Most organizations that sell products and services to consumers truly want their customers to be satisfied by their purchase. It makes good business sense and generates repeat customers and goodwill. However, there are situations in which the consumer is genuinely not satisfied and wants to cancel the sales contract. The following consumer protections make canceling a contract possible. But first, we need to look at what makes contracts so important.The Sanctity of Contracts
For hundreds of years courts have considered contracts sacrosanct. Without contracts commerce could not function or would be greatly restricted. Contracts are legally considered binding as between the contacting parties. Contracts are not made to be cancelled. To the contrary, the law requires that all parties to a contract perform their promises as agreed to or risk being sued for breach of the contract. Notwithstanding, the law recognizes certain types of contracts involving consumers to be so one sided and hard handed, that laws have been enacted to provide consumers with additional protections. Canceling Through Cooling-Off Rules
Many types of sales contracts involving consumers allows for the cancellation of certain types of contracts within three days at the election of the consumer. This is known as a “cooling off” period and it allows the consumer to cool off from the pressure and excitement associated with certain types of purchases. Most of the consumer protections have originated by federal law and have been expanded in scope by state law.
These protections usually apply to contracts involving high-pressure sales tactics used in the sale of homes, home refinancing, automobile equity loans, gym memberships, weight loss programs and many types of Internet purchases.
In contracts involving the purchase of home equity loans, the federal government in an effort to further protect consumers enacted the Truth in Lending Act, which provides until midnight of the third business day after a contract was signed to cancel the contract with legal impunity. Under these laws, the seller is legally obligated to inform the consumer about their right to cancel and must provide a cancellation form to the consumer once the contract is signed. Canceling Based On Quality
The federal government through the Federal Trade Commission provides additional protections for consumers who order products through the mail, telephone, or through the Internet.
Consumers may dispute a charge if the consumer purchased the product and found it unsatisfactory. As with a billing error, you may legally withhold payment on the disputed amount but the consumer must pay for any part of the bill that is not in dispute. Under this rule, the consumer must have purchased the item in their home state or within a hundred miles from their home residence and the amount in dispute must be over $50. Finally, the consumer must have first made a good faith effort to resolve the dispute.Unordered Goods
Under federal law if a consumer receives an item that he or she did not order, the law allows the consumer to consider the item a gift. As strange as this might seem, you cannot be forced to pay for the item if it was sent to you without your consent or request. However, if you decide to keep it, it is strongly recommended that you notify the seller in writing of your intentions by certified mail. Be careful though, this law does not cover good faith shipping errors in which you received goods intended for someone else.Avoiding Cancellation
Finally, the best way to avoid the hassle of cancellation is not to enter into the sales contract in the first place. Before you sign a contract, get as much information in writing as you can. Take the time to make sure the contract makes sense to you and comports with the claims and benefits made by the seller. Finally, make sure there is no blank spaces within the contract and that you get a copy of the contract for your records.For more information on consumer rights and protections, including contracts and warranties, lemon law, consumer lawyers and small claims court, go to GotTrouble.com