Goods linked to a service
People often buy goods linked to services. An example is a mobile telephone, often linked to a contract for network services. This is sometimes called a ‘linked service contract’.
If you are returning goods within a reasonable time and are entitled to a refund, you can also cancel the linked service contract. You can do this when returning the goods, or within a reasonable time.
These contracts do not automatically end.
A consumer signs up for a package that includes a modem and internet access. She rejects the modem because it turns out to be faulty but chooses to keep her internet connection. Alternatively, she could reject the faulty modem and cancel the connection.
When you cancel a linked service contract, you are entitled to a refund or can refuse to pay for any services that you have not yet received.
The supplier does not have to give a refund for any services you received up to the time you rejected the goods.
A consumer subscribes to 12 editions of a cooking magazine for $200, including $80 for delivery. She receives only three editions in six months, so cancels the subscription and delivery. The supplier must refund $150 for nine magazines not received, that is, $90 for the magazines and $60 for delivery.
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