Notes On Consumer Affairs
Does New York State have a “cooling off” law that allows consumers to cancel sales contracts within a defined period of time without penalty? Of all the questions my office receives from consumers, this is one of the most frequent. While everyone has experienced buyer’s remorse on occasion and would like to be able to reverse certain purchasing decisions, there is no comprehensive state or federal cooling off law; however, there are laws that govern the manner in which businesses may enter into contracts with consumers, and a handful of statutes provide consumers the right to cancel certain transactions within a specified period of time. The following tips should help you become familiarized with some of the basic protections provided under the law so that you can be a smart consumer when it comes to contracts.
In general, a binding contract is created when an agreement is reached among parties that something of value, such as cash or goods, has been exchanged for something else of value, which could be a good or a service. It is best to ensure that all contracts you agree to are in writing. While in certain instances oral contracts may be valid, if there is ever a dispute over the terms of a contract, having written proof can be a tre-mendous benefit. New York law re-quires that certain agreements be in writing to be enforceable. For example, real property titles and transfers, leases for more than one year, contracts where performance cannot be completed within one year from the making of the contract, and wills must be written. The law also requires contracts for the sale of goods with an underlying value of $500 or more to be in writing to be enforceable.
As mentioned above, in New York, there is no general rule providing a “cooling-off” period during which a consumer may cancel a purchase or legally break a contract because they changed their mind or for some reason, do not wish to complete the transaction. You should be aware however, that there are specific protections for consumers that enter into contracts resulting from door-to-door and telephone sales, which are two selling methods that can involve high pressure sales tactics. Under the Federal Trade Commission’s Cooling-Off Rule and state law, you have until midnight of the third business day to cancel a contract from a door-to-door sale 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, including at a sales presentation at a hotel or restaurant, outdoor exhibit, or trade show. Under New York’s Telephone Sales Protection Act, you may cancel any sales contract within three business days that you agreed to over the phone with a business that is primarily engaged in the solicitation of orders by telephone. It is important to note that this law is limited to telephone sales; it generally does not ap-ply to orders placed over the phone when the consumer initiates contact with the seller.
In addition to door-to-door and telephone sales protections, there are several state laws that allow a consumer to cancel certain contracts within certain time frames.
For example, New York permits consumers within three business days of entering into the agreement to cancel home improvement contracts, health club contracts, dating service contracts, and membership campground contracts.
Consumers that contract with an Energy Service Company (ESCO) are also afforded three business days to cancel under the rules of the Public Service Commission. Pursuant to a new law that increases consumer protections for rent-to-own customers, which I sponsored, as of January 21, 2011, consumers will have the right to cancel a rent-to-own agreement without penalty prior to taking possession of the merchandise. The information provided here may serve as a broad introduction to your rights related to contracts. 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 specific contracts or obligations, you should seek the advice of a legal professional.
For more information, you may wish to visit the New York State Consumer Protection Board website at www.con sumer.state.ny.us and click on the Consumer Law Help Manual link near the top of the homepage.