Cooling off period How to cancel a contract without being penalised

Cooling-off period: How to cancel a contract without being penalised

Linkilaw Legal Advice

Would you like to cancel a new contract but don’t want to be penalised? Know your rights to cancel within the cooling-off period.

A cooling-off period lets you cancel orders and contracts if you change your mind for any reason, usually within 14 days.

This can be really useful when you engage in a contract for your business but some days later you consider this is not the best option.

However, you must act fast to avoid penalty fines and be aware of the exemptions. Here’s how.

What’s a cooling-off period?

A cooling-off period is the period of time you have to change your mind about a good or service you’ve purchased somewhere away from the business’s premises

In simple terms, under the Consumer Contracts Regulations, if you entered into a contract online, over the phone, mail or even on your doorstep, you have 14 calendar days to cancel the contract.

This term often appears in the Terms & Conditions of contracts or websites of retailers and providers that offer goods or services you can purchase from a distance. The minimum legal time for a cooling-off period that a seller must offer you is 14 days (although make sure you check the T&Cs in case they’ve given you more time as many companies choose to do so).

When the 14-day cooling period starts depends on whether the contract (written or oral) is for goods or services:

  • For goods purchased at a distance, the 14-day cooling period starts from the date you take ownership of the goods. This means from the day your goods have been safely delivered to you or to the person/place you agreed to.
  • For services, the cooling-off period starts the day after you agree to go ahead with the service.

How to cancel a contract during a cooling-off period

The first step to cancel a contract is to write to your supplier within the cooling-off period to tell them you want to cancel.

You can do this by sending a letter, an email or over the phone. We recommend emailing them, especially if you’re close to the end of the 14-days period, as it is the easiest way you have a written record.

As long as you send your cancellation notice to your service provider before the end of the cooling-off period, it doesn’t matter when it’s received. But just in case problems arise, keep a copy of all letters and emails you send; or the notes of what was agreed and by whom if it was executed over the phone.

Some companies provide a cancellation form when you sign the contract which can make this process easier. Otherwise, you must be clear in your intention to cancel your contract – it is important to cite the relevant legislation in all your correspondence.

If the company refuses to let you cancel write again stating that you’re legally entitled to cancel within the cooling-off period and get at least some of your money back. If it continues to refuse, consider taking court action.

Cooling-off period exemptions

There are some exemptions where cooling-off periods don’t apply so make sure your contract doesn’t fall in any of these.

For goods, you won’t get a cooling-off period when you buy:

  • something that deteriorates quickly – like flowers or some food
  • an item that was personalised or custom-made for you
  • a CD, DVD or software, if you break the seal on the wrapping

For services, you also won’t get a cooling-off period for:

  • accommodation (eg a hotel room)
  • transport of goods (including courier services)
  • vehicle rental services
  • catering or leisure activities for specific dates (eg theatre tickets, catering for a wedding or party)
  • Urgent requests for repairing
  • Some financial products and services

Moreover, if you went into the business’s shop or premises to arrange the service you won’t get this cooling-off period.

Cooling-off periods don’t apply either for purchases or services bought from a private individual or for digital downloads such as music or software downloads – once the download starts you’ll lose your right to cancel.

If you need legal advice or need a hand with your contracts, book a call with our legal team and we’ll guide you through every stage of your business’ needs.

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