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LEGAL MYTHS CAN BE COSTLY

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Article 17-27

¡No Se Deje!

 

 Verify applicable law before you sign a contract

 

No one, not even the most experienced lawyers or judges, knows every law in effect at any moment in time.  But lawyers know that it is important to determine which laws apply to a transaction before they advise their clients to act.  Unfortunately, many generally accepted myths about the law cause people to make costly mistakes in legal transactions.

 

3 DAY RIGHT TO CANCEL CONTRACT

 

Federal law and the laws of every state do provide for a right to cancel certain types of contracts or transactions, however, there are conditions that apply.  And, the amount of time provided to exercise the right to cancel varies, as does the manner of perfecting this right.  Assuming that you have a right to cancel a contract within 3 days can be a big and very costly mistake.  I was called by a lady that had signed a contract to buy a new car.  She told me that she wanted to know how to notify the car dealer that she was canceling the contract to buy the car.  She told me that she had to do it immediately because it was already the third day after signing the contract.

 

I explained that in California, new car purchase and lease contracts are not included in the 3 Day Right to Cancel law.  She was shocked and very disappointed.  She may have other grounds for canceling the contract if the dealer misrepresented information or otherwise failed to comply with other laws, but merely changing her mind within 3 days is not enough in California.  If she had made a 5 minute phone call to an attorney to verify her mistaken belief, she could have avoided a very expensive and now unwanted purchase.

 

In California, many types of contracts can be cancelled within a short period of time after being signed.  The time period for cancellation varies depending on the type of contract.

The following list explains just a few of the contracts and the applicable time period for cancellation without cause:

 

Home Improvement Contracts                              3  days if the house is security

Home Solicitation Sales                                        3  days

Health or Gym Contracts                                      5  days

Immigration Consultant Contracts                        3  days

Internet Sales (until order filled)                           30 days

Home Foreclosure Consultants                             3   days

Telephone sales (until order filled)                       30 days

Weight Loss Service Contracts                             3   days

 

There are many other specific cancellation laws for other goods or services.  Cancellation laws are best used as a last resort.  The best advice is to not enter into bad contracts in the first place.  Contracts that are subject to a right to cancel period require the seller to inform the buyer and to provide a form to cancel the contract.  Consumers can cancel within the “Right to Cancel” period for any reason or no reason at all.  After the right to cancel period has expired, consumers must establish a legal cause to get out of the contract.  Legal cause may include fraud, misrepresentation, mistake, duress or illegality. ¡NO SE DEJE! ®

 

JESS J. ARAUJO, ESQ.