Problem: Hi. I could do with some advice if possible.
I am a builder and recently agreed a contract with a customer (husband and wife) to construct a small extension to the lounge. The contract was based on my company’s standard terms and conditions and I got both the husband and wife to sign the contract at their home, which means that there should be no argument regarding terms and conditions. At the same time, I also received a deposit, and we agreed the start date, being on the following Monday, 6 June 2022.
However, for no reason, the Sunday before the work was about to start, the husband said he wanted to cancel and have the deposit repaid. This left me and my workers with no work for 5 weeks. Please can you tell me where I stand on this?
Response: From your outline, I would strongly urge you to see a solicitor who will explain to you how consumer contracts work and to either amend your existing terms and conditions or draft new terms and conditions.
The reason for this is that your current terms and conditions are [probably] wanting in important areas and / or you are not fully aware of the various acts and regulations that regularise contracts with consumers (as well as in contracts with other businesses).
Although one of the most important acts that you must be aware of (in consumer contracts), is The Consumer Rights Act 2015, it is The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“Consumer Contracts Regulations”), that your matter centres around.
This is because, the Consumer Contracts Regulations gives the consumer key cancellation rights when they enter into contracts at a distance over the phone, online, from a catalogue or face-to-face with someone who has visited their home, for instance: the Consumer Contracts Regulations provides a cooling off period where goods and / or services are purchased online, over the phone or from a doorstep seller and the consumer has an automatic right to a 14-day cooling-off period in most circumstances.
In construction contracts, such a cooling off period would not apply where say the contract was sent by the builder to the customer and the customer then signed the contract at home and then sent the signed contract back to the builder. But if you take the contract to the customer’s home and the customer signs the contract there and then, the customer is entitled to a minimum 14-day cooling off period.
There are certain exceptions like, for example, goods that are specially made (ie, windows), or the customer has specially requested an earlier start date before the 14 days cooling off period has ended. However, the business must inform the customer of the right to cancel otherwise the cooling off period is extended by 14 days from the date when the customer is informed.
Your customers therefore had the right to a cooling off period and since they cancelled the contract within this period and you carried out no works, unfortunately you have no right to any compensation.
© Michael Gerard 2022
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.