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Can the agreement be cancelled?

information about cancelling a door to door contract.

Cooling-off

A cooling-off period is the amount of time a consumer has to change their mind and cancel an agreement. It is now called the 'termination period' in the Competition and Consumer Act 2010.

A 10-day minimum cooling-off period applies to all door-to-door contracts. Consumers may exercise their right to cancel the contract within 10-business days. The time starts from the day after the contract is signed by both parties. A cancellation can be made by letting the supplier know by phone, fax, email, letter or in person.

Note: If cancelling by phone, it is important to keep a written record of the call and exactly what was said.

The seller has to include a cancellation form at the time that the contract is signed, however the consumer does not have to use this form.

See What must be included in the sales contract?

Goods or services must not be supplied during the cooling-off period

The seller must not supply the goods or require payment to be made during the 10 day cooling-off period. The seller can be fined if they do not comply with this.

See s. 86Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

Exemption

The seller can deliver goods to a buyer before the cooling-off period has ended if the goods are valued at $500 or less.

See r. 95—Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

If goods supplied during the cooling-off period

If goods or services are supplied during this 10-business day cooling-off period the seller has no right to be paid. However the seller may claim damages if the buyer wilfully damaged the goods during the recovery period.

Recovery period

If the items sent are goods, the seller may come and collect (recover) the goods. The seller has 3 months to do this.

The recovery period is reduced to one month if the person who received the goods notifies the seller telling them where the goods are. The person who received the goods must not unreasonably refuse to allow the seller the opportunity to collect the goods.

After this period has expired, the goods belong to the person who received the goods.

See ss. 41, 86—Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

What happens to services that have been supplied

Whether a buyer can be required to pay for services after an agreement is terminated depends on the timing.

If services are supplied during the cooling-off period

If services are supplied the seller can not seek payment for the service.

See ss. 42, 86—Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

Services provided after the cooling-off period

If agreement for services is terminated after the 10-business day cooling-off period, the buyer may have to pay for any service that has already been provided.

See ss. 85(6)—Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

If the agreement is terminated during the cooling-off period

An agreement terminated during the cooling-off period is deemed to have been rescinded by mutual consent.

Any related agreement (like a guarantee, mortgage in favour of the seller etc.) is void unless it is a credit contract provided by a related credit provider who is linked to the supplier of the goods.

For details of linked credit providers see the code in National Consumer Credit Protection Act 2009 (Cth)—Schedule 1—National Credit Code(opens in a new window).

Buyer must get a refund

The seller must refund any part payment, or deposit that has been paid by the buyer if they terminate the agreement within the cooling off period.

What happens to the goods if the agreement is terminated during the cooling-off period?

If the buyer changes their mind during the 10-business day cooling-off period the buyer must:

  • return the goods (or any part of the goods not consumed) or
  • notify the seller about where the goods can be collected.

Goods not collected will belong to the buyer

If the seller does not collect the goods within 30 days of the termination of the agreement, the goods become the property of the buyer, even though the agreement has been terminated. The buyer does not have to pay any money in this situation.

If the buyer has damaged the goods

If the agreement is terminated after the 10-business day cooling-off period, and the goods have been damaged, the seller may take the buyer to court. The buyer will not be liable for any damage done that happened because of normal use of the goods or if the damage was beyond the control of the buyer.

See ss. 85(3),(4),(5)—Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

More information

Legislation

Competition and Consumer Act 2010 (Cth)

  • Volume 3, Schedule 2—The Australian Consumer Law
  • Part 3-2 Div 2—Unsolicited consumer agreements
  • s. 82(3)—when extended cooling-off periods are permitted
  • s. 86—no money must be required to be paid and no goods or services are to be delivered within the 10 day cooling-off period
  • s. 41—liability for unsolicited goods (what happens if goods are sent during the cooling-off period)
  • s. 42—liability for unsolicited services (what happens if services provided during the cooling-off period)
  • s. 83—effect of termination during cooling-off period
  • s. 85—what happens to goods or services if terminated during the cooling-off period
  • ss. 85(3), (4) & (5)—goods damaged after 10-business days.

See Competition and Consumer Act 2010 (Cth)—Schedule 2—The Australian Consumer Law(opens in a new window).

National Consumer Credit Protection Act 2009 (Cth)

  • Schedule 1—National Credit Code
    • s. 127(3)—tied loan contract
    • s. 127(2)—tied continuing credit contract

See Schedule 1—National Credit Code(opens in a new window).

Competition and Consumer Regulations 2010 (No. 2) (Cth)

  • r. 95—allows goods to be supplied within the cooling off period if they are valued at $500 or less

See Competition and Consumer Regulations 2010 (Cth)(opens in a new window).

Updated