Cancelling or breaking a contract
You can sometimes get out of a contract, whether it’s in writing or not. But not always. Let’s look at some common situations and how you can take action.
What you should know
If the other side doesn’t do what they promised (like sell you a bike that works), or if you don’t deliver as promised (you don’t show up to teach the music lesson), that’s a breach of contract.
In this situation, a handful of solutions are available. The law calls these remedies.
Let’s say you bought that bike. On your first long ride, the frame breaks. The law offers these potential solutions:
The contract is cancelled. Return the bike and get a refund.
You’re awarded compensation. The seller must repair or replace the bike — and if you broke your leg when the frame broke, you may be entitled to compensation for that too.
The seller is ordered to perform the contract. In other words, they have to provide you with a working bike.
If what went wrong was essential to the purchase (that broken frame), you’re entitled to cancel the contract. If it wasn’t essential (a squeaky wheel), you’re likely entitled to a partial refund, but you can’t return the bike.
If a contract is cancelled, it’s as if it never happened. Both parties go back to where they started. (The seller gets the broken bike back, and you get your money back.)
If it isn’t cancelled, then the contract remains in place, but certain parts change. (You get a partial refund.)
Read on for the situations where you’re entitled to cancel or ask for compensation. Armed with this info, you’ll be able to negotiate confidently with the other party and (hopefully) avoid having to go to court.
The law requires a baseline level of quality for the things you buy. When you buy something, the product has to:
be fit for the purpose you bought it for
work and be undamaged (if it isn’t already used)
be durable for a reasonable period of time
match the description of the goods
If any of these conditions aren’t met, you’re entitled to cancel the contract. Act immediately if you want to do that. If you wait, it’s harder to prove the defect isn’t just normal wear and tear — especially if you used the item after discovering the problem.
If the item was damaged by regular use or by accident, you likely won’t be covered. And the law likely won’t help if you examined the goods beforehand and ought to have spotted the problem.
The other party can’t tell you something misleading or deceiving, or take advantage of you.
If the seller has lied about something essential (said they’d walk your dog for an hour, but only did it for 5 minutes) you may be entitled to a refund. If it’s non-essential (they said 24 kms per litre, but really it gets 18), you’re likely entitled to some compensation, but you can’t cancel the contract.
We’ve got more information on what is misleading or acting unfairly. See our info on the basics of making a purchase.
Otherwise, read on. There may be a “cooling-off” period in your contract where you can cancel regardless of the reason.
A cooling-off period means a stretch of time, after the purchase, when you can return a product or stop a service, no questions asked. You can cancel without giving a reason.
Not every purchase features a cooling-off period. It's available in some situations but not others. And the length of the cooling-off period varies depending on what you’re buying.
For example:
When you buy something in person, but not at the business location (like a door-to-door sale), you have a cooling-off period of 10 days after you receive a copy of the contract.
When you receive services on an ongoing basis (like a yoga or gym pass), you have a cooling-off period of 10 days after you receive a copy of the contract.
When signing a cellphone contract, you have a cooling-off period of 15 days after your cellphone service begins.
Two more examples:
When leasing a car, you have one full day after you sign to reconsider.
If you buy a newly built condo, you have a cooling-off period of seven days after you sign the contract or acknowledge seeing the developer’s disclosure statement, whichever comes last.
If you bought something from a retail store and have changed your mind, check the store’s policy on returns. It’s best to know this policy in advance, especially for a big purchase. Some larger items, or electronics, have a stricter return policy.
For services, some contracts allow you to cancel before the services are provided. Watch out for minimum timeframes — often you’ll need to give at least 24 hours’ notice.
Always keep your receipt! Often it has the return policy printed on it, and is the only real proof that you bought something. These days, retailers will offer to email you your receipt, which is a handy way to keep track.
Check the following:
How many days until the return period expires. If there’s no time limit, great!
Whether you can have used the product before returning it.
Whether there are any “restocking” or other charges.
Some stores offer a satisfaction guarantee. This is a great thing for consumers! It gives you the legal right to return the product for a full refund, even if what you bought is perfectly alright.
