Getting to Know Your Lay-by rights

December 14, 2020

Lay-by can be a cheap and convenient way to budget but you should be aware of the pitfalls.

What is a layby sale?

The Sale of Goods Act 1979 defines lay-by sales as when;

(a) the goods are not to be delivered to the buyer until the purchase price or a specified partor proportion thereon is paid, whether or not any charge is expressed to be payable forstorage or delivery of the goods; and

(b) the whole or part of the purchase price-

  • (i) is to be paid by instalments (whether the number of instalments or theamounts of all or any of them is fixed by the contract or left at the option ofthe buyer) payable over a fixed or ascertainable period; or
  • (ii) is to be paid at the expiration of a fixed or ascertainable period with theoption, express or implied, for the buyer to make payments in respect of thepurchase price during that period.

The main features of a layby sale are:

  • it relates only to goods (not to services)
  • payment is made in instalments – a deposit maybe counted as an instalment
  •  you do not 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 the consumer 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.

What information must the seller give you?

 At the start of the lay-by

When you enter into a layby sales agreement, the seller must provide you with a written copyof the agreement.

The agreement must be in plain language, legible and clearly presented and must include;

  • a clear description of the goodsthe seller’s name, street address, phone number and email address (if any)
  • 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.

During the layby

You can request a written statement of your layby account at any time. The seller must provide this within 7 working days of receiving the request. Certain traders provide this statement free of charge however, traders can charge $0.25 as expense for the statement.

The statement must clearly set out all of the following:

(a) the purchase price; and

(b) the total amount of the money paid and the value of any other consideration provided by the buyer in respect of the layby sale; and

(c) the amount which the seller estimates to be the retail value of the goods at the time of the notice or of the cancellation of the layby sale, whichever is the sooner, indicating whether or not such value is the same as at the date of sale; and

(d) the amount which the seller estimates is sufficient to recoup him for selling costsin respect of the layby sale, and

(e) the balance estimated to be due to the seller or the buyer, as the case may be;and

(f) if there is a balance due to the seller, particulars of the time and manner withinwhich that balance is required to be paid.

Can You Cancel the Lay-by?

Yes. Either you or the seller can cancel the layby, but there are different rules depending onwho is cancelling it.

Section 67 of the Sales of Goods Act 1979 gives consumers the right to cancel a lay-by sale and carries that;

(1) The buyer may, at any time before the purchase price has been paid, cancel the layby sale by giving to the seller oral or written notice of his desire to cancel the sale.

(2) Where a layby sale is cancelled, the date of cancellation shall be the date on which the notice is given.

(3) The right of cancellation conferred on the buyer may be exercised notwithstanding the winding up or bankruptcy of the seller or the appointment of any person to act as the receiver or manager of the property of the seller.

What happens When you Cancel your Lay-by Agreement?

Section 68 of the Sales of Goods Act 1979 demarcates the rights of the seller and the buyer when a lay-by agreement is cancelled. Some of these rights are;

  • Where a layby sale is cancelled by the seller, other than by reason of a breach by the buyer which entitles the seller to cancel the sale, the buyer shall be entitled to a refund not less than the total amount of money paid plus the value of any other consideration provided by him.
  • Where the buyer under a layby sale has paid an initial deposit but has made no other payments at the time when the sale is cancelled, the amount that the seller shall been titled to recover shall not exceed the amount of the deposit.

Some Lay-By Tips

  • Obtain a lay-by statement with clear information on price of the goods, how much is paid and how much is owed with the timeframe within which you have to close the deal;
  • Look out for exclusionary notices – some unscrupulous traders place exclusionary notices such as “Once, on Lay-by, no change of mind and no refund”. Note that exclusionary clauses are illegal under Fiji’s consumer laws; and 
  • Get your refund upon cancellation – by virtue of the Sale of Goods Act, a buyer is entitled to a refund of the amount paid on a lay-by sale subject to reasonable deductions made by the seller for costs incurred in handling the lay-by sale (both, administration cost and loss of value).

If you would like to cancel you lay-by but have been denied any refund by the seller or face any other related issues, call the Consumer Council of Fiji toll-free number 155 or lodge a complaint using the Consumer Council of Fiji mobile app.