Consumer Basics What is a contract? I bought something, but now I’ve changed my mind, can I cancel it? I’m under 18, can I sign a contract? What contracts can minors enter into?
When you buy something from a store or pay for a service, you are entering into a contract with the seller or service provider. Most of the time, you won’t even be signing anything, but that doesn’t mean you haven’t entered into a contract.
As a consumer, you may be protected to a certain extent by the law. This section lets you know about the legal basics of being a consumer.
A contract is made every time you buy something or pay for a service. It doesn’t matter whether you’re buying something from your local supermarket or calling up your plumber to fix the toilet; If they have provided you with something of value, and you have given them something of value (usually money) in exchange, then you have entered into a contract.
If one person breaks their side of the deal, usually the other person can force them to complete their end of the deal or pay for the value of any loss. Most consumer contracts are not written and don’t have to be written to be legal.
There are some situations where you’ll get a contract to sign, e.g. hire purchase contracts, door-to-door contracts, service contracts (e.g. a gym membership or mobile phone plan), guarantor contracts, contracts when buying expensive items (e.g. cars, property). Remember to read all contracts you sign very carefully before signing. Take a copy and keep it safe. Call us or your local community law centre for any advice before signing.
Normally, you’re not able to cancel a contract halfway through (for example, if you have changed your mind, your circumstances have changed, or you found better products elsewhere), unless you’re willing to keep up your side of the contract (for example pay the full amount anyway). However, you can usually, cancel a contract if the item breaches a guarantee under the Consumer Guarantees Act.
Some contracts have a termination clause which may allow you to end the contract if you meet the conditions written in the termination clause. Usually, that might mean you have to pay a cancellation fee. You can also try to negotiate with the seller and see if you can both come to an agreed outcome.
In some circumstances, you may also cancel if the contract was incorrect or the contract has not been kept to.
Contracts entered into by a minor (those aged under 18) generally can’t be enforced (aka they can’t force you to do what you had promised in the contract) unless the court or the Disputes Tribunal thinks the contract is fair and reasonable.
The court will take into account how the contract was made; the purpose of the contract; the age and financial situation of the minor; and all other relevant information before making a decision to either cancel or enforce the contract. It can, therefore, sometimes be hard for others to sign a contract with you.
Technically, you can enter into any contract- it just might be unenforceable (aka they might not be able to force you to do what you had promised in the contract), making it difficult for others to contract with you.
Contracts for life insurance signed by people 16 year and older, and employment and apprenticeship contracts signed by those aged under 18, can be enforced (aka they can force you to do what you had promised in the contract).
For all other contracts, the Court may say that the contract is unenforceable, decline to enforce, or cancel the contract if the terms and conditions of the contract are “unconscionable” (totally unreasonable) or harsh and oppressive e.g. if the payment or reward for your promise under the contract is so low that it would be totally unreasonable to hold you to it.