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When do you have a “right” to cancel your contract – and does that right to do so actually exist?
Well, as with anything, it depends on the circumstances and the type of contract.
If you’ve signed a contract to accept an offer of employment and subsequently change your mind you should provide notice as per the contract of employment. If you do not provide the sufficient notice the employer could potentially sue for breach of contract and claim for any loss that they suffered for the duration of the notice period which you did not work. But, what about a financial agreement? Perhaps you’ve switched energy suppliers or purchased a car on a lease agreement. Do you have any kind of legal right to cancel that contract once it is signed?
As a general rule of thumb, check the terms and conditions, but, if you entered into a contract over the phone, online or on your doorstep, you have 14 calendar days to cancel the contract under the Consumer Rights Regulations. This 14-day period begins the day after your services commence, or, effectively, when the contract comes into play. To cancel your contract you should write to the service provider by email or by letter clearly setting out our intention to cancel the contract.
Beyond that 14-day “cooling off” period, you will need to proceed with caution. Generally, if you cancel before the minimum contract is up, you will have to pay a termination fee. So, for example, if you purchase a mobile phone contract for 24 months, but you want to exit after one month, you may have to pay the remaining 23 months up front or a cancellation fee
However, if you have a good reason for doing so, you may find yourself the exception. For example, if that same mobile phone company increases their monthly price by more than the Retail Price Index (RPI), then you might be able to exit the contract without facing fees. A reason such as poor network coverage is unlikely to be deemed a good enough reason – but it is always best to check with the provider. Some other reasons to enable you to terminate your contract early might be the service provider’s failure to perform its obligations under the contract or where services have been misrepresented to you prior to you entering into the contract.
Finally, communication is key. If you are struggling to pay your bills, particularly due to an extreme change of circumstances such as redundancy or ill health, you should contact the service provider in the first instance so that you can talk through your options.
If you think you might have a dispute with someone you have entered into a contract with, or you would like some further advice relating to third party negligence or breach of contract, contact Downs Solicitors to see how we can help.