Unsolicited consumer agreements

An unsolicited consumer agreement is when:

  • a supplier/salesperson approaches or telephones you without you inviting them, and
  • negotiations take place over the phone, or in person at a location other than the supplier’s premises, and
  • the total value of the agreement is more than $100, or the value was not agreed on.

If something goes wrong, it’s the businesses responsibility to prove that the agreement was not an unsolicited consumer agreement.

Examples of unsolicited consumer agreements

Situations that can lead to an unsolicited agreements are:

  • door-knocking households and offering to sell products or services, or inviting you to switch to a different service provider
  • calling and offering to sell products or services
  • approaching you in the common area of a shopping centre and offering to sell products or services
  • leaving a missed call message on an answering machine for you to respond.

The following situations may also be considered unsolicited approaches:

  • If you fill out an entry form to a competition that is sponsored by a supplier, and one of the conditions of entry is that you agree to be contacted by the supplier about new product information.
  • If you ask a supplier to provide a quote (such as measuring for blinds) and the supplier tries to enter into negotiations or later contacts you to negotiate a deal, then a resulting agreement would be considered an unsolicited consumer agreement. If a supplier leaves a quote with you for deliberation and then you approach them to accept the quote or negotiate different terms, then this would not be considered an unsolicited consumer agreement.

What is not an unsolicited consumer agreement?

Agreements that are not unsolicited consumer agreements do not offer consumers the same protection under the law and may not be covered by a cooling-off period.

The following kinds of agreements are not unsolicited consumer agreements:

  • Business contracts – where the supply of goods or services are not normally acquired for personal or household use.
  • Discontinued negotiations agreements – if an agreement made as a result of a consumer discontinuing negotiations for an unsolicited consumer agreement but at a later stage approaching the supplier to enter into such an agreement.
  • Agreements made in the course of a party plan event.
  • Renewable agreements of the same kind – where a consumer and supplier enter another agreement to continue the supply of the same kind of goods or services supplied under an existing agreement.
  • Subsequent agreements of the same kind – occur where goods and services are supplied under an agreement, and within three months of their supply, the consumer and supplier enter one or more other agreements for the supply of the same kind of goods and services, worth no more than $500.

Permitted hours for contacting consumers

Telemarketing

Telemarketing calls cannot be made:

  • weekdays – before 9 am or after 8 pm
  • Saturday – before 9 am or after 5 pm
  • on a Sunday or a public holiday.

This is regulated under the Do Not Call Register Act 2006 and associated telemarketing standards.

Calling on (not telephoning) consumers

A salesperson must not call on (which does not include telephone) you to negotiate a deal:

  • weekdays – before 9 am or after 6 pm
  • Saturday – before 9 am or after 5 pm
  • on Sunday or a public holiday.

A supplier or agent can visit at any time if an appointment has been made and accepted.

Requirements when calling on consumers (not telephone)

Suppliers who contacts you, other than by telephone, must meet the following requirements.

Disclose purpose and show identification

The salesperson must explain upfront the purpose of the visit and provide identification. The identification must include their name and the organisation they represent.

Cease to negotiate

A salesperson must explain that they are required to leave if you request. If they are asked to leave, they are not allowed to contact you for at least 30 days about the product or service they were selling during the visit. However, they can visit you again about the sale of goods by a different supplier.

Contact details

An agreement signed by a salesperson on the supplier’s behalf must state:

  • that the salesperson is acting on the supplier’s behalf
  • the salesperson’s full name
  • the salesperson’s business address (not a post box) or residential address and
  • the salesperson’s email address (if they have one).

General requirements

The agreement document

You must be given a written copy of the agreement:

  • as soon as it has been signed, for agreements made through face-to-face selling
  • within five business days (or longer if the consumer agrees), for agreements negotiated over the phone. Agreements can be provided in person, by post or electronically (if the consumer agrees).

