A salesperson at the door or the kitchen table can close a deal in an hour, but federal law gives the buyer a short window to undo it. Under the Federal Trade Commission’s cooling-off rule, a door-to-door sale can be cancelled within three business days of the transaction. The right exists without any reason and without any penalty.
The question for a homeowner who signed under pressure is whether the contract can still be undone. The FTC’s rule says yes for covered sales, but the three business days are short, the cancellation has to be in writing, and some transactions fall outside the rule altogether.
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Three business days from the transaction
The FTC’s cooling-off rule page describes the rule as covering sales made at home or other locations away from the seller’s place of business, and says buyers may cancel “within three business days of the transaction.” The rule treats it as unfair and deceptive for a seller to skip the required disclosures.
The cancellation form that must accompany the sale states the cutoff in plain terms: the buyer may cancel the transaction at any time before midnight of the third business day. Counting starts with the day of the sale, so a Friday signing leaves very little calendar time to act.
Which sales the rule covers
The rule’s text, in 16 CFR part 429 on the eCFR, applies to sales made away from the seller’s place of business where the purchase price is $25 or more if the sale is made at the buyer’s residence. At other locations, the threshold is $130.
Several transactions fall outside it. Those include sales completed after the buyer visits a permanent retail store, sales conducted entirely by mail or telephone, and sales of real property, insurance, and securities through SEC-registered broker-dealers. A buyer who initiated contact because of a genuine personal emergency can waive the right with a signed, handwritten statement.
Motor vehicle sales at auctions or temporary locations are exempt if the seller has a permanent place of business, and so are arts and crafts sold at fairs and similar venues.
What the seller must hand over
The seller has to give the buyer a completed receipt or contract along with a notice of cancellation form. The receipt must carry the statement that the buyer may cancel the transaction at any time prior to midnight of the third business day.
Those papers are the buyer’s evidence. A sale that arrives without a cancellation form, or with a form that leaves out the right, is a problem to note in writing, and the copies from the day of the sale belong in a folder with the date on them.
How to cancel
The buyer cancels by mailing or delivering a signed and dated copy of the cancellation notice to the seller’s place of business by the deadline. Writing, signing and dating it matters, because the notice is the proof that the cancellation was made inside the window.
Sending it by a method that produces a receipt, and keeping a photograph or copy of the signed notice, covers the likely dispute over whether it arrived on time. A phone call to the salesperson is not a substitute for the notice.
What the seller owes after a cancellation
Once a valid notice arrives, the seller must act within 10 business days. The rule requires a refund of all payments, return of any traded-in property, and cancellation of any negotiable instruments and security interests connected with the sale.
The FTC also released its annual report to Congress on actions to protect older adults this month, a reminder that high-pressure sales and scams aimed at older households remain a priority for the agency. Anyone who signed a contract, shared account numbers or handed over a copy of an ID at the table has reasons to review how that information is protected, whether or not the sale is cancelled.
After a salesman at the kitchen table, what has to go out within three business days?
A sale signed at the kitchen table often involves more than a price. Account numbers, a driver’s license or a Social Security number can end up in a stranger’s folder, and the cancellation window closes after three business days while that information stays out there.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
