Law guide: Complaints and disputes

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When sellers cancel agreements

When sellers cancel agreements

Force majeure clauses

Sometimes contracts or terms and conditions will contain something called a force majeure clause (though it won't necessarily be called this). This gives the sellers the right to say they're not liable if they fail to do something if it is the result of something that is outside of their control.

These types of clauses can be allowed, but only if they are deemed fair under the Consumer Rights Act.

The Competition & Markets Authority offers detailed guidance, under section 5, on which terms that limit the liability of the seller could be regarded as unfair.

For example, simply using the expression 'force majeure' would already be unfair if not fully explained as the meaning of that term is not general knowledge. It would be fairer to use a term such as 'events beyond our control'.

A clause limiting the seller's liability for a delay in delivery of goods or fulfilling a contract will have the best chance of being judged fair and enforceable if it:

  • limits liability only for those events that really are out of their control and that are unavoidably a direct cause for the delay or non-fulfilment;
  • requires them to take all reasonable steps to avoid any delay or non-fulfilment even when faced with an event outside their control; and
  • requires them to tell you as soon as possible of a delay or non-fulfilment that's expected due to an event outside their control and – if the delay is at risk of being substantial – allows you to cancel the contract with no financial penalty.

Sellers cancelling contracts

Some traders may cancel service contracts with consumers if they're unable to perform the services due to the events beyond their control. In this situation, less scrupulous traders might try to keep you to particularly onerous terms in your contract.

For example, in your contract with them you might have agreed to pay a non-refundable deposit; to make advance payments for services; or even to be liable to make full payment for the services if you cancel or if they have to cancel for reasons 'outside of their control'.

The fact that a term appears in a contract that you've signed doesn't mean that it would be enforceable in a court of law. A term in a consumer contract would only be enforceable if it doesn't breach your consumer rights and is fair under the Consumer Rights Act.

If a trader cancels a service, for whatever reason, you should get legal advice if they:

  • don't provide you with a similar suitable replacement service (or only do so after a substantial delay);
  • don't want to refund you what you have paid; or
  • try to get you to pay for the services they have not provided.

It's likely that you are entitled under such circumstances to get all the money back that you have paid.

Even if you're the one cancelling, the trader can't enforce any terms of your contract that aren't fair and can't necessarily keep you liable for payment of services you will not receive.

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