How to Cancel a Sales Contract

A sales contract is legally binding.

A sales contract is a document the consumer signs to solidify his agreement to pay for a good or service. In most cases, you cannot cancel a sales contract without incurring penalties or risking a lawsuit. There are special circumstances that allow you to cancel without penalties. In other cases, it is best to consult an attorney before canceling a sales contract.

Things You'll Need

• Copy of your contract

Instructions

1. Find out if your sale falls under the Cooling-Off Rule of the Federal Trade Commission (FTC). The Cooling-Off Rule states that sales made away from the seller's regular place of business, such as in your home or at a trade show, must come with a three-day cancellation policy that allows the seller to get a full refund. If you signed the contract away from the seller's regular place of business, call him within three days of making the purchase and tell him you want to cancel the contract.

2. Read your sales contract completely, if it does not fall under the Cooling- Off Rule. In the fine print of the document, look for any penalties or threats of lawsuit for canceling the contract. If you find such language, bring the document to your attorney before you contact the seller.

3. Call the seller and tell him you are canceling the contract. Pay any fees or penalties associated with the cancellation. Advise the seller that you have enlisted the services of an attorney in the event of a lawsuit, but that you are willing to pay the fees in order to avoid going to court.

4. Collect any evidence that the good or service was faulty, or that the seller misrepresented himself before you signed the contract. This evidence may help your case if the seller decides to sue you.

References

• Michigan State: Consumer Alert
• FTC Facts For Consumers: The Cooling Off Rule