Always remember, as a consumer, you have rights. (And a duty to keep businesses honest!)
Sometimes there’s just a fundamental misunderstanding. In that case either one of you can ask to cancel under the legal principle of mistake (or the non-legal principle of “whoops”).
The mistake might involve:
who’s making the contract,
what’s in the contract, or
what the contract is about.
Let’s say Gavyn understood that he was buying a painting from Roland, but Roland understood that he was only renting Gavyn the painting for a special party at his house. Either Gavyn or Roland could ask for the contract to be cancelled because there was an important misunderstanding about what was being exchanged.
Mistakes like this are rare. If you understood some of the subject matter, then you probably can’t rely on this remedy.
A contract can be cancelled if someone threatens you. For example, if someone threatens you with physical harm unless you agree to sell your car to them, this is not a valid contract. You did not enter the agreement voluntarily.
You cannot enter into a contract if your mental state prevented you from understanding the result of your actions. For example, if you were completely drunk, under the influence of drugs, or suffering from severe depression, you could ask for the cancellation of any contracts you entered into while you were in that state.
If something beyond the control of a party prevents them from doing what they said they would, then they may be able to get out of it.
Let’s say you hired a moving company to deliver a piano to your house for a wedding reception. If a flash flood on the highway that afternoon prevented the moving company from delivering the piano, the flood would be considered an act of God which prevented them from carrying out their part of the agreement. And, you may still have to pay them for the piano delivery.
"Acts of God" are uncommon, and you can’t use this as an excuse if what happened was within your control (the gas station you normally fill up at was closed, and you couldn’t make the delivery on time).
Also, check the terms of the contract before you sign. Sometimes “act of God” is defined very broadly. Make sure to push back on this and try to get it reworded before you sign.
Take action
There are a handful of steps you should take if you want to cancel or break a contract.
Once you understand your legal rights and options, decide what outcome you’re after. Do you want to cancel the services before they’re delivered, or before you have to provide them? Do you want to refuse to pay for something that turned out to be sub-par?
Remember, you don’t need to go to court to cancel a contract — the parties can just agree to cancel it.
Collect copies of any documents, such as any contract, receipts, correspondence, advertising, or warranty.
Prepare notes. Include:
details of the problem, including when you first noticed it
anything the other party said that you relied on in making the purchase or contract
what outcome you’re seeking
Promises are one thing, but follow-up is key. The person may agree to do what you suggest, but confirm when they will do this. Ask them for their name so you can refer to the conversation later. Follow-up with a written note confirming what was agreed to.
If the person doesn’t agree to do what you suggest, ask who you can contact with a formal complaint. Get the address of that person. Make notes of your conversation. Date your notes.
It might be that both of you are happy to part ways and cancel the contract. If you both agree, regardless of the reasons, nobody has to perform their end of the bargain!
If discussing the situation with the other party doesn’t resolve the problem, the next step is to send a complaint letter to them. We’ve got a template to get you started. Here's our complaint template.
If a business wronged you, you can also take to social media to voice your concerns. Be accurate. Be truthful. You may end up getting what you want. Companies are eager to protect their reputations.
Who can help
Consider reaching out to these agencies for help if you run into issues with a contract.
Consumer Protection BC
Assistance relating to certain types of consumer problems and contracts in BC.
Better Business Bureau
Might not solve problems, but helps people find businesses they can trust.
Competition Bureau
Deals with complaints about false or misleading advertising.
Getting legal advice can help you decide on the best next step. Alternatively, you can try a self-help approach through the Civil Resolution Tribunal.
Lawyer Referral Service
Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
Access Pro Bono's Free Legal Advice
Volunteer lawyers provide 30 minutes of free legal advice to people with low or modest income.
Civil Resolution Tribunal
Resolve disputes of less than $5,000 (and some other types of disputes) online 24/7 and without the need for a lawyer.
This information from People’s Law School explains in a general way the law that applies in British Columbia, Canada. The information is not intended as legal advice. See our disclaimer.