Articles

Know your Rights: Consumers Can Cancel Home Solicitation Sale Contracts

By: Steven M. Fahlgren

One of the biggest misconceptions held by consumers is that a consumer always has three business days to cancel a signed contract. Unfortunately for consumers, this is not the general law. An exception does exist, however, for transactions which result from home solicitation sales.

Under Florida law, these are several requirements for a "home solicitation sale." First, it must be a sale, lease, or rental of consumer goods or services with a purchase price in excess of $25.00 including any amount for interest, service charges, finance charges, postage, freight, insurance, and service or handling charges. Consumer goods are further defined as those goods purchased or leased for family, household or personal purposes. Finally, the transaction must be concluded at a place other than the seller's place of business, although the legislature has created an exemption for motor vehicle tent sales.

When evaluating whether a transaction is concluded at a person's home, courts often distinguish between invitations by a potential buyer and solicitations by a potential seller. Transactions initiated by the buyer such as when an individual invites someone to come to his or her home to make a "pitch" are excluded under Florida's Act. One example may include a potential buyer contacts a seller and informs the seller of the buyer's intent to purchase goods and services but still wants to discuss the terms and prices. The key distinction seems to be whether the seller solicited the sale without any request by the buyer.

Similar to the Florida Statute, the Federal Trade Commission has issued Federal regulations providing for a cooling off period for home solicitation sales. Like the Florida Act, the Federal Trade Commission requires that the seller or his representative personally solicit the sale for the rules to apply. The Federal Trade Commission Rule provides somewhat less protection than the Florida Act because the Rule excludes sales which are conducted and consummated entirely by mail or telephone without any other contact between the buyer and the seller prior to delivery of the goods or performance of the services.

If a transaction is a home solicitation sale, the seller must provide the buyer with a specific written notice that advises the buyer that he or she has three business days in which to cancel or rescind the sale. The failure to do so or the misrepresentation of the buyer's right to cancel is a crime and may subject the seller to a claim under Florida's Deceptive and Unfair Trade Practices Act. The Home Solicitation Sales Act and the FTC's Rule have been interpreted to provide consumers with a continuing right to cancel where the seller has not provided the consumer with proper notice of the consumers right to cancel.

If a buyer cancels a home solicitation sale, the seller has a limited time frame in which to refund the down payment or return any goods which were traded-in as a part of the transaction. Of course, the buyer must, upon demand, tender the goods back to the seller. If the seller fails to demand possession of the goods within a reasonable time after cancellation, the goods become the property of the buyer without obligation to pay for them. Forty days is presumed to be a reasonable time period. The buyer must also take reasonably good care of the goods while they are in the buyer's possession. Of course, these are general guidelines. You should consult a consumer attorney to determine the specific laws which apply to your case.