How to Cancel a Contract in Writing

Have you ever signed a contract and then regretted it a day later? Say you were to sign an agreement with a fitness club then went home to discover that someone just bought you a treadmill. Now you want out, but what are your options? Thankfully, because of helpful laws established by the Federal Trade Commission (FTC) and individual states, you can cancel some types of contracts within a few days of signing. It's important to keep in mind that not all contracts can be canceled with the support of state or federal law, so you have to do some research before writing a cancellation letter.

Things You'll Need

• Complete contact information for the person or business with whom you contracted

Instructions

1. Check your state laws to determine your contract cancellation rights. The Truth in Lending Act gives you three days to change you mind about a second mortgage or home improvement loan. See "Resources" below and click the "Consumer action state websites" link to find and contact your state consumer protection office.

2. Write in the date at the top of the letter. Write the name and address of the party that you contracted with a couple of lines down.

3. Get right to the point. Explain that you want to cancel your contract. Identify the contract by name and number (if applicable).

4. Discuss why you want to cancel the contract. This is not always necessary, but it could help your cause. Some state laws may also require that you give a valid reason for canceling the contract.

5. Include your full address and phone number at the bottom of the letter and sign it in the presence of a notary. The notary will be able to verify the date that you canceled with the entry in his or her book. Make a copy of the letter for your own records.

6. Deliver the letter in person or mail the letter via either overnight service with return receipt and signature confirmation or, if there isn't so much of a rush, certified mail with a return receipt and signature confirmation. This will assure that you have proof of the date that you canceled and that the other party received the letter.

Tips & Warnings

• In the future, take two or three days to mull over a contract before signing. If the other party rushes you or attempts to get you to sign without reading the agreement in its entirety, this is even more reason to wait. Fax the cancellation letter to the other party if there is a number available. Set your fax machine to give you a confirmation sheet and staple it to the letter for your records. If you use an online fax service to send your contract cancellation letter, you will have a digital copy of your letter and confirmation of its receipt.

References

• Contract cancellation rules

Resources

• Read this Article in Spanish
• Consumer action state websites
• USPS Certified Mail information
• Online fax service