Contracts aren’t just for complicated things – we enter into contracts all the time, for example, when joining a gym, switching energy supplier, buying something from the internet, taking out a loan, or having a tradesperson fix a boiler.

Contracts can be written or verbal, but it’s always best to get a written contract if you can. And read the small print carefully before signing a contract – it could save you a lot of money and hassle later.

In most cases, once you’ve signed a contract, you’re bound by it, and you can’t change your mind. But, in some circumstances, the law gives you the right to cancel a contract.
If you change your mind about the order

Some types of contract are covered by cooling-off periods. This is a period during which you can cancel a contract without having to pay anything if you change your mind. The exact details vary depending on the type of contract.
If the contract was made at home

If you enter into a contract away from the trader’s premises, for example during a visit to your home, the ‘Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008′ give you a seven-day cooling-off period during which you can cancel.

There are some contracts these regulations don’t apply to:

* things worth less than £35
* perishable goods, such as food and drink
* land, insurance and investment agreements.

Where to go next

The Department for Business, Enterprise and Regulatory Reform has more information about the Doorstep Selling Regulations. If you think a salesperson has breached the regulations, contact your local Trading Standards Department (in England, Wales or Scotland) or the Department of Enterprise, Trade & Investment (in Northern Ireland).

If you have a problem with a contract for gas or electricity supply, contact your energy supplier in the first instance. Consumer Direct can also offer advice on problems relating to energy companies.See our Dealing with energy suppliers advice guide for more help.
If the contract wasn’t made in person

If you buy something over the phone or the internet, or by mail or fax order, the Distance Selling Regulations give you a cooling-off period of seven working days during which you can cancel the contract.

If you’re buying goods, the seven-day cooling-off period starts the day after receipt of the goods.

If you’re buying services, the cooling-off period starts the day after you agree to go ahead with the service. If you agree with the service provider that the service will start straight away, you waive these cooling-off rights.

The regulations don’t cover:

* financial services,
* holiday or travel arrangements,
* tailor-made items or perishable goods, such as groceries, or
* CDs, DVDs or software if you’ve broken the seal on the wrapping.

Where to go next

For more information about the Distance Selling Regulations read our online shopping report. If you think the Regulations have been breached, contact your local Trading Standards Department (in England, Wales or Scotland) or the Department of Enterprise, Trade & Investment (in Northern Ireland).
If the contract is for credit or hire purchase (HP)

Under the Consumer Credit Act 1974, contracts for loans, credit or HP must be signed by both you and the credit provider to be valid.

If the contract was signed away from the supplier’s business premises (at your home, for example), you have a five-day cooling-off period to cancel it. By law, the credit provider must tell you about your right to cancel. The five days start when you receive your notice of cancellation and a copy of the contract. If you sign a credit contract at the provider’s business premises, you don’t have this cooling-off period.

If you take out a credit agreement ‘at a distance’ (by phone or over the internet, for example), under the Financial Services (Distance Marketing) Regulations 2004 you have 14 days to cancel.
If there is a problem with the order

The law also protects you against poor service and shoddy goods by allowing you to cancel a contract.

Under the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, a seller must provide goods that are ‘fit for the purpose’, ‘as described’, and of ’satisfactory quality’.

If a supplier fails to fulfil its side of the contract, for example by not delivering goods that are of a satisfactory quality, you might be entitled to end the contract.

If you bought online, you can cancel at any time up to seven working days after goods are received and without having to give a reason.
Making time of the essence

However, if you didn’t buy online, or your cooling off period is over, you can only cancel a contract if you made ‘time of the essence’ (specified that you wanted the goods by a particular date, for example for someone’s birthday or Christmas).

You can also cancel if the seller doesn’t provide the goods or service within a ‘reasonable’ time. But sellers often don’t specify a time limit for delivery and defining what is ‘reasonable’ can be tricky.
If the terms of the contract are unfair

Under the Unfair Terms in Consumer Contracts Regulations companies must not include unfair terms in their contracts. Unfair terms are ones that are biased in favour of the supplier and cause detriment to the consumer, or try to take away some of your legal rights. If terms in a contract you’ve signed are deemed unfair by a judge, you may not be bound by those terms. But the rest of the contract will still stand.