Letter to a Lawyer

Dear Attorney,

I recently visited a cosmetic clinic to avail of a slimming promo. While there, I was offered various services and memberships at different prices. After a series of negotiations, I agreed to sign a contract, which they said would be notarized. However, upon returning home, I realized that the contract I signed appears to be geared towards products, devices, and machines rather than the actual services I intended to receive. In fact, the only product I received as part of the agreement was a complimentary body butter. I have not utilized any of the services or treatments mentioned in the membership contract.

I am now having second thoughts and would like to know whether I can still cancel the agreement and request a refund of the amount I paid. The document I signed includes a “change of mind” policy, but I am unsure if that policy is valid under the circumstances. Could you kindly advise me about the best course of action and my rights under Philippine law?

Thank you.

Respectfully,
A Concerned Consumer

Legal Article: A Comprehensive Analysis of Contractual Rights, Consumer Remedies, and Refund Policies in the Philippine Setting for Cosmetic and Aesthetic Clinic Membership Agreements

I. Introduction

In the Philippines, contracts between service providers—such as cosmetic, wellness, and aesthetic clinics—and consumers must adhere to Philippine law, including the Civil Code of the Philippines, the Consumer Act (Republic Act No. 7394), and relevant jurisprudence. The scenario raised—signing a contract for a cosmetic clinic membership under the impression that it encompassed certain services, only to later find it primarily pertains to products or equipment, with minimal to no actual services rendered—opens a number of legal considerations. These considerations revolve around proper consent, misrepresentation, the application of consumer protection statutes, and the potential for rescission or cancellation of the contract. This article explores these issues in depth, focusing on contract formation, vitiation of consent, statutory consumer rights, the enforceability of “no refund” or “change of mind” policies, and the recourse available under Philippine law.

II. Governing Laws and Legal Framework

Civil Code of the Philippines (Republic Act No. 386): The Civil Code lays down the fundamental principles of obligations and contracts. Under Philippine civil law, a valid contract must have the following requisites: (a) consent of the contracting parties; (b) a certain object that is the subject matter of the contract; and (c) cause of the obligation. If any of these elements are wanting, or if consent was obtained through mistake, fraud, undue influence, or misrepresentation, the contract may be rendered void or voidable.
Consumer Act of the Philippines (Republic Act No. 7394): The Consumer Act governs the relationship between consumers and providers, ensuring fairness and protecting consumers against deceptive, unfair, and unconscionable sales acts or practices. Under this Act, the consumer is entitled to protection against misleading representations and has rights that may allow rescission of contracts or refund requests in certain circumstances.
Department of Trade and Industry (DTI) Regulations and Industry Standards: DTI implements rules and policies that help clarify consumer rights, regulate product warranties, and address refunds and exchanges. While there is no general law that mandates a “cooling-off” period for all types of contracts, certain consumer transactions may be subject to industry-specific regulations or guidelines that could influence a consumer’s ability to rescind a contract after signing.

III. Assessing Consent and Possible Vitiation

Consent and Intent: A contract is grounded in mutual consent. If a consumer believes they were misled about what they were purchasing—services instead of products—it may raise the issue of whether their consent was truly informed and freely given. Philippine jurisprudence recognizes that consent obtained by mistake—especially regarding the nature of the contract’s subject matter—could render the agreement voidable.
Misrepresentation or Deceptive Sales Practices: If the clinic’s representatives painted the contract as including certain services that were never actually part of the written agreement, this could constitute misrepresentation. Even if the contract’s printed terms focus on equipment or products (e.g., body butter and other items) rather than the promised slimming services, verbal assurances made by the clinic’s staff could be construed as inducing the consumer to enter into the contract under false pretenses.
Unconscionable or Unfair Terms: Contracts that contain harsh terms such as absolute “no refund” provisions or require payment for services not rendered may be considered unconscionable. Courts have, in various cases, invalidated or modified contracts that are considered too one-sided or contrary to morals and public policy.

IV. “Change of Mind” Policies and Their Enforceability

Nature of a “Change of Mind” Clause: Some businesses attempt to disclaim any right to cancellation or refund by stating that a buyer’s remorse or change of heart does not entitle them to a refund. While this is a common business practice, its enforceability depends on the circumstances of the transaction, the clarity and fairness of the contract, and whether any consumer protection laws override such policies.
Distinguishing Between Products and Services: Philippine consumer law often treats goods (tangible items) and services differently. With goods, implied warranties apply, and consumers have certain rights if the goods do not meet promised quality standards. With services, the principle of fairness and adherence to what was offered and agreed upon is paramount. If a consumer never availed of the services and the contract itself was not aligned with what was orally represented, a blanket “no refund” or “change of mind” clause may not hold water.
Unfair Contract Terms: Under the Civil Code and consumer protection regulations, clauses that unilaterally favor the business provider at the expense of the consumer may be struck down by courts. If the consumer can prove that the contract was not mutually negotiated in good faith or that the essential nature of the deal was misrepresented, a court may consider the “change of mind” clause unconscionable.

