The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "The Law Q&A," ran in the Champaign News-Gazette. The contents have been edited by ILAO staff and volunteers to improve readability and reflect changes in applicable laws.

Question

I signed a contract to buy furniture and tried to cancel within 3 days. The store said I couldn’t. Can’t I cancel a contract within 3 days?

Answer

You can cancel some, but not very many, contracts within three days.

When it exists, the three-day right to cancel permits people with “buyer’s remorse” to get out of deals they regret. The three-day “cooling off period” protects people in particularly vulnerable situations.

Under Illinois law, consumers are protected with a three-day right to cancel certain types of transactions. One of these is door-to-door sales. Door-to-door sales are especially high-pressure situations. People often say yes just to make the salesman leave. Another example is home repair or remodeling contracts. Consumers have a right to cancel door-to-door, home repair, or remodeling transactions within three business days after the purchase date when the total transaction is for $25 or more, and the sale is made when the seller is physically present in your residence. If you are 65 or over, and the contract is for home repair or remodeling, you have 15 full business days to cancel.

When you are solicited in your home, the seller must do the following:

• Inform you orally and in writing of your right to cancel,
• Provide the written notice of cancellation in the contract or on the receipt of purchase, and
• Give you two copies of the notice, one copy for your records and one to send to the seller in the event of cancellation.

To cancel a transaction, you must send the seller written notice within three full business days after the purchase date. Depending on the seller's regular hours of operation, "business days" may include weekends. The seller must refund any deposit you made on the purchase within ten days of receiving your cancellation notice. Within 20 days, the seller must either pick up the items left with you, or, if you agree to send back the items, reimburse you for mailing expenses. If the property isn't picked up within 20 days after you made it available, you are entitled to keep the property without any obligation to pay for it. If you do not make the items available to the seller or if you agree to return the items but fail to do so, then you remain obligated under the contract.

Under Illinois law, consumers are also protected with a three-day right to cancel for these types of transactions:

• Campground Memberships (Illinois Campground Membership Act)
• Physical Fitness Center Contracts (Illinois Physical Fitness Services Act)

The Federal Trade Commission’s “Cooling-Off Rule” gives you three days to cancel purchases of $25 or more that are made at your home or workplace (such as a door-to-door salesperson), or at a seller’s temporary location, such as hotel or motel rooms, convention centers, fairgrounds, or restaurants. This is as long as the seller has a fixed place of business somewhere.

The rule includes some exceptions. For example, the rule does not cover sales that are made entirely by mail or telephone, are the result of prior negotiations made by you at the seller's permanent business location where the goods are regularly sold, or are needed to meet an emergency. The rule also does not apply to automobile auctions or arts and crafts fairs.

The federal Truth in Lending Act allows borrowers to cancel certain agreements that use their primary home as collateral within three business days without facing a financial penalty.   

It’s important to understand that this right to cancel does not apply to loans used to buy your house. It does, however, apply to home equity loans and mortgage loan refinancing. It also applies when you finance something besides your house using your house as collateral. An example of that last type of transaction is a home repair loan.

If you think a seller has violated any of these laws or the FTC’s Cooling-Off Rule, report it to:

• the FTC at ReportFraud.ftc.gov
• the Illinois Attorney General Consumer Protection Division.

Editor's note: This article was updated in October 2019 to include the new 15-day rule for people 65 and up, effective 8/9/19.