Cooling off period clause: statutory and contractual versions

Sample clause

Written for a home services agreement between Northgate Cleaning and a residential customer signed at the customer's home after an uninvited sales visit, both fictional.

Cooling Off Period. (a) The Customer may cancel this agreement by oral or written notice given to the Supplier at any time before the end of the tenth business day after the day on which the Customer signs it (the Cooling Off Period). (b) A written notice under paragraph (a) may be given by email to the address in Item 2 of the Schedule, by post, or by handing it to the Supplier's representative. (c) If the Customer cancels under paragraph (a), this agreement is at an end, the Supplier must refund every amount the Customer has paid within 10 business days, and neither party owes the other anything further. (d) The Supplier must not begin the Services, and must not accept any payment, before the end of the Cooling Off Period. (e) This clause is in addition to the Customer's rights under the Australian Consumer Law to terminate an unsolicited consumer agreement, including any longer period that applies if those rules are not followed, and does not limit those rights.

Sample wording, not legal advice.

Variants

What to negotiate

• Whether a statutory right already applies

  This is the first question and it is not negotiable once answered. Unsolicited consumer agreements, certain property contracts and several financial products carry statutory cooling off rights that a contract cannot remove. Drafting a shorter contractual period over the top of a longer statutory one creates a document that misstates the customer's rights, which is a worse outcome than saying nothing.

• How the cancellation must be communicated

  Suppliers want written notice to a named address so the date is recorded. Customers want the method to be easy, because a right that is hard to exercise is worth less. The workable form is a nominated email address plus post, with the notice effective on receipt. Where a statutory right applies, the statutory method governs and the contract cannot narrow it.

• Whether work can start during the period

  Suppliers of urgent services want to begin immediately; the point of the period is that the customer has not committed yet. The usual compromise is that work starts only on a written request from the customer, and if the customer then cancels it pays for what was actually performed rather than a cancellation fee. Statutory regimes often restrict this more tightly.

• Refund timing

  A cooling off right with a slow refund is only half a right. Ten business days is a common and workable deadline, and stating it in the clause avoids the argument entirely. Suppliers sometimes ask for longer where payment came through a third party processor, which is reasonable if the longer period is stated rather than left open.

The risk of leaving it out

Where a statutory cooling off right applies, leaving it out of the document does not remove it, but it does leave customers unaware of a right they hold and leaves the supplier looking as though it concealed one. Where no statutory right applies, omitting a voluntary period simply means cancellations are handled case by case, which is slower and inconsistent.

Statutory periods in Australia and overseas

In Australia the clearest example sits in the Australian Consumer Law, Schedule 2 of the Competition and Consumer Act 2010, which gives a consumer 10 business days to terminate an unsolicited consumer agreement, the category covering door to door and telephone sales. The period starts the first business day after the consumer signs or receives the agreement, and it stretches to 3 months if the salesperson breaks the rules, for example by leaving out the required information. During the 10 days the supplier cannot provide services, other than electricity, gas or emergency repairs, or take payment. Residential property purchases carry their own cooling off periods set by each state and territory. In New South Wales a buyer has 5 business days after exchange and forfeits 0.25% of the price if they rescind; auction sales have none. In the United Kingdom the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 give a 14 day cancellation right for most distance and off premises consumer contracts. None of these rights depends on the contract mentioning them.

Contractual cooling off is a sales tool

Where no statutory right applies, a voluntary period does a different job: it lowers the cost of saying yes. A ten day window on a business to business subscription removes the pressure from a signing decision and rarely produces many cancellations, because the customer who was going to change their mind usually does so in the first week regardless. The drafting points are the same either way. Say when the period starts, since signing and delivery are different dates. Say how notice is given. Say what happens to money already paid and by when. Say whether work can begin during the period and what is payable if it does.

Why the sample gives 10 business days, not 5

The sample is a cleaning agreement signed in the customer's home after an uninvited visit, which makes it an unsolicited consumer agreement. A contractual period shorter than the statutory 10 business days would be ineffective to the extent it cut the right down, and printing it would tell the customer they had less time than the law gives them, which risks a misleading conduct problem on top. So the sample matches the statutory period, allows oral notice as the Australian Consumer Law does, and bars any start or payment during it. If the same supplier sold the service through its website to a customer who came to it, no statutory right would apply and a shorter voluntary period would be a legitimate choice.

Documents that carry this clause

Service agreement template with scope, service levels and an exitA service agreement template has to say what is supplied, how well, for what fee, who is liable for what, and how either side gets out. This one is filled in for Beacon Systems supporting Harlow Freight's IT for an initial 24 months from 1 October 2026 at $8,400 a month plus GST, with 40 hours included and $220 an hour beyond them. Twelve numbered clauses cover the services, a four level severity table, client duties, fees with a CPI adjustment, confidentiality, privacy, IP, a liability cap, termination and a three step dispute ladder under Victorian law.Vehicle sale agreement templateA dual cab ute is changing hands between two people on the Central Coast for $28,500. No dealer, so no statutory warranty and no guarantee of clear title. What the buyer gets instead is five written warranties, a register certificate number, and a mechanic's report obtained before the balance moves.Room rental agreement template for one room in a shared homeRenting a room is not the same as renting a house, and most templates copy a residential lease and hope. This one is written for one room with shared kitchen and bathroom, prices the bills split, lists the rules that matter, and says plainly that the occupant is a boarder or lodger and what that changes.

Questions people ask