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What are the rules on layby?

34 quoted answers, each with its source

The short answer

Lay-by is a sales arrangement in which a consumer pays for goods in instalments and does not receive the goods until the full price has been paid. A consumer can cancel a lay-by at any time before receiving or collecting the goods; a supplier may terminate only if the consumer breached the agreement, the supplier is no longer engaged in trade or commerce, or the products are no longer available. On termination the supplier must refund all payments made other than any termination charge, which must not be more than the supplier's reasonable costs, and except for that termination charge the supplier is not entitled to damages or any other remedy. Lay-by agreements must be in writing, transparent, legible, clearly presented, and in plain language, and businesses must provide a written copy setting out any terms and conditions including termination fees; as of 2026-07-11, the ACCC and Consumer Affairs Victoria conflict on the instalment threshold, with the ACCC stating two or more instalments and Consumer Affairs Victoria stating at least three unless the agreement is stated to be a lay-by, in which case two instalments suffice.

Every part of this comes from the quotes below. How we write these.

What the rules actually say23

Quoted straight from the ACCC, the Australian Consumer Law or a state consumer regulator.

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The ACCC states that a consumer can cancel a lay-by agreement at any time before they receive the products.

first-party
1 quote from 1 source
A consumer can cancel a lay-by agreement at any time before they receive the products.
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The ACCC states that…

  • businesses must provide consumers with a written copy of any layby agreement.
  • a written copy of a layby agreement must set out the terms and conditions of the layby agreement, including termination fees.
first-party
1 quote from 1 source
Businesses must provide consumers with a written copy of any lay-by agreement that sets out any terms and conditions including termination fees.
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The Australian Consumer Law defines a lay-by agreement by reference to terms providing that the goods will not be delivered to the consumer until the total price of the goods has been paid.

first-party
1 quote from 1 source
the goods will not be delivered to the consumer until the total price of the goods has been paid; and
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The Australian Consumer Law provides that a supplier is not entitled to…

  • damages in relation to the termination of a lay-by agreement except as the section provides.
  • enforce any other remedy in relation to the termination of a lay-by agreement except as the section provides.
first-party
1 quote from 1 source
the supplier is not entitled to damages, or to enforce any other remedy, in relation to that termination except as provided for by this section.
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The Australian Consumer Law entitles a supplier to recover any unpaid termination charge from the consumer as a debt.

first-party
1 quote from 1 source
The supplier is entitled to recover any unpaid termination charge from the consumer as a debt
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Consumer Affairs Victoria states that an agreement counts as a lay-by if the consumer pays for the products in at least three instalments where the agreement is not stated to be a lay-by agreement.

first-party
1 quote from 1 source
pays for the products in at least three instalments (when the agreement is not stated to be a ‘lay-by’ agreement) or in two instalments (when the agreement is called a ‘lay-by’ agreement), and
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Consumer Affairs Victoria states that a consumer does not receive the products under a lay-by until the full price has been paid.

first-party
1 quote from 1 source
does not receive the products until the full price has been paid.
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Consumer Affairs Victoria states that any deposit a consumer pays under a lay-by counts as an instalment.

first-party
1 quote from 1 source
Any deposit paid by the consumer is an instalment.
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Consumer Affairs Victoria states that consumers can cancel a lay-by at any time before they collect the item.

first-party
1 quote from 1 source
Consumers can cancel a lay-by at any time before they collect the item.
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Consumer Affairs Victoria states that where a lay-by agreement is terminated the supplier must refund to the consumer all the payments they have made under the agreement, other than any termination charge payable under the agreement.

first-party
1 quote from 1 source
If a lay-by agreement is terminated, you must refund to the consumer all the payments they have made under the agreement, other than any termination charge that is payable under the agreement.
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Consumer Affairs Victoria states that a supplier must ensure any termination charge in a lay-by agreement is not more than the supplier's reasonable costs in relation to the agreement.

first-party
1 quote from 1 source
You must ensure that, if the agreement includes a termination charge, the amount of the charge is not more than your reasonable costs in relation to the agreement.
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Consumer Affairs Victoria states that a supplier must not terminate a lay-by agreement unless the consumer breached it, the supplier is no longer engaged in trade or commerce, or the products are no longer available.

