Terminating a service contract
Sometimes a service you receive falls short of what you agreed with the business or what you would normally expect.
If something has gone wrong that the business or trader is unable or unwilling to fix, there are a few remedies available to you, including terminating the contract.
Terminating a contract if a service is not provided
The service must be provided as agreed between you and the business. This includes any agreement you made about when the service should be provided.
If the service is not provided during that time, business or trader to let them know and, in most cases, give them further time to provide the service.
When you contact the business, do so in writing, or at least keep a written record of your contact if you talk to them in person or over the phone. If you are giving more time to provide a service, it should be reasonable under the circumstances.
If the additional period passes and you still have not received the service, you can terminate the service contract. You must tell the business or trader in writing that you are terminating the contract. Once you do so, the business must refund any payment you have made ‘without undue delay’ – at most no more than 14 days after you contact them.
Example
You have arranged for flooring to be fitted on 2 April, as you have family visiting in the middle of the month. The fitters do not show up on that date, so you request that the installation be completed by 10 April. The fitters still do not complete the work by the later date, so you contact terminate the contract and request a refund of the deposit you have paid.
Terminating a contract if a service is partially or poorly provided
If there is a problem with a service, always contact the business or trader to try to fix the problem first. In most cases, you can resolve problems related to the quality of a service without needing to terminate the contract.
The business should try to fix whatever is wrong with the service free of charge, within a reasonable time and without significant inconvenience to you.
Example
You have paid for your car to get a paint touch-up to cover a scratch on a side door. Two weeks later, you notice that the scratch is showing through as it seems to have been covered only with wax. You contact the garage and agree that they will touch up the paint at no extra cost within the next week.
You can terminate the contract if the issue is serious and cannot be fixed, for example:
- the business or trader lacks the skills needed to provide the service
- it is impossible to provide the service as agreed
- the trader is unwilling to resolve the issue within a reasonable time and without significant inconvenience to you
- the service, or any materials used, are unsafe.
Example
You paid to have your washing machine repaired but notice during the next wash that it still doesn’t automatically spin at the end of the cycle. When you call the trader who repaired the machine, they say that they cannot send someone else to look at it for another three weeks. It’s too inconvenient to wait this long, so you ask to terminate the contract and get a refund of the repair fee.
If the trader can’t or won’t resolve the problem, but the issue is minor, you can request a proportionate reduction in price or partial refund.
Immediate termination
In some situations, you can terminate a service contract immediately, without accepting another solution.
This applies where the issue is serious enough to severely impact your ability to use the service, especially, for example, if the poor quality or inadequate service – or any materials used in the service – would be considered unsafe.
Example
You move into your new home at the top of a hill and arrange for a waste disposal company to collect your bins. At first the bin company collects them as scheduled, but then it stops. When you contact the company, they tell you the driver feels it’s unsafe to drive the truck to your home when the roads are slippery. Because this decision severely affects your ability to use the waste collection service, you terminate your contract and request a refund of your quarterly service fee.
Terminating an ongoing service
Ongoing services include things like gym memberships, TV contracts, electricity supply and other utilities. Usually, you sign up for these ongoing services for a fixed period, such as 12 or 24 months.
You can exit a contract for an ongoing service early if you have told the company about repeated and noticeable interruptions and it can’t or won’t restore the service to the expected or agreed standard.
Example
A few months after entering a 24-month contract for TV services, you start seeing an error message on your TV screen every couple of weeks. The issue persists even after the TV service provider gives you a new set-top box, and, later, sends out an engineer to fix it. Because you have not been able to enjoy an acceptable standard of TV service consistently, you contact the provider with a detailed record of the unsuccessful efforts to restore the service and ask to be released from your contract.
Other options for repeated, and noticeable, interruptions in service are to withhold payment until the business restores the service or request proportionate reduction in the price of the service based on its reduced value during the interruptions.
Terminating a contract due to a change of mind
Your legal right to terminate a service contract because you changed your mind only applies where you have ordered a service online or on your doorstep. In these limited situations, consumer law allows a ‘cooling off period’ during which you can change your mind about the service and end the contract.
If you wish to cancel any other service contract due to a change of mind, you will need to check the terms and conditions of the contract and contact the business about its cancellation policies. For example, you may have to pay a penalty if you exit early from certain fixed-term contracts, such as for gym membership or a TV service.
