Entering into a contract

When you buy products or services from a trader, you are entering into a contract. Before you do, make sure you understand what you are agreeing to.

What is a contract?

A contract is an agreement made between two or more parties that is legally enforceable. Contracts can be written or verbal.

A contract arises when one party makes an offer and the other party communicates an intention to accept it.

You could be entering a contract by:

  • signing a document
  • selecting a product in a shop and paying for it at the check-out counter
  • clicking on an ‘I agree’ button on a web page.

It is unlawful for businesses to force or coerce you into entering a contract.

Terms and conditions

Contracts have terms and conditions which set out the rights and responsibilities of each party to the contract.

Make sure you read and understand the terms and conditions of a contract before you accept it. If you are unsure, seek legal advice.

While you may have the opportunity to negotiate before you agree, it is common for you to be offered the same or a similar contract as everyone else. This is known as a standard form contract. There are laws to protect you from unfair contract terms in standard form consumer contracts where you have little or no opportunity to negotiate with the trader.

Ending a contract

There are limited circumstances when consumers may end a contract without penalty and these can include:

  • if the business has misrepresented the goods, services, terms or conditions
  • if a cooling-off period applies.

A cooling-off period is a safeguard designed to give consumers the opportunity to change their minds about a purchase or agreement they have made. You have a right to a cooling-off period when you purchase goods or services through telemarketing or door-to-door sales.

More information

Unfair contract terms