracts,
- Template 4 - for sales contracts where goods/pieces or lots are ordered in one order but delivered separately, meaning delivery by instalments,
- Template 5 - for contracts where goods are regularly delivered during a defined period, e.g. subscriptions.
- Please note that the templates have editable areas that need to be considered and amended accordingly before being provided to the consumers.
- You must also provide a cancellation form, this can be a form on a website, to the consumers to assist them in communicating the withdrawal or cancellation during the cooling off period. The consumer can choose not to use it and communicate the cancellation in a clear statement to the trader using another method.
- You don't have to use the Template Cancellation Form provided here, so long as you use an appropriate form, but if you do, you will have met your obligation under the Ordinance.
- The templates can be found in the downloads section of this page.
