Can I Cancel a Contract Within Three Days of Signing It?

Sometimes, federal and state laws let you cancel certain contracts within three days of signing. This is especially true for contracts you sign at your home, a trade show, or anywhere that isn’t the seller’s regular place of business.

There are laws, like the federal “cooling-off” rule, that protect buyers when they agree to home improvement loans, home equity loans, health club memberships, dating services, and similar contracts.
 

How the Cooling-Off Rule Works

If you make a deal with a door-to-door salesperson or at an off-site event, you generally have three business days to change your mind and cancel. This is called the “cooling-off” period.

For example, if you agree for someone to repair your driveway or sell you a product at a trade show, you can cancel the contract within three days—even if you just change your mind.

Most states also have similar laws.
 

What Sales the Cooling-Off Rule Covers

Under the Federal Trade Commission (FTC):
 

1. You can cancel a contract for $25 or more made during a door-to-door sale.
2. You can cancel any contract for $130 or more made somewhere other than the seller’s business, like a hotel sales presentation or a computer expo.

These rules only apply to contracts mainly for personal, family, or household use.
 

Exceptions

The rule does NOT cover:
 

• Mail, online, or telephone sales
• Sales for real estate, craft fairs, insurance, or securities
• Vehicles (cars, vans, trucks) sold at temporary locations if the seller has a permanent business address

 

How to Cancel Under the Cooling-Off Rule

 

• The seller should give you a cancellation form when you buy.
• Fill out the form or write a letter and mail it to the seller.
• Use certified mail, so you have proof.
• You must mail your cancellation by midnight of the third business day after you sign. Saturdays count as business days, but Sundays and federal holidays do not.

 

The Three-Day Cancellation Rule for Loans

Another federal law lets you cancel certain loans—like a home improvement loan, second mortgage, or any loan where your home is used as security (except a first mortgage)—within three business days of signing.

You can only start counting the days once:
 

1. You sign the loan agreement.
2. You receive a Truth in Lending form, which explains terms like interest rate and payment schedule.
3. You receive two copies of your cancellation rights.

For example, take out a home equity loan on Tuesday, and you can cancel it by midnight Friday. Again, Saturdays are business days, Sundays and federal holidays are not.
 

Exceptions

You cannot cancel a first mortgage used to buy your home or a second/vacation home using this rule.
 

How to Cancel a Loan Under the Rule

 

• The lender must tell you about your right to cancel and provide a cancellation form.
• If the lender does not properly inform you, you may have up to three years to cancel.
• Mail your cancellation request as instructed on the form.

 

Rules for Mail, Internet, or Phone Orders

If you buy goods by mail, phone, internet, or fax, the seller usually must ship your order within the time promised, or within 30 days if no time was stated.

If the seller can’t ship in that time, they must notify you, offer a new shipping date, and let you cancel and get a refund or accept the new date.

Refunds must be issued quickly—within seven working days if you paid by cash, check, or money order.
 

State Laws for Specific Services and Products

Many states allow you to cancel contracts for specific services or products, such as:
 

• Dance or martial arts lessons
• Health club memberships
• Dating services
• Weight loss programs
• Timeshare properties
• Hearing aids

Contact your state consumer protection agency or a local lawyer to find out which contracts can be cancelled in your state.
 

What To Do if Rules are Violated

If you think a seller broke the cooling-off or cancellation rules, you can:
 

• Report it to the FTC (ReportFraud.ftc.gov)
• Contact your state attorney general or consumer protection agency
• Dispute charges with your credit card company if you have a billing issue

If you need help enforcing your rights, consider speaking to a lawyer.
 

In summary

Some contracts can be cancelled within three days, especially those not signed at a seller’s place of business. Know your rights, act quickly, and contact authorities if you run into trouble.

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