Cancelling a supply / service
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A supplier must meet the consumer guarantees for providing services:
- with due care and skill;
- which are fit for any specified purpose; and
- within the time specified, or within a reasonable time (when no time is set). What is ‘reasonable’ will depend on the nature of the services.
If services fail to meet any of these consumer guarantees, a consumer can cancel the service and seek a ‘remedy’. This means they can ask you to repair or replace the service or provide a refund.
When the problem is minor, then you can choose between providing a repair or offering the consumer a refund. If you refuse to negotiate or take too long, the consumer can cancel the service and get a refund or get someone else to fix the problem and ask you to pay reasonable costs.
When there is a major failure, the consumer gets to decide on the remedy and whether they:
- cancel the services and get a refund;
- keep the contract and get compensation for the difference in value; or
- get someone else to fix the problem and ask you to pay reasonable costs.
What must a consumer do to cancel a service?
A contract for services is cancelled when the consumer tells you they intend to cancel the services – verbally, in writing or, if this is not possible, by any other means.
If there is a service contract, the consumer should refer to their contract for any cancellation conditions such as notice periods and termination fees.
What if the consumer changed their mind
You do not have to give a refund when a consumer simply changes their mind about the services. However, if you have an advertised policy to offer a refund or credit note when this happens, then you must abide by this policy.
When does cancellation take effect?
A service is cancelled when the consumer notifies the supplier they want to cancel the service.
Refunds for cancelled services
If a consumer cancels a pre-paid contract they may be able to seek a refund for the unused portion of the service. Where the trader has an advertised store policy to offer a refund or credit note, they must abide by this policy.
If there are no issues with the service then the consumer will have to pay the trader for services already provided and any termination fees agreed in the contract.
If the service fails to meet a consumer guarantee, the consumer may be entitled to a remedy - which is dependent on whether the failure is considered to be a major failure or a minor failure under the Australian Consumer Law.
Jo received a cut and perm on her hair. The cut is good but the perm has ‘fallen out’ after a day. Jo, having already paid for the cut and perm, should ask her hairdresser for a remedy. If her hairdresser is able to ‘fix’ the perm within a reasonable time, they can do so; but if the remedy cannot be provided in a reasonable time, Jo can ask for a refund. As there was no fault with the cut, it may be reasonable for Jo to pay for the cut but not for the perm, as another hairdresser will not need to cut her hair to fix the problem. If the perm had damaged the hair and Jo required a new cut, then the full service should be refunded and the hairdresser may need to pay for the damage to be repaired.
Goods connected with cancelled services
When a consumer cancels a contract for services that includes goods, they are also rejecting the goods. The consumer is entitled to a refund of any payment made for the goods.
To get a refund, the consumer must return the goods to the supplier. If this involves significant cost to the consumer, the supplier must collect the goods at their own expense.
It is recommended to record any agreements in writing so the service conditions are clear and to help avoid any disputes or misunderstandings.
If a dispute arises about the cancellation the matter can be referred to court. Call the Consumer Protection Advice Line for further assistance on 1300 304 054.
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