Cooling-off and cancelling unsolicited contracts

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Consumer

Your cooling-off and termination rights

You have 10 business days to reconsider the contract (unsolicited agreement).  During this time you can cancel the contract without penalty. This is called the ‘cooling-off’ period.

If the agreement was negotiated over the phone, the cooling-off period begins on the first business day after you received the contract.

If the agreement was not negotiated over the phone, the cooling off period begins on the first business day after the contract was made (signed by both parties to the contract).

During the 10 business day cooling-off period, the trader must not supply any goods worth more than $500 or services (which are not electricity or gas) or accept any payment from you. 

You are not obliged to pay for unrequested goods, whether they are mailed to you or left at your door, or for services a supplier undertook without authorisation. 

Extended cooling off period

You may terminate an agreement up to three months after it is made (or after the contract is received, if the agreement is by phone) if the salesperson:

  • visited you outside of the permitted selling hours;
  • did not disclose the purpose of the visit;  
  • did not produce identification; or 
  • did not leave the premises upon request.

The period is extended to six months if a salesperson:

  • did not provide you with information about the cooling-off period; 
  • was in breach of other requirements for unsolicited agreements (such as failing to provide a written copy of the agreement or not including required information in the written agreement); or
  • supplied goods worth more than $500 or services, other than electricity or gas, during the cooling-off period.

Terminating an agreement

You may terminate an agreement verbally or in writing.

Written notice can be delivered in person, by post, fax or email..  It does not need to be on a specific form, however you should be given a cancellation form/notice with the agreement. 

The termination date is considered to be the date on which notice of termination was given/sent/posted.

What happens if you terminate the agreement

If you notify the trader your intention to terminate the agreement, then the contract is cancelled as of that date.

The notice is effective even if:

  • written notice has been given but the trader has not received it; and
  • goods or services supplied to you have been wholly or partly consumed/used.

For goods bought on credit or finance, it is the supplier’s responsibility to contact the credit provider and arrange for cancellation.

Related contracts

If you cancel an unsolicited agreement then any related contract is also cancelled.

Example:

You agree to buy a $900 washing machine from a door-to-door trader, and also sign a separate contract for servicing the washing machine, costing $80. This second contract is not covered by the cooling off provisions but if you cool off on the washing machine purchase then the service contract is also cancelled.

For goods bought on credit or finance, it is the supplier’s responsibility to contact the credit provider and arrange for cancellation.

Refund entitlement

If you terminate the agreement, the supplier must promptly return or refund to you any money paid under agreement or a related contract.

What happens to the goods/services after you terminate the agreement?

You must, within a reasonable time, return any goods that have not been consumed or tell the supplier where to collect them.

If you have not taken reasonable care of the goods, the supplier can seek compensation for depreciated value.

You do not have to pay compensation for normal use of the goods or circumstances beyond your control.

If the supplier does not collect the goods within 30 days of termination, then you can keep them.

If you cancel the contract after the cooling-off period and a service has already been provided, you may have to pay for the service. Obviously, the service can’t be 'undone' once it has been provided.

 

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