Businesses that sell to consumers need to BEWARE of the Cancellation of Contracts Made in a Consumer’s Home or Place of Work Etc Regulations 2008

A swift moveThe regulations apply to businesses that enter into contracts with consumers in their home or place of work. They apply even if the customer invited the business to come round.

The regulations require businesses to give the consumer a notice, in a prescribed form, informing the consumer that they have a right to cancel the contract within 7 days.

I suspect that the regulations were aimed at businesses which use aggressive sales tactics. Perhaps in the past some window companies or timeshare companies were guilty of this. However, the regulations affect all businesses including many reputable businesses. Builders and tradesmen are particularly vulnerable because they will almost certainly visit the customer at their home in order to quote. However, other businesses are potentially affected including solicitors.

The case of Robertson –v- Swift earlier this year went up to the Court of Appeal. In that case, Mr Swift was a removal man and Dr Robertson invited him round to his house to give a quote for his services. Mr Swift quoted £7,600 which Dr Robertson duly accepted and he paid a deposit of £1,000.

Dr Robertson found someone else cheaper and wanted out of the contract. Mr Swift wanted to exercise a cancellation clause which entitled him to be paid 50% of the quoted fee. Dr Robertson wanted his deposit back. They ended up in the Court of Appeal.

The Court of Appeal was sympathetic to Mr Swift who was a reputable businessman. However, the Court of Appeal held that as Mr Swift had not complied with the regulations the contract was not enforceable and Mr Swift was not entitled to his cancellation fee. They did allow Mr Swift to keep the deposit.

I’ve been personally involved in two disputes concerning these regulations. The first one involved a tradesman who had carried out a substantial amount of work at a residential property and the customer was refusing to pay. I acted for the tradesman. The second one concerned a dispute between a builder and his customer who was refusing to pay for building works. This time I acted for the customer.

In both cases, there was a dispute about whether the regulations applied the issue being whether the contract was concluded in the customer’s home or not. In both cases, the builder/tradesman was owed several thousand pounds. However, by not complying with the regulations the builder/tradesman  gave the customer a massive stick to beat them with.

The moral of the story is that businesses which go out to customers at their home or place of work must comply with the regulations by giving the customer the relevant cooling off notice.

Hastings & Co are based in Chelmsford, Essex and specialise in litigation and advise builders, tradesmen and consumers in connection with building disputes. For advice or assistance contact Liam  Hastings on 01245 835 305.

Useful links:

The regulations can be found here: http://www.legislation.gov.uk/uksi/2008/1816/contents/made

How to prepare a notice:

Schedule 4 of the regulations lets you know what information must be in the cooling off notice: http://www.legislation.gov.uk/uksi/2008/1816/schedule/4/made

Disclaimer: this is only intended as a brief overview of the law and not intended as a substitute for proper legal advice.

Here’s a template notice that you could attach to your quote/contract. The trader needs to insert the correct information in the square boxes.

Notice of the right to cancel

[insert the name of your business including trading name if any] hereby gives you notice that you have a right to cancel the contract if you wish and that this right can be excercised by delivering, or sending (including by electronic email) a cancellation notice to the person mentioned in the next paragraph at any time within the period of 7 days starting with the day of receipt of a notice in writing of the right to cancel the contract.

The cancellation notice should be sent to [insert name of person] at [insert address] or by electronic email to [insert email address].

This notice concerns the following contract: [insert your reference number, code or other details to enable the consumer to identify the correct contract or offer]

The notice of cancellation is deemed to be served as soon as it is posted or sent to us or in the case of an electronic communication on the day it is sent to us.

You may use the following cancellation form if you wish:

Cancellation Notice

If you wish to cancel the contract you MUST DO SO IN WRITING and deliver personally or send (which may be by electronic mail) this to the person named below. You may use this form if you want to but you do not have to.

Complete, detach and return this form ONLY IF YOU WISH TO CANCEL THE CONTRACT.

To: [trader to insert name and address of person to whom notice may be given]

I/We (delete as appropriate) hereby give notice that I/We (delete as appropriate) wish to cancel my/our (delete as appropriate) contract [trader to insert reference number code or other details to enable the contract or offer to be identified. He may also insert the name and address of the consumer.]

Signed……………………………………………

Name and address

……………………………………………………………………………………

……………………………………………………………………………………

Date………………………………………………

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