Canceling a Sale
The Cooling Off Rule
A frequent question asked by many clients is whether or not they have a specific period of time within which to cancel a sale. The answer to this questions lies in the nature or type of sale.
Generally speaking, if you buy an item at the store, the store may impose its own refund policy, at least as to goods nor warranted, or defective at the time of sale. On the other hand, sales consummated at your home, workplace, dormitory or facilities rented by the seller or a temporary or short-term basis are subject to the Federal Trade Commission’s Cooling Off rule. The Rule gives you three days to cancel purchases of $25 or more on these types of sales. Under the Rule, your right o cancel and obtain a full refund extends until midnight of the third business day after the sale. Under the rule, the salesperson must tell you about your cancellation rights at the time of sale and provide you with two copies of a cancellation form in addition to a copy of your contract or receipt.
To cancel a sale, you need only sign and date a copy of the cancellation form, mail it to the address given for cancellation, and make sure the envelope is postmarked before midnight of the third business day after the contract date. It’s a good idea to send a certified mail so you have e date stamped receipt. IF the seller does not provide a cancellation form, you may write your own, simply stating your wish to exercise your right to cancel the sale. The law doe not require you to state a reason for cancellation – you can cancel for no reason at all.
If you do cancel, the seller has 10 days to cancel and return any promissory note or other negotiable instrument you signed and refund your money. Within 20 days, the seller must pick up the items sold ore reimburse you for mailing expenses if you agree to send them back. After cancellation, if you did receive merchandise, you must return it to the seller in as good condition as you received them. If you do not make the merchandise available for the seller to pick up, or agree to return the items and fails to do so, you remain liable under the contract.
While the rule is a boom to consumers, there are many sales to which the rule does not apply. These include sales under $25, goods not primarily intended for household or family purposes, sales made entirely be mail or telephone, sales needed to meet an emergency, or sales made as part of your request for the seller to do repairs or maintenance on your property.
The Rule also exempts sales involving real estate, insurance or securities, motor vehicles sold at temporary locations provided the seller has at least one permanent place of business, and arts or crafts sold at schools, fairs, a mall and similar locations.