Have Buyer’s Remorse? You Have the Right to Cancel Certain Contracts
Usually, you do not have the right to cancel a contract. Once you sign a contract, you are bound by it. Because most contracts cannot be cancelled, you should never sign a contract unless you have shopped around for the best bargain and had time to think it over. There are certain contracts that are the exception to this rule.
Contracts You Have a Right to Cancel
The law gives you the right to cancel a few types of contracts if you do so within a few days after you sign. The main types of contracts that can be canceled are:
Certain home improvement contracts
Contracts that involve a home equity loan (mortgage) on your home
Contracts with health clubs
Credit repair clinics
Despite these rights, few consumers rescind their contracts.
Contracts Entered into at the Home (Door-to-Door Sales)
Pennsylvania law recognizes that consumers are particularly vulnerable when salespersons approach them in their homes and provide additional protection for contracts that consumers agree to after being contacted at home. Contracts for goods or services more than $25 that are entered into because of a contact at your home, either in person or by telephone, can be canceled within three (3) business days following the date of the contract. It does not matter whether the salesperson calls you or if you call them. A sale while you are at your home falls under this law.
How Long do you Have to Cancel a Contract?
For contracts covered by the Door-to-Door Sales law, you have three (3) business days following the date you signed (or clicked accept or otherwise made) the contract. Credit repair and timeshare contracts can be canceled until midnight of the fifth day (and sometimes the seventh day) after you sign the contract. That time can be longer. The law requires that the contract provide you with very specific notice of your right to cancel the contract. If the contract does not contain that notice or if the notice does not comply with applicable requirements, the clock does not start “ticking” on the deadline for you to cancel. When in doubt, cancel within three days but you can also contact an attorney for more specific advice on your situation.
Do You Need a Specific Reason to Cancel the Contract?
No. For contracts that have a cancellation right, you can cancel them for any reason or no reason at all.
How Do You Cancel the Contract?
If the contract includes a cancellation notice provision, you should sign, date, and send it back to the company. You can also simply inform the company in writing that you wish to cancel the contract. We suggest that you convey the cancellation in some way that enables you to prove that you not only sent the cancellation but that you sent it timely. Sending it by fax is a great way to accomplish this. You can send it via email but even better is to send it via email with an option showing that your email was “received” by the company. You can also send it in the mail (the postmark should be on or before the deadline). Ask the post office for the Certificate of Mailing service, which provides a postmarked mailing receipt as evidence that your letter was mailed. You’ll need to complete PS Form 3817 at the time of mailing and pay the applicable fee.
What Happens After a Contract is Cancelled?
If you paid any portion of the contract price, the company must return your money within twenty (20) days after cancellation. If you received any products or materials, the company is permitted to retrieve those – you are not able to retain them.
What if the Company Does Not Comply with the Law?
Some companies will comply with the law, but others will not. Those that do not might be unscrupulous or simply do not have good systems in place to deal with contract cancellations. The company may simply ignore your cancellation. You might receive a call from the company discouraging you from canceling or mislead you into believing that your cancellation is ineffective or incorrect in some way. What happens after you try to cancel a contract can be messy.
We’re Here to Help
If you’d like to get out of or cancel a contract, the consumer rights attorneys at Fiffik Law Group are here to help. Tell us about your situation. We’ll review your contract and advise you on your rights and options. Contact us for a consultation today.