The Myth of the Three Day Contract Rescission

For my first blog post, I’ll address the pervasive myth that you always have the right to back out of a contract within three days after you have signed it.  This myth probably has its roots in Florida Statute section 501.025, which allows a buyer to cancel a home solicitation sale on or before midnight of the third day after the sale.  A home solicitation sale imeans “a sale, lease, or rental of consumer goods or services with a purchase price in excess of $25.00 away from the seller’s business place whether in person or via telephone, except for sales made at a fair or commercial exhibit or pursuant to a specific request from the buyer.  This provides a safety valve for those situations where you just can’t seem to get rid of that pesky door to door vacuum salesman without signing a contract.

You may be able to cancel or rescind a contract in other situations such as where you’ve been defrauded or where specific regulations require it; e.g., some home refinancings. However, there is not an automatic right to cancel or rescind every contract.  The bottom line is that you must read and understand a contract before you’ve signed it and the goods or services change hands, because once you’ve signed it chances are you’re stuck with it. If you’re concerned about a particular situation, then please consult a lawyer in your area.

Copyright Notice:  All Rights Reserved Harry Thomas Hackney, P.A. 2007

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34 thoughts on “The Myth of the Three Day Contract Rescission

  1. Fl Statute 501.025 states that a party has 3 business days to cancel a contract. What constitutes “a business day” under Florida law?

  2. In response to the question from Glenn K, Florida Statute section 501.021(2) states: “‘Business day’ means any calendar day except Sunday or a federal holiday.”

    Harry Hackney

    • I had a salesman try to sell me a service repair improvement to my home on 4/4/12 He tried to get me to sign an agreement, But I refused. I first needed to talk to my wife, and I hadn’t made up my mind , we talked about several things.. The most important thing he told me was that he screwed down the screens so they would not come loose and drop out. That was a big issue to me. He called acouple of days later and asked if he could come by again and talk to me. He said he wanted to remeasure a pole and see if he could finalize and agreement.
      He said he was really counting on the job. He said he could do the job verey quickly. He wanted to come by Sat the 4/7/12 and meet me in the morning to talk. That time had to be changed until after 10:30/11:00. I told him I would be home about noon then 1:00. He said he would wait. I never got got back. I had heart problems, and went into Heart Fibulation.. My wife was working and didn’t get home untill 11:00pm. He decided to just do the work he wanted. I’m serious. It wasn’t what we would had done or needed done. We had no oral or written agreement. We had no price agreement. We were away all day4/8/12 Easter . Never got back until dark. 4/9/12 I was in the Hospital in Tampa fl. I live in Orlando Fll 4/9/12 about 8:30 in the morning He the salesman came by my house , woke up my wife and wanted her to go to the bank and pay him 800.00.. She told him she knew nothing about any work he did, that I was in the hospital, and he would have to wait untill I got home.. When I did get back home I was able to see out the window that he had done some things. He repaired some screens in my pool enclosher.. He also Trashed the pool, with pieces of screening, leaves , and spline.. That clogged up the pool pump and burned it out. He was supposed to give me a copy of his Biz lic and biz insurance. He has refused to send me a copy or report the damage. The screens were not installed correctly, nor was the post, and the post is a completely different color and he never cleaned the gutters or aluminuen.. He torn out my good screens. I realized after acouple days home just what a mest it was..
      I refused to let the salesman back to the house or pay him, until he sent me a copys of the docs I asked for.. He immediatly put a lein on the house for nearly 1200.00 and claims we had a verbal agreement which is not true. I since have contested the lein forcing him to take me to court. My wife and I are Seniors and I am totally disabled with additional Heart problems. He is tryig to con us and we beleive he mat have broke the law. We since invited his wife two the house twice so she can see first hand what her husband Did and Didn’t do. He doesn’t want her to come so she has even answered back. I have about 30 pictures we had taken and letters from other contracters that are familiar with the problem. He wrongly did work he was not authorized to do and created OVER 1000.00 WORTH OF DAMAGE.
      DID HE BREAK THE LAW ?. MY WIFE OWNS THE HOUSE, AND ONLY MET HIM WHEN HE TRIED TO GET MONEY FROM HER.
      WHAT ABOUT A THREE DAY RIGHT OF RESISSION ? WE NEVER EVEN HAD AN AGREEMENT.

      • Sorry, but this is an example of a request for specific legal advice. I do not give specific legal advice. I would suggest that you contact a local attorney. It sounds like you have a defense based on a complete lack of contract. That is, there was no meeting of the minds or agreement.

