When can you legally back out of a signed contract? Most of the time when you sign a legal contract and there is no fraud or deception involved you are legally bound by the contract.
Nolo.com is the source of some of our information and is a good source for consumer legal rights. Check out the Nolo books and web site: nolo.com
Federal Law 16 CFR 429.1 gives the consumers the right to cancel some contracts after a three day cooling off period. This law gives consumers the right to cancel until the midnight of the third business day after signing the contract. But that only includes some types of contract. Business days do not include Saturdays, Sundays or Holidays. Not your birthday!
Examples of when you can get out of a signed contract:
- Contracts for door-to-door salespeople when the purchase is more than $25.
- The Federal Truth in Lending Act 15 USC 1637A permits consumers to cancel loans were you pledge your home for security, like home improvement loans, second mortgage, BUT NOT first mortgages or first deeds of trust.
THE SELLER MUST GIVE THE BUYER A WRITTEN NOTICE OF THE THREE-DAY COOLING OFF PERIOD. The three days does not start until this notice has been given to the buyer.
- When buying a car there is no cooling off period, when you sign the dotted line you own the car.
The exception comes when the sales pitch on the car was in Spanish or another language spoken by the customer, but the contract and the explanation of financing and what was in the contract was in English and not in the language used by the customer. This is California Law Civil Code 1689.7
California law gives you the right to cancel different types of contracts in different time periods. Here are some examples.
- You can cancel dance lessons with in 180 days, but you must pay for lessons received. Civ. Code 1812.54
- You can cancel dating services within three days. Civ Code 1694.1
- You can cancel housing contracts purchased before a foreclosure, you have five days from the day of sale. Civ. Code 1695.4
- You can cancel prepaid job listings within three days. Civ. Code 1812.516
- You can cancel a contract for seller assisted marketing plans in three days. Civ. Code 1812.208-209
- You can cancel contracts for seminar sales within three days. Civ. Code 1689.20
- You can cancel contracts for weight loss in three days. Civ. Code. 1694.6
- You can cancel contracts for home emergency response system within seven days. Civ. Code 1687.6
- You can cancel contracts for home improvements after a national, state or local disaster within seven days. Civ. Code 1689.14
- You can cancel membership camping contracts within three days. Civ Code. 1812.303
- You can cancel time share properties within three days. Bus. & Prof. Code 11024
- You can cancel contracts for dental services within three days, but you must pay for service already received. Civ. Code 1689.3
- You can cancel contract for health studio services within three days. Civ. Code 1812.85
- You can cancel contracts with discount buying clubs within three days. Civ. Code 1812.118
How to Cancel
Contact the seller and tell him you are sending him the cancellation form. Mail it with a post mark or fax it with a date before midnight of the last day of business for the cancellation period. I suggest you send your cancellation notice by certified mail or telegram. Civ. Code 1694.1 If you deliver it in person get a signed receipt.
The seller has 10 days to pickup the items and return your money. He has 20 days to mail you the cost of mailing the products back. If the seller does not pickup the goods or sending you the cost of mailing them back, you can keep the products at no cost. Civ. Code 1689.61. *
***Please do not take these summaries as the last work in the law. Look up the Civil Codes or Business & Professional Codes, you can find copies at your local library or on the Internet under California State Government, or go to Nolo.com.