The agreement document must:

  • include the text on the front page (which must be signed and dated by you):
    • Important Notice to the Consumer
    • You have a right to cancel this agreement within 10 business days from and including the day after you signed or received this agreement
    • Details about your additional rights to cancel this agreement are set out in the information attached to this agreement
  • be transparent – expressed in plain language, legible and clear
  • be printed – although any changes may be handwritten (and signed by both parties).

The agreement document must clearly state:

  • your cooling off rights (right of termination)
  • the full terms of the agreement
  • the total price payable, or how this will be calculated
  • any postal or delivery charges
  • the supplier’s name, address, ABN, ACN, e-mail fax.

Cooling-off and termination

You have 10 business days to reconsider an unsolicited consumer agreement, during this time, you can cancel the agreement without penalty. This is called the cooling-off period.

For agreements negotiated over the phone, the cooling-off period begins on the first business day after the consumer receives the agreement document. For agreements that have not been negotiated over the phone, the cooling off period begins on the first business day after the agreement was made.

During the 10 business day cooling-off period, supplier must not accept any payment or supply and goods or services relating to the agreement. Goods or services supplied during the cooling-off period are considered unsolicited supplies.

Salespeople must inform you of your cooling-off rights. The agreement document must have a notice that can be used to terminate the contract (cool-off). This notice must include the supplier’s details including:

  • name and business address (not a post box number)
  • Australian Business Number (ABN) or, if they have one, Australian Company Number (ACN)
  • fax number and email address, if they have these.

Waivers

It’s an offence for anyone to tell you to waive your cooling-off rights.

Provisions that are void

It’s unlawful to include or rely on provisions that exclude, limit, modify or restrict:

  • your right to terminate the agreement
  • the effect or operation of the ACL as it relates to unsolicited consumer agreements.

Extended cooling-off period

You can terminate an agreement up to 3 months after it is made (or the agreement documents are received if the agreement is by phone) if the salesperson:

  • visited outside of the permitted selling hours
  • did not disclose the purpose of the visit
  • did not produce identification or
  • did not leave the premises upon request.

The period is extended to 6 months if a salesperson:

  • did not provide information about the cooling off period or
  • was in breach of any of the requirements for unsolicited consumer agreements (such as failing to provide a written copy of the agreement, not including required information in the written agreement, or supplying goods or services during the cooling off period).

Terminating an agreement

You can terminate an agreement orally or in writing. The termination date is the date you sent or gave the notice.

If a consumer cools-off or terminates

Once you’ve given notice during the cooling off period (either orally or in writing) the agreement is void.  The notice is effective even if:

  • written notice has been given, but the supplier has not received it.
  • goods or services supplied have been wholly or partly consumed or used.

Related contracts

If you cancel an unsolicited consumer agreement, then any related contract or instrument is also void, which means it is also effectively cancelled. For example, a consumer agrees to buy a $900 washing machine from a door-to-door trader, and also signs a separate agreement for servicing the washing machine, costing $80. The second contract is not covered by the cooling off provisions. If the consumer cools off on the washing machine purchase then the service contract is also cancelled.

Supplier obligations

When you ‘cool-off’, the supplier must promptly return or refund to your money paid under the agreement or related contract.

A supplier cannot:

  • take action against you to recover any payments allegedly owed under the agreement
  • place, or threaten to place, your name on a list of defaulters or debtors.

What happens to the goods/services after a ‘cool-off’?

In regards to goods or services after a ‘cool-off’:

  • you must, within a reasonable time, return any goods that have not been consumed or tell the supplier where to collect them.
  • if you’ve not taken reasonable care of the goods, the supplier can ask for compensation for value loss.
  • you don’t have to pay compensation for normal use of the goods or circumstances beyond your control.
  • if the supplier does not collect the goods within 30 days, then you can keep them.
  • if the agreement is terminated after the cooling off period and a service has already been provided, you may have to pay for the service.

Supplier responsibility for failing to comply

A supplier cannot enforce an agreement if the supplier’s agent (salesperson) has breached the law on unsolicited consumer agreement. Both the supplier and salesperson may be liable for the breaches. Suppliers should ensure their sales agents and other representatives are fully aware of legal obligations when using unsolicited marketing approaches.

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