first-party
1 quote from 1 source
You must not terminate a lay-by agreement unless: (a) the consumer breached the agreement; or (b) you are no longer engaged in trade or commerce; or (c) the products to which the agreement relates are no longer available.
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Consumer Affairs Victoria states that a lay-by cancellation fee must not be more than the supplier's reasonable costs in relation to the agreement.

first-party
1 quote from 1 source
but it must not be more than the supplier’s ‘reasonable costs’ in relation to the agreement.
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Consumer Affairs Victoria states that a supplier can charge a lay-by cancellation fee where the store has kept its part of the agreement and the consumer has simply changed their mind.

first-party
3 quotes from 1 source
The supplier can charge a cancellation fee if:
the store has kept their part of the lay-by agreement, and
the consumer has simply changed their mind and decided they no longer want the lay-by.
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Consumer Affairs Victoria states that where the price of a laid-by item changes, the consumer still has to pay the price shown in the lay-by agreement unless the store agrees to sell the product at the new price.

first-party
1 quote from 1 source
the consumer still has to pay the price shown in the lay-by agreement, unless the store agrees to sell the product at the new price.
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For a layby purchase that comes with a warranty for a set period, the warranty period begins when the consumer finalises the layby contract and takes ownership of the product.

first-party
1 quote from 1 source
the warranty period begins when the consumer finalises the lay-by contract and takes ownership of the product.
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Consumer Affairs Victoria states that lay-by agreements must be…

  • in writing.
  • transparent.
  • expressed in plain language.
  • legible.
  • clearly presented.
first-party
1 quote from 1 source
Lay-by agreements must be in writing and be transparent (expressed in plain language, legible and clearly presented).

Disputed between sources1

Sources that do not agree, presented without picking a winner.

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The ACCC states that a lay-by agreement is one where consumers pay for goods in two or more instalments, while Consumer Affairs Victoria states the threshold is at least three instalments unless the agreement is itself called a lay-by agreement.

first-party
2 quotes from 2 sources
where consumers pay for goods in two or more instalments, and do not receive the goods until the full price has been paid.
pays for the products in at least three instalments (when the agreement is not stated to be a ‘lay-by’ agreement) or in two instalments (when the agreement is called a ‘lay-by’ agreement), and

Often said, but we could not find it in the rules10

Lots of people say this. We went looking for an official source that backs it up and could not find one, so treat it as something people repeat rather than something settled.

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LegalVision states that a lay-by agreement exists where a business allows the customer to pay for an item in at least two installments and the customer will not receive the goods until they have paid the full price.

vendor
1 quote from 1 source
A lay-by agreement exists where your business allows the customer to pay for an item in at least two installments, and the customer won’t receive the goods until they have paid the full price.
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LegalVision states that the termination fee is all that a business can recover from a cancellation of a lay-by agreement.

vendor
1 quote from 1 source
The termination fee is all that you can recover from a cancellation of the lay-by agreement.
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LegalVision states that a business cannot recover damages or other remedies from terminating a layby agreement.

vendor
1 quote from 1 source
You cannot recover damages or other remedies from terminating the agreement.
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Sprintlaw states that layby is…

  • a sales arrangement.
  • an arrangement in which a customer pays for goods in instalments.
  • an arrangement in which a customer takes possession only once the full price is paid.
other
1 quote from 1 source
A lay-by agreement is a sales arrangement where a customer pays for goods in instalments and only takes possession once the full price is paid.
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Sprintlaw states that deductions for reasonable costs do not apply in the case of a layby cancelled by the supplier for…

  • unavailability.
  • business closure.
other
1 quote from 1 source
Deductions for “reasonable costs” do not apply where you are the one cancelling for unavailability or business closure.
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Sprintlaw states that layby sales are…

  • legal.
  • specifically regulated under the Australian Consumer Law.
other
1 quote from 1 source
Lay-by sales are legal and specifically regulated under the Australian Consumer Law.