Note: The following information is intended as a non-exhaustive guide only and isn’t intended to constitute legal or other professional advice. You should consult your legal advisers for advice on specific issues.
What’s it all about?
The Regulations apply only to distance contracts between suppliers and consumers.
A distance contract is a contract for the supply of goods or services where the parties don’t meet face-to-face before the contract is formed. Contracts formed by mail order or over the phone or Internet are distance contracts.
A supplier is an individual or company acting in a commercial or professional capacity. A consumer is an individual acting for purposes outside their business. The Regulations do not apply to contracts between companies or where both parties are acting in the course of their businesses or where both parties are acting outside the course of their businesses.
The Regulations impose disclosure requirements on suppliers and allow consumers to cancel distance contracts.
Note: These Regulations don’t apply to distance contracts for financial services, but the Financial Services (Distance Marketing) Regulations 2004 will apply.
What do I need to disclose?
Before a distance contract is formed, you must give the following information to the customer:
- your name and, where payment is in advance, your address
- a description of the goods or services
- the price, including taxes and delivery costs
- the arrangements for payment and delivery or performance
- the existence of the customer’s right to cancel (except where the customer doesn’t have a right to cancel - see below)
- the cost of using the means of distance communication where it is calculated other than at the basic rate (e.g. a premium rate telephone call)
- the period for which your offer is available
- if the goods or services are to be supplied over a period of time, the minimum duration of the contract
- if applicable, that you will supply substitute goods or services if those ordered aren’t available
This information doesn’t have to be in writing but must be given in a way “appropriate to the means of distance communication used”.
Before the services are completed or at the time the goods are delivered, you must give the following information to the customer in writing or other “durable medium” (which includes email):
- the information in paragraphs (1) to (5) above
- more detailed information about the conditions and procedures for cancellation, including how to return the goods
- your geographical address for complaints
- information about any after-sale services or guarantees you provide
Where possible, Royal Mail prefers to perform preliminary disclosure and follow-up disclosure at the same time by putting all the required information in writing, in an email or on a website before the contract is formed.
What happens if I don’t give a customer this information?
One consequence is that the length of time the customer has to cancel the contract will be extended (see below).
Persistent or serious non-compliance may lead to the OFT getting a court order against you that forces you to comply.
How can a customer cancel a distance contract?
A customer can cancel a distance contract immediately on notice to you as long as the notice is given within the applicable cancellation period (see below). A cancellation notice doesn’t have to use any particular words or be in any particular format but it must be in writing or other “durable form” (which includes email).
A customer can cancel a distance contract regardless of whether or not there’s anything wrong with the goods or services.
How long does a customer get to cancel?
For a contract for goods the customer generally has seven working days from the day after the customer receives the goods to cancel the contract (as long as you provide the follow-up disclosure information no later than the time of delivery).
For a contract for services, as long as you provide the follow-up disclosure information before the contract is agreed, the customer generally has seven working days from the day after the contract is formed to cancel the contract.
There are a couple of variations on that rule:
- if the customer: (i) agreed to the service starting before the end of the cancellation period; and (ii) the follow-up disclosure information was received in good time during performance of the service, the customer will have seven working days from the day after he/she receives the follow-up disclosure information
- if the customer: (i) agreed to the service starting before the end of the cancellation period; (ii) the follow-up disclosure information has been received in good time during performance of the service; and (iii) performance is completed within seven days of the customer having received that information, the customer's right to cancel will end on completion of performance.
Generally, if you delay follow-up disclosure the seven working days will only start to run from the day after follow up disclosure. In other words, the sooner you perform follow-up disclosure the sooner the cancellation period expires. But even if you never perform follow-up disclosure the cancellation period can’t be longer than three months and seven working days from the day after the goods are supplied or the contract for services is formed.
Are there any distance contracts that can’t be cancelled?
Yes. The cancellation right does not apply to a contract if:
- you have started to perform services under it with the customer’s consent, provided before starting services you told the customer that they would lose their right to cancel and gave him/her the follow-up disclosure information
- the price is dependent on fluctuations in the financial market that you can’t control
- it is for goods that were specifically designed according to the customer’s specifications, that by their nature can’t be returned or that are liable to deteriorate or expire rapidly
- it is for audio or video recordings or computer software and they have been unsealed by the customer
- it is for newspapers, periodicals or magazines
- it is for gaming, betting or lottery services.
What happens when a distance contract is cancelled?
Return of goods
The customer has to keep possession and take reasonable care of the goods pending their return to you.
It’s your responsibility to recover the goods from the customer unless there’s a term in the contract requiring the customer to return the goods to you. If there’s not, you have 21 days from when the contract was cancelled to notify the customer that you intend to collect the goods. If you don’t notify the customer within the 21 day period, the customer’s duty to take reasonable care of the goods ends. There’s no set time period within which you have to recover the goods, although you must do so within a reasonable time.
If the customer is responsible for returning the goods but doesn’t, you have six months from when the contract was cancelled to notify the customer that you intend to collect the goods. If you don’t notify the customer within the six month period, the customer’s duty to take reasonable care of the goods ends. Again, there’s no set time period within which you have to recover the goods, but you must do so within a reasonable time.
Refund of money
You must refund all money paid by the customer (including for delivery) within 30 days of cancellation. This applies even if the contract was for goods and you haven’t got them back yet.
You may only charge the customer for recovering goods where the contract states that the customer is responsible for returning them to you, and then only for the direct costs of recovering them. This doesn’t apply to goods you provide as substitutes for those ordered by the customer.
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