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Making Sense of the 'Cooling Off Rule'

In certain cases, clients have three days to cancel a signed contract. Learn which conditions must be met in order to apply the 'Cooling Off Rule.'

The following was provided by the Bucks County Department of Consumer Protection:

Q. I bought a new 2013 car right after Christmas because of the great deals they were offering.  When my wife and I talked about it we decided we really could not afford the payments.  When I tried to return the car I was told that I couldn’t.  The only mileage on the car is what I put on it to bring the car home.  The dealership said that it doesn’t matter, that I signed a contract and they would hold me to it.  I thought that I had three days to cancel the contract.  Can you explain this “Cooling-Off-Rule”?  L.C., Fairless Hills     

A. The “Cooling-Off Rule” does not apply to vehicles that are purchased at the dealership.  In most cases when buying a vehicle consumers do not have three days to cancel.  You drive off the lot, the car is yours. 

The three day right to cancel or “the cooling-off rule” applies if the contact was signed at your home.  The cooling-off rule would also apply if the purchase of $25 or more took place other than at your home, but not at the business’ address, such as a convention center or a restaurant where someone could rent space to hold a seminar.  

The cooling-off rule requires a salesperson to tell you that you have three business days after the sale to change your mind. At the time of the sale the salesperson must give you a copy of your contract or receipt showing the salesperson’s name and address and explaining your right to cancel.  The salesperson must also give you two dated copies of a cancellation form, one for you to send back and one for you to keep.  

If you wanted to cancel a purchase you would sign and date one of the cancellation notices and send it by certified mail postmarked before midnight of the third business day following the sale. Saturday is considered a business day, but Sunday and legal holidays are not.  

If you were not provided with the cancellation form at the time of the sale, your three days do not start until after you receive the form from the seller.  You may also write your own letter to cancel the order.  Keep a copy for your record.       

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