Fixed-term contract cancellation calculator

You signed a 24-month gym, cellphone or armed-response contract and now you want out. The supplier says you owe every month left on the term. That is usually wrong. This calculator works out the date your notice takes effect and puts the supplier's demand in its proper place.

What this tool works out and who it is for

You enter the date the contract started, the fixed term in months, the monthly fee, the date you give written notice, and who signed: you as a person, your small business below the Consumer Protection Act threshold, or a business above it.

The tool then gives you the dates the contract runs, the date your cancellation takes effect, how much of the term is left after that date, the rand value of that remaining term, and whether the Act covers you at all. It also reminds you that fees up to the effective date are payable in full.

It is for anyone in South Africa tied into a fixed-term contract for goods or services: gym memberships, cellphone contracts, alarm monitoring, satellite television, fibre, equipment rentals and residential leases. It is also for the person who has just been sent a "settlement" for the full balance and wants to know whether that figure is real.

How the calculator decides

The tool runs the same steps every time, in this order.

First it works out when the contract ends by adding the fixed term to the start date.

Second it checks the notice date. Notice cannot come before the contract started, so the tool refuses that. If you leave the notice date blank it uses today.

Third it counts 20 business days from the notice date. A business day is any day that is not a Saturday, a Sunday or a public holiday, and the tool skips every one of those. For public holidays it uses the list in the Public Holidays Act 36 of 1994: New Year's Day, Human Rights Day, Freedom Day, Workers' Day, Youth Day, National Women's Day, Heritage Day, the Day of Reconciliation, Christmas Day and the Day of Goodwill. It adds Good Friday and Family Day, which move with Easter each year. It also applies the Sunday-to-Monday rule: when a public holiday falls on a Sunday, the Monday after it is a public holiday too. The day you give notice does not count. The count starts the next day, and the twentieth business day is the effective date.

Fourth it measures the term left after the effective date, in months and tenths of a month. If the fixed term had already expired when you gave notice, the term left is zero.

Fifth it multiplies the term left by the monthly fee and labels the result the value of the remaining term. That figure is what the supplier would have received had you stayed. It is the supplier's loss, not your penalty. The Act lets the supplier charge a reasonable cancellation penalty, and reasonable is never the same as everything.

Sixth it looks at who signed. A natural person is always a consumer. A juristic person, which means a company, close corporation, trust or partnership, is a consumer only while its asset value or annual turnover is below the threshold the Minister sets by notice. That threshold can change, so the tool never quotes it. If you choose the option for a business above the threshold, the tool tells you the Act does not apply and the contract's own cancellation clause governs.

The warnings it can raise

There are four. The first is the one above: the Act does not cover a business above the threshold, so the 20-business-day right falls away.

The second appears when the fixed term had already expired when you gave notice. Unless the supplier sent the warning the Act requires before expiry, the contract is now running month to month and you can cancel on 20 business days' notice with no penalty at all.

The third appears when the term is longer than 24 months. The Act caps a fixed-term consumer contract at 24 months unless you agreed to the longer term expressly and it gives you a demonstrable financial benefit. The tool tells you to ask the supplier to show the benefit.

The fourth appears whenever there is value left in the term. The supplier may charge a reasonable penalty, weighing what you have already paid, the value of what you keep, how much of the term is left and whether the supplier can find another customer. A demand for the whole balance is the usual overreach.

What the supplier must do before the term ends

Between 40 and 80 business days before a fixed term expires, the supplier must warn you in writing that it is about to expire and tell you what changes if it continues. If it does not, the automatic renewal and its new terms are open to challenge. After expiry, unless you expressly agreed to a new fixed term, the contract carries on month to month on the same terms and you can end it on 20 business days' notice.

The law behind it

The right comes from section 14 of the Consumer Protection Act 68 of 2008, read with regulation 5 of the regulations made under it. Section 14 sets the maximum term, the 20 business days' notice, the reasonable penalty, the pre-expiry warning and the month-to-month continuation. The LawMatch rate table records the 24-month cap, the 20 business days and the 40 to 80 business-day warning window, with the date they took effect.

