Doorstep Selling Regulations and Terms & Conditions October 2008

October 2008

Doorstep Sales and the 7 Day Cooling-Off Period

Traders must provide a clear written notice of the consumer's rights to the consumer. This notice must either form part of a written contract, or be provided as a separate notice where no written contract is used.

Products and services commonly sold on this basis include household wares; seasonal gifts; subscriptions to magazines; subscriptions to services such as broadband or satellite television; home utilities such as energy or water; home improvements such as windows, kitchens or conservatories; and maintenance services as offered by tradespeople such as plumbers, decorators and so forth.

In many cases, this form of selling is convenient and effective for both traders and consumers alike. Notwithstanding this, certain traders may take unfair advantage of their customers, intentionally or otherwise.

On 1st October 2008 The Cancellation of Contracts made in a Consumer's home or place of work etc Regulations (the "Doorstep Selling Regulations") came into force. These are designed to offer protection to consumers in doorstep sales transactions by granting them a statutory cancellation or "cooling off" period of seven calendar days, provided the value of goods or services purchased exceeds £35. The right to cancel applies regardless of the consumer's reasons for choosing to cancel. Prior to the 1st October 2008 such a cancellation period applied only where the trader's visit was unsolicited, i.e. a cold-call. Under the new Doorstep Selling Regulations, consumers enjoy the same rights irrespective of whether or not the trader's visit was invited.

Traders' Responsibilities

Traders must provide a clear written notice of the consumer's rights to the consumer. This notice must either form part of a written contract, or be provided as a separate notice where no written contract is used.

The seven day period begins when the consumer first receives notice of their right to cancel. This notice must be given when the contract is made.

It is essential to note that consumers receive protection whether they are informed of their rights or not. Failure of a trader to supply the required written notice under the Doorstep Selling Regulations results in that trader's inability to enforce the contract against the consumer and constitutes a criminal offence which can result in the trader being fined up to £5000.

Supplying Goods or Services within the Cooling Off Period

If either party wishes the trader to supply certain types of goods or render services within the seven day cooling off period, the consumer must give their consent to this in writing. Failure to do this may cause significant loss to the trader.

The following types of goods and services are of relevance here:
- The supply of newspapers, magazines and other periodicals.
- Advertising in any form.
- The supply of goods where the price of those goods varies according to market fluctuations which are outside of the trader's control.
- The supply of goods required in an emergency.
- The supply of goods made to a customer's specifications or those personalised in some way. This restriction also applies to services associated with the supply of such goods.
- The supply of perishable goods.
- The supply of consumable goods which were consumed prior to the cancellation of the contract.
- The supply of goods which became incorporated into land or a thing not included in the contract.
- The supply of funeral-related goods or services.
- The supply of any other services.

In such cases, provided the written consent has been given by the consumer as described above, the trader has the right to charge for services rendered and / or goods received.

A good example is the supply and fitting of a kitchen. The trader may supply units and appliances and fit those items into the customer's home. If, following consent from the customer, several units and a cooker are installed within the cooling off period and the customer subsequently cancels the contract within that period, the trader has the right to be paid for those units, the cooker and for their time and labour. Any goods that have not yet been installed may be returned to the trader and any monies paid for those goods refunded.

Continuing with the above example, if no express written permission had been provided by the customer to commence delivery and installation within the 7 day cooling off period, but the rest of the facts had remained the same, the trader would not be entitled to any payment for the installed units, the cooker or their time and labour.

In any other cases, that is, those which do not concern the types of goods specified above, consumers are not required to provide written consent to delivery within the cooling off period, nor are they required to pay for any goods so delivered if they exercise their right to cancel. Consumers may, however, be required to cover the costs of returning goods to the trader.

Cancellation

Written notice of cancellation is required of consumers. The contract or notice of the right to cancel must include a detachable form which constitutes the consumer's notice. The wording of this form is prescribed by the Doorstep Selling Regulations. Notwithstanding this, the consumer is free to send their notice electronically (e.g. email), supplying the same information required by the form.

Regardless of when this notice is received and read by the trader, provided it is served within the cooling off period, it will be valid. Notices sent by post or delivered personally are deemed served on the day they are sent; email notices are deemed served at the time of sending.

Credit Agreements

In cases where a consumer purchases goods or services and enters into a related credit agreement, any such agreement will be cancelled automatically upon the consumer's exercise of the right to cancel under the Doorstep Selling Regulations. Provided the agreement is not a cancellable agreement under the Consumer Credit Act 1974, any payments made by the consumer in relation to the credit agreement must be repaid unless otherwise stated in the Regulations. Further, the consumer must repay any credit and interest received. Beyond this, the credit agreement is cancelled. If the consumer has provided security of any kind, this must be returned.

If the trader is the creditor, it is their responsibility to take the appropriate action with respect to cancelling the credit agreement. If the creditor is a third party, the trader must inform that party immediately upon receipt of the cancellation notice from the consumer.

Where credit was to be repaid in instalments and the total borrowed is not repaid by the due date of the first instalment, the trader or creditor must take appropriate action to recover monies and interest due from the consumer.

Exceptions

There are certain categories of goods and services to which the Doorstep Selling Regulations do not apply. These are as follows:
- Mortgages or home purchase plans or home revision plans (where the contract is made during a solicited visit);
- Cancellable Agreements under the Consumer Credit Act 1974;
- Contracts for regulated consumer credit agreements under the Consumer Credit Act 1974 (where the contract is solicited);
- Construction, sale or rental of property;
- Insurance contracts;
- Food or drink supplied by regular roundsmen (e.g. milk);
- Any goods or services whose value is less than £35;
- Contracts relating to shares and investments;
- Catalogue orders where there is a notice showing the right to return goods or cancel the contract.

Compliance Made Simple!

Simply-docs is currently releasing a new series of Terms and Conditions of sale designed specifically for traders selling their wares and services on a doorstep basis. These new Trading Documents will be fully applicable to both transactions entered into resulting from solicited and unsolicited calls or visits. Multiple variants will be written, designed to cater for the various special circumstances detailed above.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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