Buying goods on layby can be a convenient way to shop.
What is a layby sale?
The main features of a layby sale are:
it relates only to goods (not to services)
the purchase price of the goods is less than $30,000
payment is made in three or more instalments (or two instalments if the agreement specifies it is a layby) – a deposit is counted as an instalment
you don't take possession of the goods until all, or a specified amount, of the total price of the goods has been paid for
the agreement is between you and the supplier of the goods
the risk in the goods remains with the supplier until you have received them or until you have paid for them. So if the supplier lets you take the goods before you have paid in full and they are damaged the supplier is responsible.
If you purchase something and pay it in instalments, but fees (other than a cancellation fee) or interest are included, then as well as being a layby, this may also be a credit contract. Read more about buying goods on credit
What information must the seller give you?
At the start of the layby
When you enter into a layby sales agreement, the seller must provide you with a written copy of the agreement.
The agreement must be in plain language, legible and clearly presented. The front page must include:
a clear description of the goods
the seller’s name, street address, phone number and email address
a summary of your right to cancel the agreement
information about any cancellation fees that will be charged, including the amount of the fee (if it is a fixed fee) or a clear description of how the fee will be calculated.
The layby agreement must also include:
the total price payable
the date that the layby is entered into.
If the contract is also a credit contract the creditor might have to give you additional information.
During the layby
You can request a written statement of your layby account at any time. The seller must provide this free of charge within 5 working days of receiving the request.
The statement must clearly set out all of the following:
the total purchase price
the amount you have paid by the date of the statement
the amount of any cancellation charge applying at the date of the statement
any outstanding amount you owe, and when and how you need to pay it.
Can I cancel the agreement?
Yes. Either you or the seller can cancel the layby, but there are different rules depending on who is cancelling it.
You can cancel the layby at any time, for any reason, before you take possession of the goods.
If the goods were purchased as part of a door-to-door or telemarketing sale, you can cancel the agreement during the "cooling off" period – up to 5 working days after you received a copy of the contract. This applies even if you have taken possession of the goods. Read more about door-to-door sales.
If you do cancel the contract, you need to make sure that it is clear to the seller that this is what you want to do. We recommend that you do it in writing.
The seller can cancel the agreement only if:
you breach an important term of the agreement
due to circumstances beyond the seller’s control, the goods are no longer available and there is no satisfactory substitute
the seller has ceased trading and the goods do not form part of the assets of the seller’s bankruptcy, receivership, liquidation or voluntary administration.
Can a seller charge a cancellation fee?
Yes. But only if you have cancelled or breached the layby agreement, the agreement states that a cancellation fee can be charged, and the seller has not breached the agreement. The cancellation fee can't be for an amount more than the seller's reasonable cost arising directly from the layby agreement.
What happens if the agreement is cancelled?
The seller must refund all the money you have paid so far, less any cancellation fee. If you haven't paid enough money to cover the cancellation fee, the seller can recover the balance of this from you.