The Right to Cool Off (Cooling Off Laws in Victoria)

Most of us are aware of the purchaser’s right to change their mind after signing a contract to purchase real estate (even if the vendor hasn’t signed anything to accept your offer). Although this is at odds with the basic principle of contract law it was nevertheless legislated to protect the consumer.

Click Here For FAQs On Cooling Off Rights

This right to change one’s mind is popularly known as the “cooling off” right or the right to “cool off”. It should be noted that this rule is not without qualification. Here are the conditions which would allow a purchaser to cool off in Victoria (as per section 31 of the Sale of Land Act 1962)

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Power of purchaser to terminate a contract for sale of land:

  1. Must be a purchase of residential property*.
  2. Right must be exercised within three clear business days after you sign (even if the vendor has not yet signed to accept the written offer).
  3. Cannot be exercised if purchased at or within three business days before or after an auction.
  4. If you have previously entered into a contract to purchase the same property.
  5. If you are a real estate agent (or a real estate company).

*A purchase of commercial property is not protected. A corporate or company purchaser of residential real estate is still protected by the cooling off rights. Also note that as at the date of this post there is no cooling off right for vendors in Victoria.

The definition of three clear business days as interpreted by conveyancers is three full business days not including the day of sale. Obviously a business day is any day other than a weekend or a public holiday. The three days also do not include the day in which you signed. In other words, if you signed a contract on a Monday morning, then you would have until 5pm on Thursday to cool off.

New changes in 2017

Amendments to legislation now allow purchasers the right to cool off by serving notices at the address of a real estate agent engaged or appointed by the vendor. In 2016 a controversial decision Supreme Court of Victoria ruled that a buyer did not properly cool off by simply providing a notice to the real estate agent. This position has changed with amendments to section 31 of the Sale of Land Act and an overturning of the decision at the Court of Appeal.

Changes in 2016

A case in 2016 dealing with the question of the cooling off period and right has ruled that a notice to cool off cannot be given to the sales agent or left at their address if the buyer wishes to properly cool off under the Sale of Land Act. Read more about how to properly deliver a cooling off notice here

Changes in 2012

Previously you could not exercise your right to “cool off” if you obtained independent legal advice before signing the contract. This changed on 30 March 2012. Even if you did receive independent legal advice, your right to end the contract within the three clear business days is no longer affected.


It should also be noted that ending the contract after you have signed isn’t without cost. If you paid a deposit you are entitled to a refund. This refund however would have a penalty deducted from it. The penalty is either $100.00 or 0.2% of the purchase price, whichever is greater. It goes without saying that most likely the sum won’t be $100 given Australia’s current residential property prices.

Exercising the right

You must communicate your intention to cool off by giving the signed written notice to the vendor’s conveyancer or lawyer or leaving it at their address for service shown on the contract. It is unclear whether email or fax is sufficient; to avoid doubt personal delivery is recommended. At what time does the cooling off period expire? There is no guidance in case law or legislation as to the deadline on the day of expiry. General practice suggests that the appropriate time is 5pm. Although some practitioners posit a deadline of midnight.

Complex situations

There may come a time when there is uncertainty as to whether the right to cool off still applies. This may occur in instances where:

  1. the cooling off period of three clear business days has expired; and
  2. the vendor has not accepted the purchaser’s offer; and
  3. the vendor makes a counter offer in which the purchaser accepts.

In this scenario it can be argued by the purchaser that the cooling off period commences from the day the purchaser accepts (both verbally and in writing) the vendor’s counter offer, but only if the purchaser re-signs the contract. The right to cool off is not excluded as the vendor did not accept the first offer from the purchaser. Where the vendor has not accepted the offer, there is no contract to found a right to cool off.

By default written offers expire after three (3) days. In other words, if the vendor has not accepted a buyer’s offer after three clear business days then the offer is withdrawn. We highly recommend prospective buyers to insert a two (2) day (or even one day) expiry time frame. This provides an added level of protection to the buyer in the event that: (1) the buyer wishes to end the contract under the cooling off provisions, but fails to do so within time or correctly; and (2) the vendor fails to accept the offer within the buyer’s offer deadline.

Exceptions and other laws

As shown above a purchaser’s right to cool off does not arise in all purchase transactions. Having said that, there are limited circumstances where the courts would consider ruling the contract to be void or unenforceable. There may be factual circumstances which aid the purchaser in avoiding the contract, including a situation where the vendor falsely represents to the purchaser that a cooling-off right exists when it does not.* Furthermore, there may be other grounds to rescind the contract such as a defective vendor’s statement and section 32. Avoiding a contract and insisting on a right to cool-off when there isn’t such right are complex areas of conveyancing. A property lawyer should be contacted to advise further on such matters.

*(Misrepresentations do not automatically mean contracts can be avoided. All disputes are assessed on the individuals facts and must proceed before the courts for determination.)

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Frequently Asked Questions

Can you break the contract after the cooling off period has expired?

