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Be aware the following information relates to consumer transactions that occurred before 1 January 2011. For information relating to transactions made after 1 January 2011 please refer to information relating to the Australian Consumer Law .
A lay-by is an agreement to purchase goods by paying for them by instalments.
When making a lay-by you should receive from the trader a copy of the written contract containing all the relevant terms and conditions. At the same time the trader must also give you:
a sales docket containing a detailed description of any goods purchased, the price of those goods, and any storage charges; and,
a copy of the Schedule to the Lay-by Sales Agreement Act 1963 (the Act) containing a summary of the rights of the purchaser under the provisions of the Act.
Once a lay-by sales agreement has been made, the trader must label the goods and set them aside. The trader must ensure the goods are stored in an appropriate place and manner to guarantee they are not damaged or spoiled while in storage.
The trader must have the goods in their possession at the time a lay-by sales agreement is made. Where goods are ordered in, and are subject to a lay-by sales agreement, the time for payment does not commence until you have actually inspected and approved of the goods.
The trader may request a deposit of not more than 20% of the total value of the goods prior to ordering the goods. The payment arrangements agreed to in these circumstances cannot begin until the day the purchaser inspects and approves of the goods.
You can cancel a lay-by at any time. You must give written notice to the trader, in line with terms and conditions. You are entitled to a refund of the money already paid less:
pro-rata storage feesas outlined in the lay-by sales agreement;
actual costs involved in having the lay-by; or,
any loss in value of the goods.
These fees and charges must be stated in the original lay-by contract. The trader cannot charge you for any other fee, for example a flat rate 'cancellation' fee of 10%.
The trader may terminate the lay-by agreement if you fail to keep up instalment payments. The trader must give you at least 14 days written notice of the cancellation at your last known address. The cancellation notice must contain:
a statement of the amount already paid;
the amount the purchaser must pay to obtain the goods; and,
the costs that will be incurred if the purchaser does not complete the agreement.
These costs are the same that can be imposed where you cancel the lay-by.
Once the trader cancels the lay-by, they must provide a refund of all moneys paid minus those set out when a consumer cancels the contract.
