Brian put a stereo system on lay-by at an electrical store. The stereo was on sale for $400.
Before committing to the lay-by, Brian made sure he read its terms and conditions. He had to make regular fortnightly repayments and finalise the lay-by within three months.
Brian made all of his payments on time. However, when Brian went to pick up the lay-by, the store manager explained that the store had lost the stereo system put aside for him.
Brian demanded the store take another stereo off the shelf and give it to him. The store manager refused to replace the lay-by stereo, because it was now selling for $500 and could not be reduced. The manager offered Brian a different stereo with fewer features for $400.
Brian was not happy with either option, and asked to cancel his lay-by agreement. The store told Brian that if he cancelled his lay-by agreement he would not be entitled to a refund.
What are Brian's rights in this situation?
It is illegal for a business to terminate a lay-by agreement, unless there are circumstances outside their control that force the agreement to be terminated. For example, if a customer had an original painting on lay-by and it was destroyed by fire, the business would be able to terminate the lay-by and return any payments made.
In this case, because the store has the stereo in stock and is simply refusing to give it to Brian in the hope of selling it for more money (on top of keeping Brian's payments), it is acting illegally.
Brian is entitled to receive the stereo for $400, as stated in the lay-by agreement.
Read more about lay-bys.
Last reviewed 30/11/2011