Part 4: Consumer rights and disputes Rights of consumers to cancel contract for breach Section 263: Right to cancel for breach of implied term
This section provides a cancellation right for consumers for breaches of certain terms in relation to subscription contracts.
	Subsection (1) confers the right for a consumer to cancel a contract for a breach of an implied or statutory requirement as set out in section 262, paragraphs (a), (c), (d) and (e).
	Subsection (2) provides that, in the event of a breach by the trader, the consumer has cancellation rights.
	The breach could be a failure to comply with any part of the requirements outlined in section 262, paragraphs (a), (c), (d) or (e). For example:
failure by a trader to give the consumer notice reminding them before the end of a commitment period that the contract will automatically continue, and they will be charged payment unless they take action to end the contract;
failure to provide all of the prescribed information in the reminder notice (i.e. non-compliant reminder providing partial information);
obscuring the prescribed pre-contract information by including additional information with it which is not prescribed; or
failure to comply with the rules relating to timings for reminders.
	Subsection (3) provides that all a consumer must do to exercise this right is communicate their decision to cancel to the trader in accordance with subsection (4).
	Subsection (4) provides that the consumer may notify a trader that they wish to exercise their right to cancel under subsection (2) by making a clear statement setting out their decision. Even if the trader mandates a specific process for ending the contract in accordance with its terms e.g. that cancellation must be communicated through the trader’s website, cancellation following a breach of terms will be effective if the consumer makes a clear statement to that effect.
	Subsection (5) clarifies that the cancellation will take effect from the time the notification is given.
	Subsection (6), paragraph (a) provides that any rights and obligations under the contract that would have arisen no longer apply after it is cancelled.
	Subsection (6), paragraph (b) provides that following such cancellation, the consumer’s liability for previous payments will be extinguished, and the resulting rights to a refund will apply, to the extent provided for in regulations made under section 267 subsection (1) paragraph (b). Paragraph (c) provides that any other provision made under those regulations about the treatment of any products supplied under a cancelled subscription contract applies.
	Subsection (7) means that the trader cannot apply any penalties, or charges on the consumer for cancelling the contract under subsection (2).
	Subsection (8) refers to section 267, which gives the Secretary of State the power to make regulations about, inter alia, the exercise of the consumer’s right to cancel a contract including, for example, provisions requiring a cancellation right under this Chapter to be exercised before the end of a specified period (see the explanatory note relating to section 267).