Question

Consumers have three business days after signing a contract during which they can rescind it. This is known as the "three-day cooling-off period". (Not part of the question, but for clarification for this question - a contract means any and all types of contracts).

True

False

Answer 1

The 3 business days to cancel contract rule is also known as the "cooling-off period" rule. It can be used in some situations but not all.3 min read

The 3 business days to cancel contract rule is also known as the "cooling-off period" rule. It can be used in some situations but not all. State and federal laws provide some options for consumers who change their mind shortly after purchasing certain items.

The answer is True

The Federal Trade Commission's Cooling-Off Rule states that a purchase over $25, your right to cancel a contract for a full refund extends until midnight on the third business day after the sale. The Cooling-Off Rule only applies to sales at the buyer's home, workplace or dormitory, or at a temporary workplace of the seller (such as hotel or motel rooms, conventions centers, fairgrounds or restaurants). Under the Cooling-Off Rule, the sales person must tell you about your cancellation rights at the time of the sale. The salesperson must also provide copies of the cancellation form (one to keep and one to send) and a copy of your contract or receipt. The contract or receipt should clearly show the date, name and address of seller, and explain your right to cancel. Also, the contract or receipt must be in the same language used during the sales presentation.

In New York State the three-day cooling-off period does not begin until the seller gives you the "Notice Of Cancellation" form. Until a form is received, you may cancel the door-to-door sale by notifying the seller at any time, in any manner. You do not have to give a reason for canceling; it is your right to change your mind. Nevertheless, it is suggested you send the cancellation notice in writing. You should send a certified letter with return receipt requested.

If you terminate a contract, within 10 business days the merchant must cancel and return any papers you signed, refund your money, tell you whether any product left with you will be picked up, and return any trade-in. Within 20 days, the merchant must pick up any items left with you, or, if you agree, pay any shipping expenses for you to ship them back.