Q4. How should the ‘Cancellation Form’ be set out?
The cancellation form (for use by the consumer (if he so wishes) to cancel the contract) should be set out in the form below (and capitalised where indicated):
‘If you wish to cancel the contract you MUST DO SO IN WRITING and deliver personally or send (which may be by electronic mail) this to the person named below. You may use this form if you want to but you do not have to.
(Complete, detach and return this form ONLY IF YOU WISH TO CANCEL THE CONTRACT.)
To: _________________ [trader to insert name and address of person to whom notice may be given.]
I/We (delete as appropriate) hereby give notice that I/We (delete as appropriate) wish to cancel my/our (delete as appropriate) contract _________
[Trader to insert reference number, code or other details to enable the contract or offer to be identified]. He may also insert the name and address of the consumer.]
Signed
Name and Address
Date
Q5. How will businesses be protected against non payment for goods or services provided before the end of the cooling off period?
A consumer who has acquired possession of any goods or received any services by virtue of a contract
specified in Regulation 9 (see Q6) will be required to pay in accordance with the ‘reasonable’ requirements of the cancelled contract for goods or services provided up to the point of cancellation provided that:
• the trader included in the ‘notice of the right to cancel’ a statement that the consumer may be required to pay for the goods or services supplied if performance of the contract has begun before the end of the cooling-off period; and
• the consumer provided the trader with a written request for performance of the contract to begin before the end of the cooling off period.
A consumer who has acquired possession of goods by virtue of a contract -
not specified in Regulation 9 shall – on cancellation of the contract – be under a duty to restore those goods to the trader and meanwhile to retain possession of the goods and to take reasonable care of them.
Q6. What are the types of ‘specified’ contract listed in Regulation 9?
The types of ‘specified’ contract listed in Regulation 9 are those contracts for:
• the supply of goods to meet an emergency;
• the supply of goods or services relating to a funeral;
• the supply of services of any other kind;
• the supply of goods made to a customer’s specifications or clearly personalised;
• the supply of goods, which by their nature are consumed and before the cancellation, were so consumed;
• the supply of goods which, before the cancellation, had become incorporated in any land or thing not comprised in the cancelled contract;
• the supply of perishable goods;
• the supply of newspapers, periodicals or magazines;
• advertising in any medium; and
• the supply of goods the price of which is dependent on fluctuations in the financial market which cannot be controlled by the trader
Q7. What happens if the consumer fails to provide written agreement for a specified contract (listed in Regulation 9) to begin before the end of the cooling off period?
In the event that a consumer did
not provide written agreement for performance of a
specified contract listed in Regulation 9 (see Q6) to begin before the end of the cooling-off period then the trader would not be under any obligation to begin performance before the end of the cooling-off period.
However, in the event that a trader began performance of a specified contract (listed in Regulation 9) before the end of the cooling-off period, and the consumer had
not provided his
written agreement for performance of the
specified contract to begin before the end of the cooling-off period, the consumer would be able to cancel the contract and would
not be under any obligation to pay for goods and services provided up to the point of cancellation.
In these circumstances the trader would be commencing performance of the contract at his own risk (i.e. the risk of non payment). The onus would be on the trader to ensure that he had the written permission of the consumer before commencing work.
Q8. Is the consumer required to provide written agreement for performance of a contract not listed in Regulation 9 to begin before the end of the cooling off period?
No. There is
no requirement under these
Regulations for the consumer to provide written agreement to receive goods before the end of the cooling off period for the types of contract
not ‘specified’ in Regulation 9.
For these types of contract the consumer retains his cancellation rights and would be under a duty to restore any goods acquired before cancellation to the trader and meanwhile to retain possession of the goods and to take reasonable care of them.
Q9. Are mortgages or other home purchase plans or credit agreements covered by these Regulations?
The current cancellation regime under the Consumer Credit Act 1974 provides consumers with effective protection in the consumer credit market where agreements are negotiated face to face and signed away from the creditor’s business premises. We believe that duplicating cancellation provisions for consumer credit agreements under these regulations as well as under the Consumer Credit Act 1974 would generate a series of technical problems and would also potentially confuse consumers and business.
These Regulations do
not generally apply to cancellable agreements under the Consumer Credit Act 1974 or to
solicited contracts for regulated consumer credit agreements under that Act.
These Regulations do
not apply to mortgage, home purchase plans, or home revision plan regulated under the Financial Services and Markets Act 2000 - made as a result of a
solicited visit by a trader
Q10. What happens when a contract which has a related credit agreement attached is cancelled?
Where any contract for goods and services is cancelled under the Regulations, any related credit agreement is automatically cancelled. If the agreement was a cancellable agreement under the Consumer Credit Act 1984 the consequences of cancellation would flow as under that Act. In the case of any other regulated credit agreement, payment made by a consumer in relation to the credit agreement must be reimbursed unless otherwise provided in the Regulations. The consumer must repay credit and interest received in accordance with the related credit agreement but the agreement otherwise ceases to be enforceable. Any security provided under the related credit agreement must be immediately returned to the consumer.
Q11. What do you, as a trader, have to do when a contract which has a related credit agreement is cancelled?
A cancellation notice which cancels a contract for goods and services shall have the effect of cancelling any related credit agreement. The trader must (if he is not the same person as the creditor under that agreement) immediately on receipt of the cancellation notice inform the creditor that the notice has been given. The trader or creditor must take the appropriate steps to recover payment of credit and interest from the consumer if the whole of the credit repayable by instalments is not repaid before the date on which the first instalment is due.
Q12. What are the consequences for a trader who fails to comply with the Regulations?
Failure to provide a written ‘Notice of the Right to Cancel’ a contract - or to provide the information required - or failure to do so in accordance with the Regulations - would result in the trader being unable to enforce the contract against a consumer.
