Cancelling a Contract

January 27, 2011

Which contracts can a consumer cancel under the Consumer Protection Act of 2002. The four most common are:

1.Direct Agreements – contracts that are signed away from the place of business of the seller.

2.Internet Agreements – contracts that are entered into on the Internet – for example, a website where consumers place orders online.

3.Remote Agreements – contracts that are entered into when a business and the consumer are not present together – for example, by phone, fax or mail orders

4.Future Performance Agreements – the future performance refers to the seller. Contracts for services including gym memberships where delivery, performance or payment in full is not made when the consumer enters into the agreement.

You have 10 days to cancel a contract, normally referred to as the 10 day cooling off period. You will have to be able to prove that you cancelled the contract in the appropriate time period – proof by registered mail, fax or an e-mail receipt are best. If by fax make sure you print out the proof showing it was received, or if by e-mail make sure you ask for proof that it has been received.

You cannot sign away your consumer rights and no one can take them away from you. Phrases in the contract that state you cannot use the Consumer Protection Act to cancel a contract, which you have been required to sign, are not valid.

You can cancel a contract if goods or services are not provided within 30 days of the date promised.

The final contract cannot be more that 10 percent higher than the original estimate unless you agree to the price increase verbally or in writing. This occurs most often when a customer asks for changes or additions to the original contract.