Paul Jackson explains how new regulations on the cancellation of contracts made in a consumer’s home affect the average contractor
The practice of doorstep selling is not something that members of our particular sector of the industry could often be accused of participating in.
Certainly, the offer of a free inspection of a domestic wiring installation, with the provision of a non-obligatory quotation ‘to correct any faults and to bring the installation to standard’ may be viewed in some quarters as sharp practice but, nonetheless, the electrical and mechanical community could never really be accused of succumbing to this aggressive form of sales technique.
Still, the government, following European Council Directive 85/577EEC, has decided to revoke the Cancellation of Contracts Concluded away from Business Premises Regulations 1987 and instead re-implement a broader set of regulations titled Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008.
This became law on 1 October.
What does this mean for the average electrical contractor when trading with the average householder? And what effect will it have on contractors who attend to an emergency call-out?
First, there is an implication that all agreements should be in writing. This would dispel a number of issues raised with the Commercial Contracts & Legal Department of the ECA about scope of the works, responsibilities and payment issues.
Second, it will mean that, even agreements executed orally will need to have the consumer’s new right of cancellation communicated in writing.
In addition, the traditional cooling-off period provided to consumers who contracted on their doorstep following an unsolicited visit is to be extended to all transactions, irrespective of whether they were solicited or not.
The term ‘solicited’ is an interesting one. In this context, what it means is that an agreement made after a telephone ‘cold call’ that results in a request for an inspection and quotation are just as regulated as those where the trader knocks on the door and offers to price and contract on the spot.
The regulations are detailed and make explicit reference to the unacceptability of any attempt to contract out or play any of the ‘it’s in the small print’ type of dodges commonly found in many trading terms and conditions.
It is not possible to summarise all 10 pages and four schedules of the regulations, but here are a few of the key points.
Officers, managers, secretaries and other members of staff may be prosecuted for failing to comply. The fines are not insubstantial – there is a ceiling of £5000 at current levels – and the scope of defence against a successful charge is extremely limited.
At the time of offer or contract, the trader has to advise in writing that the consumer has an automatic right to cancel the contract.
If he so chooses, he must do this in writing and within a seven-day period. Should the consumer waive his right to the mandatory cooling-off period, then provided the waiver and cancellation is made in the prescribed fashion, they will be bound to pay for any goods or services provided before the cancellation.
Any cancellation must be served in writing, although the regulations do state that an electronic communication is acceptable, as long as it contains the prescribed detail and is delivered in a timely fashion.
But works commenced in the cooling-off period after a verbal instruction are done at the trader’s risk.
What are the prescribed details? The notice must be headed ‘notice of the right to cancel’. It must be legible and contain sufficient reference numbers and identification marks to ensure that there can be no confusion as to exactly which contract is being cancelled.
The notice must be dated and provided in the form of a detachable slip. Terms must contain an advisory comment that cancellation must be in writing but that it need not be made using the pre-prepared form.
The regulations state that cancelled contracts shall be treated as if they had never been in existence.
The trader is protected by a provision that states:
“A request to start work within the seven-day notice period not provided in writing can be ignored, pending the conclusion of the cancellation period.”
Electrical and Mechanical Contractor
Paul Jackson is commercial adviser at the ECA