Skip to main content

Disclaimer: Educational purposes only. Not legal advice. Consult a qualified NZ legal practitioner for your specific circumstances.

SimplifiedLaw.co.nz
consumer

The 5-day cooling-off period for door-to-door sales

Key Takeaway

In New Zealand, consumers have a 5-working-day cooling-off period to cancel an 'uninvited direct sale' agreement, such as door-to-door sales. This right, provided by the Fair Trading Act 1986, requires sellers to inform buyers of their cancellation rights. The Consumer Guarantees Act 1993 ensures quality of goods/services, but does not establish the cooling-off period.

Understanding the Cooling-Off Period for Uninvited Direct Sales

In New Zealand, specific protections exist for consumers who enter into agreements for goods or services through 'uninvited direct sales', commonly known as door-to-door sales. A key protection is a 5-working-day cooling-off period during which the agreement can be cancelled. These provisions are primarily established under the Fair Trading Act 1986.

What is an 'Uninvited Direct Sale'?

An 'uninvited direct sale' is an agreement for the supply of goods or services to a consumer that is made in specific circumstances where the consumer has not invited the seller to their home or workplace. These circumstances include agreements made:

  • During an uninvited visit by a seller to the consumer's home or workplace [Source: Fair Trading Act 1986, s 36L(1)(a)].
  • During an uninvited telephone call from a seller to the consumer [Source: Fair Trading Act 1986, s 36L(1)(b)].
  • At a place other than the seller's business premises (for example, a show or exhibition) where the consumer attended as a result of an uninvited invitation or approach [Source: Fair Trading Act 1986, s 36L(1)(c)].
  • As a result of an uninvited invitation or approach from a seller, even if the agreement itself is concluded at the seller's business premises or online, within a certain period [Source: Fair Trading Act 1986, s 36L(1)(d)].

Certain types of sales are excluded from being 'uninvited direct sales', such as sales of goods worth less than $100, or sales made at public auctions [Source: Fair Trading Act 1986, s 36L(2)].

The 5-Working Day Cooling-Off Period

Consumers have a statutory right to cancel an uninvited direct sale agreement within a specific timeframe. This is known as a 'cooling-off period'. The consumer may cancel the agreement by giving notice to the supplier at any time during the period of 5 working days [Source: Fair Trading Act 1986, s 36M(1)]. A 'working day' refers to any day of the week other than a Saturday, Sunday, Waitangi Day, Good Friday, Easter Monday, Anzac Day, the Sovereign's Birthday, Labour Day, and any day observed as a provincial anniversary [Source: Legislation Act 2019, s 9].

The 5-working-day period begins on the first working day after the day on which the agreement was made [Source: Fair Trading Act 1986, s 36M(2)].

Exercising the Right to Cancel

To cancel an uninvited direct sale agreement, the consumer must give notice of the cancellation to the supplier [Source: Fair Trading Act 1986, s 36N(1)]. This notice must be given in writing and may be delivered in person, sent by post, fax, or email [Source: Fair Trading Act 1986, s 36N(2)]. The cancellation takes effect at the time the notice is given [Source: Fair Trading Act 1986, s 36N(3)].

Seller's Disclosure Obligations

Suppliers entering into an uninvited direct sale agreement have specific obligations regarding the disclosure of the consumer's cancellation rights. The agreement must clearly and legibly state the consumer's right to cancel the agreement and how to exercise that right [Source: Fair Trading Act 1986, s 36O(1)]. The supplier must also provide the consumer with a written notice of cancellation in a form approved by regulations [Source: Fair Trading Act 1986, s 36O(2)]. This notice must be easily detachable and contain specified information, including the supplier's contact details and instructions on how to cancel [Source: Fair Trading Act 1986, s 36O(3), (4)].

Effects of Cancellation

When an uninvited direct sale agreement is cancelled:

  • The agreement is treated as if it had never been made [Source: Fair Trading Act 1986, s 36P(1)(a)].
  • The supplier must immediately refund any money paid by the consumer under the agreement [Source: Fair Trading Act 1986, s 36P(1)(b)].
  • Any related guarantee or security given by the consumer is also cancelled [Source: Fair Trading Act 1986, s 36P(1)(c)].

If goods were supplied under the agreement, the consumer must make the goods available for collection by the supplier at the address where they were delivered or arrange for their return [Source: Fair Trading Act 1986, s 36Q(1), (2)]. The consumer must take reasonable care of the goods before returning them [Source: Fair Trading Act 1986, s 36Q(3)].

If services were supplied, the consumer is generally not liable to pay for any services performed before the cancellation [Source: Fair Trading Act 1986, s 36R(1)]. However, there are limited exceptions where payment may be required for services performed with the consumer's express request and acknowledgement of liability, if the services cannot reasonably be returned [Source: Fair Trading Act 1986, s 36R(2)].

What if the Seller Doesn't Comply?

If a supplier fails to comply with certain provisions relating to uninvited direct sales, particularly those concerning the disclosure of cancellation rights and the provision of a cancellation notice, the agreement may be unenforceable against the consumer [Source: Fair Trading Act 1986, s 36S(1)]. Furthermore, non-compliance with these provisions can constitute a breach of the Fair Trading Act 1986, which may lead to enforcement action by the Commerce Commission [Source: Fair Trading Act 1986, s 40, s 40A].

The Role of the Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) provides fundamental consumer guarantees for goods and services supplied to consumers in New Zealand. While the CGA does not establish the 5-working-day cooling-off period for uninvited direct sales – that is covered by the Fair Trading Act 1986 – it is still relevant in the broader context of such sales. If an uninvited direct sale agreement proceeds and is not cancelled, the goods or services supplied under that agreement must meet the guarantees set out in the CGA. These guarantees include that goods must be of acceptable quality, fit for a particular purpose, and match their description [Source: Consumer Guarantees Act 1993, s 6, s 7, s 8]. Similarly, services must be carried out with reasonable care and skill, be fit for a particular purpose, and be completed within a reasonable time and at a reasonable price [Source: Consumer Guarantees Act 1993, s 28, s 29, s 30, s 31]. If these guarantees are not met, consumers have remedies under the CGA, even if the cooling-off period has passed.

When to Seek Independent Legal Advice

Navigating the specific requirements and remedies under the Fair Trading Act 1986 and Consumer Guarantees Act 1993 can be complex. If there are questions about whether an agreement qualifies as an uninvited direct sale, how to properly cancel an agreement, what to do if a seller does not comply, or to understand specific rights and obligations under consumer law, it is advisable to seek independent legal advice. Information and assistance can be obtained from official bodies like the Commerce Commission, Consumer Protection, or Community Law Centres which provide free legal advice.

Key Resources