How to get out of a contract that isn’t delivering - Martyn James

I’m currently filming the new season of BBC1 consumer show Rip Off Britain, which is a great excuse to meet up with my fellow broadcast experts and have a natter. In a gap between takes I was chatting to our legal expert, Gary Rycroft, about a few questions from viewers and readers. One subject that keeps coming up is about how to get out of contracts where businesses weren’t meeting their commitments.

These scenarios can involve anything from a gym membership where the pool has been closed for months to a dating site that’s put so many limitations on interacting with future partners it’s not worth the money.

Well, Gary and I have heard your pleas! Here’s our advice on bailing on a rubbish contract.

If you haven't been able to enjoy your regular gym swim because the pool has been closed awhile, you may be entitled to a membership fee refund (Picture: Adobe)

Your rights if a business doesn’t deliver

If you want to leave an ongoing contract, it makes sense to think about your ideal resolution.

Are you trying to leave the contract early without a penalty or do you want to get your money back for a service you paid for in advance?

Regardless of the end result, if you want to cancel a contract, you’ll need to establish why the firm hasn’t met its part of the deal.

Many of the legal protections that cover the goods and services we purchase come from the Consumer Rights Act 2015. This law sets out a range of circumstances under which you can cancel services if it turns out they are not as advertised.

If you can demonstrate a business is not delivering what it promised you could get some or all of your money back. However, once you edge past six months from the point of purchase, things get a little tricky.

The law also states that all new subscriptions and contracts have to be “actively” signed up to. This means a business can’t automatically opt you into a contract – you have to choose to sign up – and the contract needs to be fair and clear.

What if the services I’ve signed up for change significantly?

Sometimes unexpected events can spoil an agreement with a business. This became very clear over the pandemic, when lots of things we signed up for simply couldn’t be used, from holiday rentals to tennis lessons.

Under these circumstances, the legal principle of “Frustration of Contract” can help you. This applies where goods or services cannot be delivered for reasons that may not have been anticipated when the contract was agreed. This applies to both a single event – like hiring a wedding venue – or ongoing contracts like a gym membership.

Let’s say you have agreed to pay £840 a year for gym membership and the gym is closed for two months, you could be able to claim a £140 refund under Frustration of Contract. Alternatively, you may be able to pause or stop a regular subscription for the period facilities aren’t available, though you would have to start up again once things were sorted out.

Of course, if a key service that’s integral to the contract isn’t provided, then you can ask for a full refund or request that the contract is cancelled without a penalty fee.

What if the business wants to make deductions for ‘costs’?

If you decide to go down the Frustration of Contract route for a refund, the business may be entitled to ask for a small contribution to certain costs it incurs, but only if the original contract says this is permitted. So check the T&C’s you were given when you signed up.

For example, imagine you’ve paid for a static caravan in a holiday park for a year. If the park is flooded, you obviously can’t use the facilities. You might be able to get a refund for the period the park is closed, but the business can charge you for things like security and maintenance costs so the park is protected and maintained. These costs should be reasonable and you should be able to ask for a breakdown of deductions.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and columnist​