  3. Florida concerned resident

    I signed a notorized Mediation agreement regarding an adjustment of my spousal support payments this past Thursday 11/20/2008. I had some questions regarding
    stipulations regarding my ability to pay a lump sum settlement. That being in todays
    market even though I have a fair to good credit rating if funds would be available
    for my refinance. He resisted adding in any contingences and the more I think about
    this the more it worries me. There are serious penalties if this does not happen.
    The signing was at 7:20PM. Do I have a chance of having this rescinded and or
    renegotiated based upon the three day rule. Is this three business days which would
    end Tuesday evening 11/25/2008

    • I’m afraid Dan’s “comment” is an example of a couple of things. First, it isn’t a comment at all. It is a request for specific legal advice. I will never give specific legal advice to a blog comment. I know nothing of the case involved. I don’t want to know anything about the case involved. This is a family law question and I don’t even practice family law. Second, Dan has failed to read the original blog post. The original post clearly states that the three day right of rescission does NOT apply to every agreement and only applies in certain narrow circumstances. In fact, that was the whole point of the post. The first sentence refers to the three day right of rescission as “a pervasive myth.” Myth as in a fantasy, a tale, fiction…. I believe a reply to an earlier comment explains the question of whether the three days are business days or calendar days. Alas, Dan didn’t read that comment either.

  4. Does the three-day law apply to internet purchases? Specifically, my daughter signed up on an internet site to take a college entrance exam at a cost of $140. She cancelled over the phone within three days, but the vendor refused to provide a refund.

  5. In response to Rick’s comment, I suggest that he read my response to Dan. As the title to the post says, the three day right of rescission is a “myth.” It only applies in one narrow circumstance — in home sales. That is, a sale where some salesman knocks on your door and sells you something in your home. An Internet sale does not qualify. The young lady might have been scammed, but this law is not the remedy for that.

  6. I bought an equipment that later found out it is a scam. It is my understanding misrepresentation and misleading is here involved. I asked for my money back (20 days after the purchase) based on misrepresentation and the vendor refuses to ge my money back. He claims I need to request refund from the manufacturer. Since I wrote a check to his name, bought the product from his company and he was the one that mislead me HE is the one liable for my money.What actions do I have against him, if any?
    Please advise.

  7. Does the 15 day right of rescission still apply for condo sales? What is the condo is purchased through an auction; does the 15 day right of rescission still apply? Thanks.

    • I don’t give legal advice via this blog. I would suggest that you consult an attorney with experience in real estate located in the area where you are buying.

  8. On a leae to sublet a ‘shared’ home, does the 3 day rescission law apply. we were give a SUMMEr LEASE and asked to chagne the dates. No terms of dates of rental payments or date for security deposit are inthe ‘sublet’ lease. Plus, a representative of the landlord is making what I consider an unfair request as far as August rent ( for the aprt of the moth I am there)
    so, I hope the 3 day rescission rule applies. Please respond. So far, all that is signed is the 2 signature pages, with a typed papargraph form me specifyint that it is aFALL lease, nto summer and other corrections that are to be made to the lease.

    • As clearly stated in the article, the three (3) day right of rescission does not apply in most cases. It is a “myth.” In some instances it applies where required by a statute, as stated in the post. As for your specific question, I do not give legal advice in this blog.

  9. Plantation Florida:

    I have a fear of dentists and have neglected my teeth for years. The pain is so great in a few teeth that I finally broke down and went to a sedation dentist. They examined me and came up with a proposal to fix my entire mouth for the sum of 13,000.00, and finance it. The financing would result in the final total being 18,546.00 from GE Money Bank. Never heard of them. After having a day to crunch the numbers, the 309.00 payment over 5 years was going to be difficult. My girlfriend is willing to pay the dentist the 13,000.00 in cash, but I’ve signed a contract stating that I agreed to the 309.00 payment for 5 years. The contract was signed Friday afternoon, the first session is scheduled for Monday (08/02/10). Can I can I rescind the contract and simply give the dentist cash, rather than incur all that interest. What are my choices. No work has been done on my mouth as yet. My dentist would be happy to get paid the cash, but the contract that was signed would probably have to still be honored. How could I cancel this contract?

    Am I stuck with the ridiculous interest payments and the grand total of 18,546.00? Going under the knife tomorrow morning at 9:00. You probably won’t get this in time.

    Phil Aug 1, 2010.

