Home selling protections triggered even where earlier negotiations took place on business premises

Lord Justice Jackson said that the seven-day 'cooling off' period provided by the Cancellation of Contracts in a Consumer's Home or Place of Work Regulations ('2008 Regulations') would apply regardless of where negotiations took place, provided that the contract was concluded in the consumer's home or place of work.

"A contract is not made until all the ingredients are present, in particular offer and acceptance, intention to create legal relations and consideration," he said in his judgment. "At that moment, and not before, the contract springs into existence. At that moment the parties become subject to all the common law and statutory incidents of the contractual relations into which they have entered."

The decision meant that Toby Robertson did not have to pay a cancellation charge to a removals company, owned by a Terrence Swift, when he obtained a cheaper quote from another country two days after signing a contract and paying a deposit.

Robertson had asked Swift for a quote for carrying out a removal. The two had orally agreed on a price when Swift had attended Robertson's home to survey the contents. He prepared and emailed a contract to Robertson, along with a standard set of terms and conditions which provided for a cancellation charge, when he returned to his office. Robertson signed the contract and paid the deposit that evening, when Swift visited his home to deliver some boxes.

The 2008 Regulations apply to all contracts where the total payment exceeds £35, which are concluded away from the trader's business premises. This could be the consumer's home or business premises, at another individual's home or on an excursion organised by the trader away from its business premises. They apply whether the visit was explicitly requested by the consumer, or whether the visit was unsolicited.

Under the regulations, consumers must be given a minimum period of seven calendar days to cancel a contract without penalty. Cancellation rights must be clearly and prominently displayed in any written contract, or provided in writing if there is no written contract. Consumers who agree to have work done or receive goods within the seven day cooling-off period must give their agreement in writing.

Lord Justice Jackson said that the reference to "a visit" in the regulations did not limit the contractual process to a single visit. If an offer was made in one visit and accepted during the second visit, it would be "bizarre" to suggest that this took the contract outside of the scope of the regulations, he said. In this case the contract was unenforceable because Swift did not provide Robertson with written notice of his right to cancel; however, even if he had done so Robertson would have been entitled to cancel the agreement without losing his deposit within the seven days provided for under the regulations.

However, the judge said that he had reached the decision "with regret" considering the circumstances of the case, as there was not much of a difference in bargaining power between the two men. However, it would be for the Government to decide whether removal contracts should be specifically excluded from the regulations following this case.

"For consumer protection regulations to apply in the circumstances of this case is, in my view, inappropriate," Lord Justice Jackson said. "Many removal firms are small businesses. They necessarily visit customers at home in order to assess the proposed work. It must often happen that the remove and the customer enter into an agreement at the customer's home."

Once the deal is done, the remover must incur costs in preparing for the move. He may also turn away other work during the relevant period. If the customer has seven days grace in which to cancel the contract, the remover is put in an impossible position," he said.

Commercial law expert Ian McKie of Pinsent Masons, the law firm behind Out-Law.com, said that the case was a "useful reminder" of the extensive protections available to consumers when contracting with businesses, "assuming that [consumers] are aware of those rights in the first place, which is often not the case".

"In this instance you might – unusually – have some sympathy for the service provider," he said. "The legislation was really intended to protect individuals against pressure selling techniques being applied within their own homes, whereas here there seems to be no indication of any untoward pressure being applied but the consumer was nevertheless able to rely on the protections in order to secure a better price from an alternative provider."

He added that the result was a "triumph for common sense" with regards to the Court's interpretation of the underlying legislation. "If there is more than one visit leading to the conclusion of a contract, then that will not take it outside of the scope of the Regulations," he said.