Business days come from the Public Holidays Act 36 of 1994, which lists the public holidays and provides that a holiday falling on a Sunday is observed on the Monday.

The Act does not cover everything. A credit agreement, such as a loan, credit card, store account or vehicle finance, falls under the National Credit Act instead. Employment contracts are excluded. So is a contract with a business above the threshold. A residential lease from a landlord who lets property in the ordinary course of business is covered, but leases carry their own layer of rules. Read what happens if I break my lease early if that is your contract.

Worked example

This example is illustrative. Naledi signed a 24-month gym membership on 1 June 2024 at R650 a month. On Thursday 3 April 2025 she emails the gym her written notice to cancel.

The contract runs from 1 June 2024 to 1 June 2026. Now count 20 business days from 3 April. Friday 4 April is day one. Saturday 5 and Sunday 6 April are skipped. Monday 7 to Friday 11 April are days two to six. The next weekend is skipped. Monday 14 to Thursday 17 April are days seven to ten. Friday 18 April is Good Friday and Monday 21 April is Family Day, both skipped along with the weekend between them. Tuesday 22 to Friday 25 April are days eleven to fourteen. Sunday 27 April is Freedom Day, so under the Sunday-to-Monday rule Monday 28 April is a public holiday and is skipped. Tuesday 29 and Wednesday 30 April are days fifteen and sixteen. Thursday 1 May is Workers' Day, skipped. Friday 2 May is day seventeen. Monday 5, Tuesday 6 and Wednesday 7 May are days eighteen, nineteen and twenty. Her cancellation takes effect on 7 May 2025.

She pays R650 for April and for May up to the effective date. The term left after 7 May runs to 1 June 2026, about 12.8 months, and 12.8 times R650 is about R8 320. The gym's letter demands exactly that. But R8 320 is the gym's loss, not the penalty. She has paid ten months, she keeps nothing when she leaves, more than half the term remains, and a city gym replaces a member within weeks. A reasonable penalty sits well below R8 320, and the gym must justify it.

What this tool does not decide

The tool does not decide what a reasonable penalty is. The supplier proposes a figure, and if you dispute it the National Consumer Commission, the Consumer Goods and Services Ombud or a court decides on the facts. The tool shows the ceiling of the supplier's loss so you can see how far below it a fair figure sits.

It does not read your contract, so clauses about equipment, deposits and installation fees are outside it. It does not know whether your supplier sent the pre-expiry warning or what the current juristic-person threshold is. It does not apply to credit agreements at all. And it is not about the five-business-day right to walk away from a contract that came from direct marketing, which is covered in what is the Consumer Protection Act cooling-off period.

When to get advice, and the free route

Send your notice in writing, keep proof, and ask for a written breakdown of any penalty the supplier claims. If it insists on the full balance, the free route is a complaint to the Consumer Goods and Services Ombud, which handles disputes with suppliers in the retail and services sector at no cost to you, or to the National Consumer Commission, which enforces the Act. Neither needs an attorney.

Get advice from an attorney if the supplier has handed you to debt collectors or listed you with a credit bureau, if the amount is large, or if your business is above the threshold and the cancellation clause is harsh. If you cannot afford one, our legal aid page explains who Legal Aid South Africa helps and how to reach them.

LawMatch is not a law firm and this page is general information, not legal advice. Check the position of your own contract before you rely on it.

Frequently asked questions

Can I cancel a 24-month contract early?

Yes, if the Consumer Protection Act covers you. You give 20 business days' written notice, pay up to the effective date, and the supplier may charge a reasonable penalty. You do not need a reason.

Does the supplier have to accept notice by phone?

The Act requires written notice. A phone call is the commonest reason a cancellation is disputed. An email with a read receipt, or a letter with the supplier's written acknowledgement, is enough.

Is the whole remaining balance the penalty?

No. The remaining balance is what the supplier would have earned. The penalty must be reasonable, weighing what you paid, what you keep, how much of the term remains and whether the supplier can replace you. Demanding the full balance is the usual overreach.

What if my contract has already run past its end date?

Unless the supplier gave the written warning the Act requires before expiry, the contract is running month to month and you can cancel on 20 business days' notice without any penalty.