2004-01-23 / Columnists

Notes On Consumer Affairs

By Assemblywoman Audrey Pheffer
Notes On Consumer Affairs By Assemblywoman Audrey Pheffer

Contracts are beneficial to both parties involved because they provide rights, responsibilities, and often an agreed-upon remedy if the contract is breached. They are a way to ensure that you receive the proper goods and services, but also to ensure that you will not be charged more money or experience any surprises when dealing with a merchant or service provider. Contracts come in many forms. They range from formal documents, like mortgages, to the simple, like buying gas (you pump the gas and therefore agree to pay the stated price).

Although contracts are often written in legal jargon, this need not be the case. Contracts can and should be written using simple, everyday language. The legal jargon is not what makes a contract binding, it only makes it more confus ing. Rather, the agreement among all parties involved that something of value has been exchanged for something else of value is what creates a binding contract.

New York law requires that certain documents be in writing. For example, real property titles and transfers (conveyances), leases for more than one year, contracts where performance cannot be done within one year from the making of the contract, and wills must be written. It also requires contracts for the sale of goods with an underlying value of $500 or more, to be in writing.

In New York, there is no general rule for "cooling-off" after a contract is signed. You should be suspicious if you are told otherwise. Cooling-off is a period of time in which you can cancel a purchase or legally break a contract because you changed your mind or have some other reason why you do not wish to complete the transaction. Under the Federal Trade Commission’s Cooling-Off Rule, you have until midnight of the third business day to cancel a contract from a door-to-door sales contract for more than twenty-five dollars, or a contract for more than twenty-five dollars that was made anywhere other than the seller’s normal place of business (i.e., at a sales presentation at a hotel or restaurant, outdoor exhibits, computer show or trade show). The "normal place of business" rule does not apply to public car auctions or craft fairs.

Although a general cooling-off rule does not exist in New York, there are numerous state laws that specifically permit a consumer to cancel written contracts. For example, New York permits the consumer to cancel a contract at midnight on the third business day for telephone sales contracts, door-to-door sales contracts, home improvement contracts, credit services, business contracts, social referral (dating) services, and sale of urea-formaldehyde foam insulation.

The spirit of contracts is that they are meant to be binding on the parties that enter into them. However, everyone has been in a position at sometime where s/he wishes that something had not been signed or agreed to. For that reason, Federal and New York State laws permit contracts to be broken under certain conditions. It is always preferable to enter into contracts when you are certain that you intend to follow through with the obligations to which you agree.

Be aware, too, that although not all contracts are required to be in writing, it is for your own protection to do so. If there is ever a dispute over the terms of or compliance with a contract, having a written document can be a tremendous benefit. The clearer and more comprehensive a contract can be, the better. Including even the terms that you think may be understood, or those that you think go without saying, can be beneficial to you because if you ever find yourself in a court of law, judges do not read minds, but they do read contracts.

The information provided here may serve as a stepping-stone from which you can begin to familiarize yourself with contract law. It is not intended to provide legal advice or provide a basis upon which you decide to break or enter contracts. If you have questions about contract rights and obligations, you should seek the advice of a legal professional.

For more information, visit the New York State Consumer Protection Board website at www.consumer. state.ny.us, and click on the Consumer Law Help Manual Link.

As well, you may visit the Federal Trade Commission website at www. ftc.gov.

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