When you return from the store having bought something that aren’t happy with, the first thing that comes to mind is probably “to get my money back.” Granting that this request is a common practice among retailers , but it is not required by law.
Commercial transactions are governed by the law of contracts. When a contract doesn’t work out, the law doesn’t guarantee your money back. This is another area of law known as “restitution.” Contract law, however, follows what is called the “expectancy rule.” In essence, when a contract doesn’t work out, because it is breached or otherwise frustrated, the parties should end up in a position as if the contract has been carried out.
If that’s the law, then why do retailers give buyers their money back? Actually, there are several ways to get your money back under the law of contracts.
- When the “money back” policy is embedded in the original transaction-contract, then it becomes part of the agreement. When the contract doesn’t work out, the contract itself would mandate a refund to the buyder and the return of the goods to the seller. A receipt stating a return or exchange policy will suffice.
- If the contract itself does not have a clause on return or exchange, the parties can agree to rescind a contract. In theory, when this happens, the parties are actually forming another contract to rescind the old one. However, most people think of it as unwinding the contract, and nothing more.
