01 May I Changed My Mind, Isn’t that Okay?
Margaret A.M. Heine
is the principal counsel at Heine Law Group in Fullerton, California. She is licensed in California and Washington and has authority to practice before the Supreme Court of the United States and the United States Court of International Trade.
I CHANGED MY MIND, ISN’T THAT OKAY?
There have been a flurry of questions lately regarding when a contract can be cancelled, and when there is a three day right to cancel a contract. California Civil Code and Business and Professions Code enumerate a wide variety of circumstances when a contract may be rescinded by the consumer.
Q: When can I rescind a contract if I have changed my mind after I signed the contract?
Only certain contracts can be rescinded after you have made them without any penalties attached. Usually, a contract that is signed in your own home can be rescinded without a penalty, if you meet certain requirements, and when a contract is signed in what is recognized as a high pressure sales environment, like a health club.
Here is a partial list of times when a contract can be rescinded. Please note that some are business days (M-Saturday, no holidays), and some are calendar days without regard to weekends or holidays:
Telephone Sales Orders—if the order has not been filled, there is a 30 day cancellation period;
if the order is filled, then no cancellation period
Dental Services—3 business days to cancel
Weight Loss Services—3 business days to cancel
Health Club Studios—5 business days to cancel
Home Improvement Contract—3 business days to cancel
Mortgage Foreclosure Services—3 business days to cancel
Door to Door Sales (Home Solicitation)—3 business days to cancel
Dating Services—3 business days to cancel
Employment Counseling Services—3 business days to cancel
Home Loans—3 business days to cancel
Discount Buying Services—3 day cancellation
Q: Should I receive something in writing that I have the right to cancel the contract?
In short, yes. It should be in the language in which the item was sold to you, so, if in Spanish, the notice must be Spanish. The contract must inform you that you have a right to cancel whether it is Three Day Right to Cancel, Five Day Right to Cancel, Seven Day Right to Cancel, or Thirty Day Right to Cancel.
Q: Can’t I just say I want to cancel the contract?
No. To cancel a contract it must be canceled formally. Use the proper form you were given when you signed the contract; and if you did not receive a form, then the cancellation must be in writing. The cancellation must be sent to the company in the manner specified in the cancellation form or contract provision: by mail, personal delivery or telegram—once again, read the notice you received or the contract.
Q: The product I ordered was shipped and now I don’t want it, why can’t I just cancel?
If the contract has been performed, you cannot simply cancel it by saying you don’t want it. You have to return the product, and you will be responsible for any restocking or return charges involved with the order.
Q: I have a contract with a health club or dance studio or weight loss studio, and have to move, but they will not cancel my contract, what can I do?
Under the Civil Code, the contract must be canceled if you become disabled or if you move more than 50 miles away from your primary residence AND you cannot transfer the contract to your new location. So, just moving is not enough to cancel the contract there cannot be another club or studio to transfer the contract to at your new location. The Code does not state how close it has to be to your new location, so, rule of thumb would be within 50 miles of your new residence.
Q: Can I return the car I bought within 3 days to cancel the contract?
No. There is no provision to cancel an automobile contract within any number of days. As they say in the auction business, you bought it, you own it.
Remember, you are tied to the terms of the agreement. Read the paperwork for any transaction or contract you enter into. Your rights are tied into the agreement and will identify what rights you have with regard to the purchase, warranty and cancellation.