Distance selling regulations and the right to cancel

The right of consumers to cancel a distance selling contract, for no reason, is at the same time both an important piece of protection for consumers and a major disincentive for any business to sell goods or services on-line (or by other distance means). It also seems to be widely ignored, along with the requirements in the distance selling regulations to disclose important information about the business. So, having dealt with disclosure requirements in one posting, I now offer a summary of the cancellation right. This is not legal advice - just information about what the law says - so consult a lwyer if you need advice about how to comply.

The right to cancel is the key consumer protection element of the regulations. The right arises at any time during cancellation period, so the important matter is to know when the cancellation period runs. This is a complicated matter. Notification of cancellation must be given to supplier in writing. If the consumer cancels, the contract is treated as if it had never been entered into by the consumer.

The cancellation period in begins with the day on which contract is concluded, and ends at different times depending on whether the contract is for goods or services and when written confirmation and the requisite additional information was given.

In the case of goods:

• Where written notice and additional information given before or at time of delivery, 7 working days from day after delivery
• Where given after delivery but within three months after day after delivery, 7 working days after day information given
• Where not given within that three months, three months and seven working days after day on which delivered

In the case of services:

• Where written notice and additional information given before or at time of delivery, 7 working days from day after delivery
• Where given after delivery but within three months after day after delivery, 7 working days after day information given
• If supplier has customer’s consent to begin performance before 7 days expires:
• If information provided before performance starts, period ends when performance starts
• If provided during performance of contract, ends 7 days after information provided or when performance completed
• If information not provided within 3 months, period is 3 months 7 days from day after conclusion of contract
  

The right to cancel does not arise at all in the following cases:

• Provision of services begun with consumer’s consent
• Goods or services price of which fluctuates out of control of supplier
• Goods inherently non-returnable (e.g. personalised) or likely to deteriorate
• Recordings or software unsealed by consumer
• Newspapers, periodicals, magazines
• Gaming and lottery services
  

The full price including delivery charges must be refunded within 30 days after cancellation. If advance notice given, the trader may deduct cost of recovering goods from consumer. The supplier must bear cost of return of substitute goods (where contract permits substitution).

The consumer has a duty to return the goods if she has taken possession of them. She must take reasonable care of them in the meantime. Delay in returning the goods does not justify delaying giving a refund.

The duty to take care continues if goods not returned when requested. If no request is made to return them within 21 days of cancellation, the duty of care ceases at the end of the 21 day period.

Supplier must perform the contract within 30 days from when the order was sent (unless otherwise agreed). If it is impossible to do so, the trader must inform the consumer and repay money – but they can agree a revised date for delivery.

If the contract is not performed within 30 days (and there is no agreement for it to take longer) it is treated as if consumer never made it – but the consumer still has remedies for non-performance.

If more than 30 days is needed to complete the contract, the contract terms must state that this is the case.