V. Applicable Remedies and Steps to Consider

Negotiation and Demand for Refund or Rescission: Before escalating to legal action, the consumer may attempt an amicable resolution. A demand letter explaining the basis of the request for cancellation and refund—highlighting misrepresentation, non-availability of intended services, and non-use of any service—could prompt the business to settle the matter without litigation.
Filing a Complaint with the Department of Trade and Industry (DTI): The DTI handles consumer complaints and can mediate between the consumer and the service provider. If the business is amenable, the DTI’s mediation process may lead to a voluntary refund, cancellation of the contract, or another fair resolution. DTI’s intervention may push the business to reconsider strict no-refund policies, especially if consumer deception or misrepresentation can be shown.
Court Action for Rescission or Annulment of Contract: If attempts to negotiate fail, the consumer may consider filing a case in court. Under the Civil Code (Articles 1390-1399), contracts that suffer from defects in consent—such as mistake or misrepresentation—may be annulled. If successful, the result of annulment would be restitution, meaning both parties are restored to their original positions, which typically entails the return of the consumer’s payment.
Small Claims Court Proceedings: If the amount in dispute falls under the jurisdictional threshold for small claims (currently set at a certain maximum amount by the Supreme Court), the consumer may opt for a simplified proceeding in a small claims court. This process does not require the representation of a lawyer, and it can be a more accessible remedy for consumers seeking refunds due to contractual irregularities.

VI. Burden of Proof and Documentation

Importance of Written Documents: In Philippine legal proceedings, written contracts and documented communications carry significant weight. If the consumer can produce the signed contract that describes primarily products and not the services orally promised, and show that they never utilized any services, it strengthens the case for misrepresentation or mistake.
Oral Representations and Advertisements: While the signed written contract is key, other evidence—such as advertisements, brochures, text messages, emails, or even witness testimonies—can help establish that the consumer was promised slimming services as part of the deal. If the clinic’s actual contract and delivered benefit (only the body butter) differ substantially from these representations, it may reinforce the argument that the consumer’s consent was not informed or that they entered the agreement under false assumptions.
Notarization and Its Effect: Notarization of a contract generally adds to its authenticity and the presumption of regularity, but it does not cure defects in consent or misrepresentation. Even a notarized contract can be annulled if it is proven that the consumer was deceived or mistaken about the fundamental terms.

VII. Time Frame for Legal Actions

Prescriptive Periods for Annulment: The Civil Code sets time limits for filing actions to annul voidable contracts. Generally, actions for annulment on the basis of mistake or fraud must be brought within four years from the discovery of the defect. However, it is best to act promptly, as waiting too long after signing reduces credibility and urgency in the eyes of both the business and the courts.
Immediate Action: The sooner the consumer raises their objection and requests rescission or cancellation, the better. Prompt action supports the argument that the consumer never intended to accept the contract terms as they stand and did not acquiesce to them over time.

VIII. Practical Advice and Considerations

Review the Fine Print: Consumers should carefully read all contract terms before signing. In hindsight, the consumer in this scenario realizes that the actual written agreement focused on products rather than the services they intended to purchase. Future consumers should ensure all intended services, their nature, quantity, schedules, and other material terms, appear in writing.
Request Clarifications and Written Promises: If the clinic’s staff makes verbal promises, the consumer should request these be incorporated into the written contract. This reduces the risk of disputes regarding what was promised versus what was delivered.
Consumer Education and Vigilance: The best defense against such pitfalls is consumer education. Knowing one’s rights under the Consumer Act and being aware of the grounds for contract annulment helps prevent buyers from succumbing to high-pressure sales tactics.

IX. Conclusion

Under Philippine law, the consumer may be able to cancel the contract and request a refund if it can be shown that their consent was vitiated by mistake or misrepresentation, or if the transaction is fundamentally different from what was verbally promised. While “change of mind” clauses and no-refund provisions are commonly included in contracts, they are not absolute and cannot circumvent the consumer’s essential rights under the law. The consumer in this case should first attempt an amicable resolution and, if necessary, seek the intervention of the DTI or the courts to annul the contract on the grounds of defect in consent.

Ultimately, courts and regulatory agencies will weigh the written agreement, the factual circumstances, and the conduct of the parties. If the membership contract primarily involved products rather than the services that the consumer believed they were purchasing—and if no services have been availed—there is a reasonable basis for arguing that the contract should be cancelled and payments refunded. Legal counsel can help determine the best strategy, gather the necessary evidence, and guide the consumer through the appropriate administrative or judicial processes to obtain a fair remedy.