Yes, under some circumstances you can end the contract. If there are conditions in the contract which allow you to end the contract should an event occur or not occur (conditions precedent/conditions subsequent) you can rightfully act on these; an example of such condition is the subject to finance clause. The subject to finance clause gives you the right to end the contract should your finance not be approved within a specific time frame.

Vendor’s breaches or home no longer fit for occupation (destroyed home)

Other situations which allow you to end (rescind) the contract include: breaches by the vendor/vendor’s representative of the Sale of Land Act or any other relevant legislation; OR where the house is destroyed or damaged prior to settlement and no longer fit for occupation as a house-dwelling.

Where the vendor fails to accept your written offer within time

When buyers make their written offer and there is an expiry date on which the vendor can accept that offer, effectively there is no contract in place, and you can avoid the contract without relying on the cooling off provisions.

There may be other methods available to you to validly end the contract. Please contact our us for further information.

Can you change your offer after signing the contract?

You can change your written offer after signing the contract provided that the vendor has not agreed to your offer. Arguably, the vendor need not have signed the contract in order for the contract to be binding.

When does the cooling off period start in Victoria?

The cooling off period starts the next business day after you sign the contract. Note however there are exceptions to the cooling off right

When does the cooling off period end?

The cooling off period ends three (3) business days after you sign the contract. If you signed on Monday, then the period expires on close of business Thursday.

What is the refund after ending a contract under the a cooling off laws?

Provided that you end the contract correctly under the cooling off laws, you will be entitled to your deposit less $100.00 or 0.2% of the purchase price whichever is greater. If the cooling off period has expired and you wish to end the contract, significant cost will be incurred. The deposit paid will be forfeited and the Vendor can sue you for further moneys. Please contact us should you require tailored advice.

What rights do I have after expiry of the cooling off period and I wish to end the contract due to an issue with the contract?

By law, when you make a written offer and prior to the vendor accepting that offer, the agent must provide you with a copy of the contract you had signed. Intuitively this is so you can have the contract and section 32 vendors’ statement reviewed by your lawyer. If you were not provided with a copy of the contract you had signed when you made the written offer then there may be rights available to you.

How do I exercise the right to cool off? Can I email my notice?

Section 31 of the Sale of Land Act provides that the notice ending the contract under the cooling off laws must be delivered to the vendor and/or its agent at the address for service (shown on the contract) and this notice must be signed

Do sellers (vendors) of property have the cooling off period rights?

No, the rights granted under the Act do not protect the vendor. This does not preclude a vendor from having special conditions drafted in the contract granting them such right.

I am buying a business. Is there a right for me to cool off?

There might be. Your right to cool off is completely dependent on whether the signed contract contains specific conditions granting you such right. There is no law that protects a business purchaser.

Does the cooling off period include weekends?

No. Weekends and public holidays are excluded.

Are there any cooling off rights for auctions?

No. If the property is purchased at auction or within three business days before or after an auction there are no cooling off rights.

Exceptions to the cooling off right

Not all purchasers are granted the right to cool-off. The exceptions are contained at section 31 of the Sale of Land Act 1962 which include:

  • Purchases before, after or at auction (cooling off at auctions)
  • You have entered into a contract with the vendor on substantially the same terms
  • Property is used primarily for industrial or commercial purposes
  • Property is more than 20 hectares and is used for farming purposes
  • You are a real estate agent


  1. Brett  2015-05-28  reply

    Interesting article. What makes you say that the cooling off period ends at 5.00pm? Three clear business days would end on 11.59pm? Is there a particular act that this refers to? The Interpretation Act doesn’t define a time for a business day ending. Thanks.

    1. provey  2015-05-28  reply

      Unfortunately, there is not much guidance under current legislation or in any cases, which means the point is arguable. Given the wide acceptance of practitioners and agents of a 5pm deadline, to avoid a potentially costly dispute about what time the cooling off right expires, an adoption of a 5pm cut-off time is recommended. There are arguments which can be made on either side but that is beyond the scope of this forum.

  2. BLR  2019-06-30  reply

    What about if you were buying through a buyer’s agent and their fees had a $1000 non-refundable deposit? If you cancelled within the cooling off period, they would have to refund that deposit less termination fees, correct?

    1. provey  2019-07-02  reply

      It would appear your query relates to whether you are entitled to a refund of a deposit paid to a buyer agent rather than a vendor. Please contact us for further information.

  3. olivia  2022-09-10  reply

    Re You have entered into a contract with the vendor on substantially the same terms.

    The buyer put an offer $450k to purchase a apartment that the vendor did not accept the offer. A few days later same buyer came back and considered to increase an offer to $470k for same apartment, and the vendor accepted. In this circumstance, whether the buyer is still entitled 3 days cooling off period?


    1. provey  2022-09-14  reply

      Olivia, a purchase price of $470,000 is different to $450,000 and it may be argued that the the terms are not substantially the same. Having said this, the vendor and purchaser never entered into a contract, so the exceptions aren’t triggered. Buyers should also note that the 3-day cooling off period commences from the date the purchaser signs. Any revised offer or counter-offer should be signed the purchaser again.

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