    • In response to Phil, I do not give legal advice in response to comments. However, there is some common sense advice that answers his question and that others who read this blog may benefit from. In fact, I think I will make an entire post from this question. The common sense advice is to ask. Just ask the dentist if he will agree to tear up the finance contract and take payment in full up-front. I would bet that the dentist would be happy to do that. The interest is going to the finance company and not to the dentist. The dentist might make a little off the deal for offering the financing, but he makes most of his money doing the dental work not financing dental work.

      If that fails, read the financing contract. Interest is charged for the use of money over time. If there is no pre-payment penalty in the contract, pay it off immediately and save the interest. Even if there is a pre-payment penalty, it is going to be much less than $5,000.00 in interest. The loan would become usurious if they tried to charge all the interest over a very short period of time.

      The answer is not always legalistic. Often the best approach is to just approach the other party and ask for what you want nicely. The parties can agree to almost anything they want. It is their contract.

  10. I went to a home improvement show in Orlando, saw a few displaces on different products of interest and spoke with the person promoting. He said he could setup a date to go to the home and discuss the product which happen to be form insulation. The saleman came and about 4 hours of videos and talk, he presented many figures to us and we were not ready cause we didn’t discuss our financial burden yet. He kept on insisting about losing the discount and how the payment was low financing. We signed the paper of acceptance that date and he asked us for a check to hold until the finance came through. We wanted to get him out of our hair. Later that evening we were thinking about the five year payment and another bill and quickly decided to cancel. We called the sale person and cancelled and he stated he had to speak with his boss. I wrote him a letter and we cancelled within the three days. Now the boss insist that we couldnt cancel
    this contrast because florida state has a law on home solitation which protects him. He continues to harass us because we qualified and he lost his sale.
    Are we binded to this contract. Or does this fall under home solitation?
    Thank you,

    • As I have said many times, I do not give legal advice in reply to comments on this blog. However, in the interest of enlightening my readers, I will say that the idea that Florida Statute section 501.025, or any other Florida law, protects the seller against the buyer is a joke. I suppose from his perspective it protects him if you do not cancel in writing by midnight of the third day, but you say that you timely canceled and it seems he admits that you did, but claims it is ineffective. You describe a classic example of why the three (3) day right of cancellation exists for in home sales. The salesman is lying.

  11. Thank you for responding to my question hthackney. The Owner Doug wrote me a letter two days ago with a clipping of the Statute 501.025 and on the very bottom of the letter he said he was going to keep my deposit $2,300. Since I cancelled & losses and would hold it for six months. I think this company is committing some type of swindling fraud keeping peoples money if people don’t know any better. They should be reported to the Attorney General office.

    • I would report them to the Attorney General. Also, I would consider suing them in small claims court. Small claims court is for claims of less than $5,000 and is designed to be easy and cost effective for the unrepresented. I don’t see how he can read section 501.025 as protecting him unless he is claiming the written cancellation was postmarked after midnight on the third business day following the sale. Typically, one does not count the day of the event. So, a sale on a Friday would have to be postmarked by midnight on the following Wednesday. A sale on a Monday would have to be postmarked by midnight on Thursday. I hope you immediately stopped payment. on your check.

  12. Mr. Hackney
    I do not understand your response to Miriam From Clermont. In your own blog you stated.

    Filed under: Contracts, Home Solicitation Sales — hthackney @ 11:21 pm
    I’ll address the pervasive myth that you always have the right to back out of a contract within three days after you have signed it. This myth probably has its roots in Florida Statute section 501.025, which allows a buyer to cancel a home solicitation sale on or before midnight of the third day after the sale. A home solicitation sale means “a sale, lease, or rental of consumer goods or services with a purchase price in excess of $25.00 away from the seller’s business place whether in person or via telephone, except for sales made at a fair or commercial exhibit or pursuant to a specific request from the buyer. This provides a safety valve for those situations where you just can’t seem to get rid of that pesky door to door vacuum salesman without signing a contract.

    Additionally another attorney from our state posted the following.

