Website Law

All online traders in the UK and wider EU should know about the right to cancel distance contracts available under the Distance Selling Directive.

This Directive was implemented in the UK by the Consumer Protection (Distance Selling) Regulations 2000 (the “Distance Selling Regulations”), which came into force on 31 October 2000.  The Regulations were subsequently amended by the Consumer Protection (Distance Selling) (Amendments) Regulations in 2005.

The Distance Selling Regulations apply to most contracts between suppliers and consumers made via a website for the supply of goods and services.  See Distance Selling Regulations: disclosures for the exceptions.

The rules dealing with a consumer’s right to cancel are covered by Regulations 10 to 13.

The right to cancel

Regulation 10 gives the consumer a right to cancel a distance contract, provided the consumer gives a notice of the cancellation in writing to the supplier within the cancellation period.  Once this notice is given, the contract is treated as if it had never been made. Hand delivery, postal delivery, facsimile or email are all acceptable modes of delivering a cancellation notice.

Informational requirements

Pursuant to Regulations 7 and 8, the supplier must “provide to the consumer in writing, or in another durable medium which is available and accessible to the consumer” certain information, which includes “the existence of a right of cancellation except in the cases referred to in Regulation 13” (referred to in this post as the “cancellation information”).

See Distance Selling Regulations: disclosures for full details of the cancellation information.

Factors affecting the length of the cancellation period

The length of the cancellation period is determined by:

whether and when the supplier provides the cancellation information; and
whether the contract is for the supply of goods or the supply of services.

Cancellation period in contracts for the supply of goods

“The cancellation period in case of contracts for the supply of goods begins with the day on which the contract is concluded” (Regulation 11(1)), and the end date depends upon the circumstances.

The cancellation information should be provided “(a) prior to the conclusion of the contract, or (b) thereafter, in good time and in any event … at the latest at the time of delivery where goods not for delivery to third parties are concerned” (Regulation 8(1)).

There are 3 main scenarios.

Scenario 1:

In scenario 1, where the supplier provides the cancellation information in time, then “the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the goods” (Regulation 11(2)).

So, where an e-commerce website has properly drafted T&Cs of sale and accordingly provides the proper information, the consumer will have a 7 working day cancellation period from the time of the delivery of the goods.

Scenario 2:

Scenario 2 covers the situation where the supplier fails to supply the cancellation information in good time (see above), but does provide the cancellation information “within the period of three months beginning with the day after the day on which the consumer receives the goods”.

In this case, “the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information” (Regulation 11(3)).

Scenario 3:

The last scenario applies where the supplier has not provided the consumer with the cancellation information at all.

In this case “the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the consumer receives the goods.” (Regulation 11(4)).

In other words, even if the consumer has not been advised about his or her right to cancel, the cancellation period expires after three months and 7 working days following the receipt of the goods.

Cancellation period in contracts for the supply of services

The applicable cancellation period for contracts for the supply of services is very similar to that for the supply of goods, and is governed by Regulation 12.

Here, the cancellation information should be provided “(a) prior to the conclusion of the contract, or (b) thereafter, in good time and in any event … during the performance of the contract…” (Regulation 8(1)).

The main difference in the calculation of the cancellation period in the case of a contract for services is that the cancellation period may come to an abrupt end if the provision of the services has commenced, or alternatively if the services have been completed.

Scenario 1

In scenario 1, where the supplier provides the cancellation information “on or before the day on which the contract is concluded … the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the contract is concluded” (Regulation 12(2)).

However, “unless the parties have agreed otherwise, the consumer will not have the right to cancel the contract by giving notice of cancellation … in respect of contracts … for the supply of services if the performance of the contract has begun with the the consumer’s agreement – before the end of the cancellation period referred to in Regulation 12(2); and after the supplier has provided … [the cancellation information]” (Regulation 13(1)(a)).

Scenario 2

In scenario 2, where the supplier provides the cancellation information to the consumer “within the period of three months beginning with the day after the day on which the contract is concluded, the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information.” (Regulation 12(3)).

Note that Regulation 13(1)(a) may also apply here, where performance of the contract begins after the provision of the cancellation information.

Alternatively, under Regulation 12(3A), “where the performance of the contract has begun with the consumer’s agreement before the expiry of the period of seven working days beginning with the day after the day on which the contract was concluded and the supplier has not … [supplied the cancellation information] … on or before the day on which performance began, but provides to the consumer … [the cancellation information] … in good time during the performance of the contract, the cancellation period ends - (a) on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information; or (b) if the performance of the contract is completed before the expiry of the period referred to in sub-paragraph (a), on the day when the performance of the contract is completed.”  This means that the consumer has a cancellation period of 7 working days from the time the consumer receives the cancellation information, unless the provision of the services has started with the agreement of the customer.  In that case, the cancellation period ends within 7 days of the consumer receiving the information, or when the contract has been performed.

Scenario 3

In scenario 3, where the supplier does not provide the consumer with the cancellation information at all, and the provision of the services has not yet begun, “the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the contract is concluded.” (Regulation 12(4)).

Other exceptions to the right to cancel

The exceptions to the right to cancel are governed by Regulation 13.  (Note that I have dealt with Regulation 13(1)(a) above, and so will ignore this provision for the purposes of this section.)

Under Regulation 13(1), “unless the parties have otherwise agreed”, the consumer will also not have the right to cancel “in respect of contracts:

(b) for the supply of goods or services the price of which is dependent on fluctuations in the financial market which cannot be controlled by the supplier;

(c) for the supply of goods made to the consumer’s specifications or clearly personalised or which by reason of their nature cannot be returned or are liable to deteriorate or expire rapidly;

(d) for the supply of audio or video recordings or computer software if they are unsealed by the consumer;

(e) for the supply of newspapers, periodicals or magazines; or

(f) for gaming, betting or lottery services.”

Other information

Where the right to cancel exists, the supplier must also advise the consumer, if the consumer needs to return the goods to the supplier (Regulation 8(2)(b)(i)), and who is to be responsible for the cost of returning the goods to the consumer (Regulation 8(2)(b)(ii)).