Some consumers think they can cancel any contract they sign within 3 days. This is not true. As a general rule, you cannot cancel a contract simply because you change your mind. The exceptions to this rule are listed below.

WHEN CAN I CANCEL A CONTRACT?

You can cancel a contract for the following reasons:

Misrepresentation: People must be truthful and honest when making a contract. If you sign a contract based on false or misleading information of an important nature given to you by the other person, you have a right to cancel the contract. You also have a right to cancel if the person you contracted with doesn't do what they have promised to do.

Persons under the age of 18: Minors are given special legal protections. With few exceptions, a minor can cancel a contract or purchase for any reason and must be given a refund.

Motor Vehicle Purchases: Motor vehicle purchases are automatically canceled if the buyer or seller is unable to obtain financing for the vehicle. You do not have a 3-day right to cancel a vehicle purchase and a statement to this effect must appear on the contract.

Refund Policies: Stores must honor their refund policies. Retailers that do not allow refunds or exchanges within 7 days of purchase must post their policy.

Professional Licensing: Persons required to have a professional license, such as auto mechanics and building contractors, cannot enforce a contract if they are unlicensed.

WHEN CAN A CONTRACT BE CANCELED IN 3 DAYS?

The 3-day right to cancel applies to purchases of $25 or more that are not made at the seller's normal place of business. This includes purchases you make in your home and may include purchases at swap meets and trade shows. The contract you sign must tell you of your right to cancel and include a cancellation form.

To cancel, you must notify the seller in writing. A telephone call is not enough. Mail the cancellation form or a written notice to the seller at the address listed on your contract. Although not required, you should keep a copy of your letter and send it by registered mail, return receipt requested, for proof of delivery. It is not required that the seller receive your notice of cancellation within 3 days, but you must place it in the mail within 3 days.

The 3-day period does not include the day of purchase, Sundays, or holidays. The seller must return your money within 10 days of receiving your cancellation and pick up any merchandise they left with you within 20 days. If they don't pick up the merchandise, you can keep or dispose of the goods.

WHAT OTHER CONTRACTS CAN I CANCEL IN 3 DAYS OR LONGER?

3 Days: Contracts for health clubs, dating services, weight loss programs, time-shares, job listing services, employment counseling services, immigration consultants, water treatment devices, membership camping contracts, discount buying services, seller assisted marketing plans, mortgage foreclosure consultants, and sales of products or services that take place in a seminar setting.

5 Days: Contracts for credit repair services, home equity sales during foreclosure, and vocational school courses.

7 Days: Contracts for a personal emergency response unit.

10 Days: Contracts for the purchase of credit life or credit disability insurance.

30 Days: Service contracts for a home appliance, electronic product, or a used car. Cancel within 30 days for a full refund, or thereafter for a partial refund.

60 Days: Service contracts on a new car. Cancel within 60 days for a full refund, or thereafter for a partial refund.

6 Months: Dance studio lesson contracts.

HOW CAN I PROTECT MYSELF?

Never sign a contract or make a purchase that you cannot afford. Know the businesses refund policy and your cancellation rights, if any, before you sign. Read the contract carefully and get an exact copy at the time you sign. Never sign a contract with blank spaces. Put all promises in writing. If the seller won't put a promise in writing, don't sign. Don't let high-pressure sales people talk you into signing before you're ready to. Statements that you must sign today to get a good deal are rarely ever true.