The Consumer Protection (Distance Selling) Regulations 2000 (the DSRs) contain an intricate set of rules concerning the cancellation, by consumers, of distance contracts for the supply of goods. A different set of rules concerns the cancellation of distance contracts for the supply of services. But nowhere in the Regulations is there any guidance on the cancellation of distance contracts for the supply of both goods and services.
For example, supposing you offer a lightbulb supply and fitting services. Customers pay a single fee via your website for both the bulb and the fitting. When does the right to cancel expire? Assuming all the necessary information has been supplied to the customer, then:
- under the rules on the cancellation of contracts for the supply of goods, the cancellation period will expire 7 working days beginning on the day after the day on which the consumer receives the lightbulbs;
- under the rules on the cancellation of contracts for services, the cancellation period will expire 7 working days beginning with the day after the day on which the contract is concluded, unless the fitting of the lightbulbs begins with the consumer’s agreement before the end of that period, in which case the right to cancel expires when fitting service begins.
The OFT guidance on distance selling recognises this problem, but provides a rather incomplete solution:
You need to assess whether there are two separate contracts or not, for example, one for goods (a mobile phone or modem) and the other for a service (such as the airtime or internet connection). If so, the contracts are treated separately. The relevant provisions of the DSRs should be applied to each of them.
In both cases, the cancellation period starts when the contract is made. It is possible to have cancellation periods running at different times, for example, the service contract may remain cancellable after the goods have been provided.
In this case, the customer may be entitled to cancel one element but not another.
Yes, in some cases there will be two contracts, but in other cases there will not. What then?
It seems to me that there are three main options.
First, you can artificially split the contract into two, and follow the OFT’s guidance.
Second, you can select the later of the two dates as the last date of the cancellation period, and either postpone service provision until the goods period has ended, or risk cancellation after you have provided services.
Third, you can select the earlier of the two dates as the last date of the cancellation period, and risk a customer compliant that you are not complying with the DSRs.
To my mind, none of these options are very attractive.
You might not want to spend to much time pondering the options, however, as the relevant law will change when the UK implements the Consumer Rights Directive. The new law should be in force on or before 13 June 2014.