    By Steven M. Fahlgren, Esq., (904) 845-2255
    One of the biggest misconceptions held by consumers is that a consumer always has three business days to cancel a signed contract. Unfortunately for consumers, this is not the general law. An exception does exist, however, for transactions which result from home solicitation sales.
    Under Florida law, these are several requirements for a “home solicitation sale.” First, it must be a sale, lease, or rental of consumer goods or services with a purchase price in excess of $25.00 including any amount for interest, service charges, finance charges, postage, freight, insurance, and service or handling charges. Consumer goods are further defined as those goods purchased or leased for family, household or personal purposes. Finally, the transaction must be concluded at a place other than the seller’s place of business, although the legislature has created an exemption for motor vehicle tent sales.
    When evaluating whether a transaction is concluded at a person’s home, courts often distinguish between invitations by a potential buyer and solicitations by a potential seller. Transactions initiated by the buyer such as when an individual invites someone to come to his or her home to make a “pitch” are excluded under Florida’s Act. One example may include a potential buyer contacts a seller and informs the seller of the buyer’s intent to purchase goods and services but still wants to discuss the terms and prices. The key distinction seems to be whether the seller solicited the sale without any request by the buyer.

    Now I understand in the event of a sales person knocking on a door and selling something is covered. I guess I would like some type of clarification.

    Doug

    • I’m not sure what your question is. It seems to me that from Miriam’s description that she met the salesman at a home show and he invited himself into her home to make his pitch. That is, she expressed interest and he volunteered to come to her home for the sale. It does not sound to me like she approached him as a ready and willing buyer who only wanted to seal the deal. I do not think she initiated the transaction merely because she expressed some interest in the product at a home show.

  13. Thank you so much for the Florida info I signed a contract renewal for repair services in my home on
    Friday and thought that I had missed the boat because I could not get to the post office by midnight Monday. So is it correct then that the time line would be Saturday. Monday and it would expire midnight
    Tuesday? or is it Wednesday as I read in one of the above answers Please clarify

    • Florida Statute section 501,021 defines a business day as “any calendar day except Sunday or a federal holiday.” So the third business day would be Tuesday, assuming that the Monday in question was not a federal holiday.

  14. I entered a contract on 1/ 11, 2012 for a vacation club. I paid a fee of $6,676.00. I attempted to cancel by certified mail on the third day, but because it was a Saturday and the post office was closed at noon, I could not get the letter certified. I dropped it in the mail. I was able to send a certified letter to them on the next business day. They are insisting that they did not receive my first letter, and that my right to cancel had expired. Do I have any recourse?

    • I do not give legal advice on this blog and would suggest that you consult an attorney in your area. This blog post was about in home solicitation sales. You do not mention whether the sale occurred in your home. A properly addressed letter mailed via the U.S. Postal Service is presumed to reach its destination. That would be an issue of fact for the judge or jury to decide. If by “vacation club” you mean a time share, Florida law allows you ten (10) days to rescind the purchase.

  15. I purchase a service for hair extensions yesterday after 5pm. The service is to be completed in 3 weeks. I was asked for an initial deposit (half of the amount $1,400) Today is day 2, and I am coming across many bad reviews about this vendor that I had not seen prior to giving the initial deposit yesterday in the amount of $700.00. I am considering going to the establishment tomorrow to cancel the service and request that a refund is issued to my card. Do I need to provide something in writing so that it is consider valid? Please advise. Thank you.

  16. I signed a contract to be able to use a discount travel agency. ($8,600)There was a statement with a 15% plus $400.00 penalty clause for cancellation of membership. I cancelled within 3 days, am I responsible for these penalties? I answered a mail flyer that was sent to my home and went to a presentation at a local hotel in Florida and it is a Florida company. Thank you

    • Sorry, but this is a request for specific legal advice and I do not give legal advice on this blog. I would suggest that you contact a local attorney for advice. Payment of an hour or two would probably go a long way towards answering your concerns. This does not sound like it was a sale in your home.

  17. A real estate agent brought me a contract at home and I made an offer.
    Later I found out it was a bad deal. The seller refuse to release my escrow deposit.
    Was I supposed to receive a 3 days cooling period to cancel that contract?

    • Florida Statute section 501.021(1) defines a “home solicitation sale” as “a sale, lease, or rental of consumer goods or services with a purchase price in excess of $25 ….” Real property is not a “consumer good.” Therefore, this was not a “home solicitation sale” and the three (3) day right of rescission does not apply. I called it a “myth” because people think it applies in every situation, but it only applies in the one narrow case of a “home solicitation sale.”

    • “Business day” generally means Monday through Friday except for legal holidays. Whether a particular business is open or close doesn’t matter. For example, let’s say you buy a product from Acme Widgets on a Thursday and Acme is closed every Monday. Friday is a business day. Saturday and Sunday are not. Monday is a business day even though Acme is closed. Tuesday would be the third business day.

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