Tuesday, 2 June 2015

When a Contract Isn’t Binding: Cooling-Off Periods

Once you’ve signed a contract, you’re bound by it body and soul until death or even beyond – right? Well, not necessarily – at least not in Victoria, as consumers are entitled to a ‘cooling-off period’ (If only someone had told Faust about that one...!). Glenn Duker, solicitor and lawyer, takes a look at contract cooling-off periods in Victoria and what they can mean for consumers.
Glenn Duker
What is a cooling-off period?

A cooling-off period is a length of time within which you are entitled to change your mind after signing a contract. Though this concept pretty much flies in the face of contract law, it was introduced in Australia to protect the consumer. However, it does have conditions attached.

First, you need to notify the dealer that you have changed your mind within three clear business days (weekends and holidays are excluded from this count). You must notify the dealer in writing, and make sure you follow up on whether they received this from you before the cooling-off period is over. You also need to be aware that if you’ve paid a deposit, you are entitled to a refund – but the dealer may also be entitled to keep some of it.

You must also be purchasing the goods or services as a private consumer, not a commercial entity – there is no such protection in place for commercial purchases.

f you want to back out of your contract because the goods or services you want to purchase have been misrepresented by the business, you don’t even need to worry about the cooling-off period. If this is indeed found to be the case, your contract can be voided without penalty to you.

What types of goods and services have a cooling-off period?

You might be surprised at the range of sales that are covered by cooling-off periods; from the purchase of property and cars right through to mobile phone contracts.

If you would like further professional advice about contract law, feel free to contact Glenn Duker, lawyer and solicitor, for expert assistance.

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