Consumers enter into contracts for a variety of products and services. Some consumers mistakenly believe they have a legal right to cancel any contract within a three-day “cooling-off” period. Most contracts do not provide for a “cooling-off” period, however. Instead, the law gives people a legal right to cancel a contract within a “cooling-off” period only in certain specific situations.
One situation in which Minnesota law provides a “cooling-off” period is home solicitation sales. Minnesota’s Home Solicitation Sales Act (Three-Day Cooling-Off Law) applies to the sale, lease, or rental of goods or services primarily for personal or household use, and to improvements to real property—if the transaction is worth more than $25 and occurs in your home or at a place other than the seller’s normal place of business (e.g., motels and convention centers). When a transaction is covered by this law, you have three business days to cancel the contract.
Under the law, you must send a written request to the address provided by the seller. It is a good idea to send cancellation requests by certified mail through the United States Postal Service and keep a copy of the request for your records. This will give you proof that your request was timely. After the contract is cancelled, the seller must refund your money within 10 days.
If the Three-Day Cooling-Off Law applies to a transaction, the seller is required to give you notice of your right to cancel in three different forms: an oral explanation; a receipt containing certain information about your right to cancel; and two copies of a completed “NOTICE OF CANCELLATION” form. Until all three forms of notice are provided properly, you have a continuing right to cancel the contract that extends beyond three business days. Once the seller provides notice properly, the three business days right to cancel begins to run.
The Three-Day Cooling-Off Law does not apply when you buy a vehicle. It also does not cover transactions for less than $25, the sale of insurance or real estate, or sales conducted at a merchant’s normal place of business, like a retail store.
Other contracts which may allow a three-day cooling-off period include certain club memberships, reverse mortgages, residential roofing and siding contracts, and agricultural contracts. Other contracts that have various periods of time to cancel may include life insurance policies (10 days), hearing aids (45 days), extended car warranties, credit services, and membership travel. Other types of contracts and transactions may also be subject to a “cooling-off” period for cancellation. Some contracts may also be deemed void or their terms held inapplicable if you have been defrauded. If you have questions about whether a particular contract or transaction is subject to a “cooling- off” period or cancellation, you may wish to contact a private attorney to discuss your situation.
The Attorney General’s Office has a publication entitled “Contract Cooling-Off Periods” with more detailed information about cancellation periods. To request a copy of this publication or to file a complaint, you may contact the Minnesota Attorney General’s Office.
Lori Swanson is Attorney General for the State of Minnesota.