3 Day Notice of Cancellation
April 17, 2013
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Question
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Ken,
On the contract we just bought I have a question about the 3 day right of rescission in a business and if the residential client signs the contract in my office. Does a commercial client have to sign it and do we have to have a client that comes into our building sign it as well.
What if you talk to them about a new service over the phone or they walk in do you have to have them sign it then?
Thanks,
Randall Renfroe, President
Allstate Security Industries, Inc.
Amarillo, TX
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Answer
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The right of cancellation by statute is available only to a residential consumer. If any part of the sale took place at the residence then the cancellation notice has to be used. If you visit the residence, do the survery, have any conversation with the home owner, and the home owner then comes to your office to sign the contract or you send it through the mail, I suggest you use the cancellation notice.
The cancellation notice does not apply to commercial subscribers.
Your confusion may be because you may be using the Residential All in One for commercial subscribers. You should be using the Commercial All in One which does not have a cancellation notice provision.
The cancellation statute is commonly known as the door to door sales act and the 3 day cooling off period. It is intended to give the homeowner a 3 day relief period following a rigorous high pressure sales pitch.
If you don't provide the cancellation notice there can be consequences. When you go to sell your accounts a buyer may not want to pay top price or any price if you haven't complied with the cancellation law. Licencing or enforcement agencies in your state could claim you are engaged in deceptive business practices if you routinely ingore the cancellation law. Your subscriber will have 3 days from when you actually provide the notice to cancel. This can be during or after the job is completed. You're not going to be able to recover any money owed to you if the subscriber cancels. You may be able to retain what you've been paid if the subscriber doesn't let you remove your work and restore the premises.
Suffice it to say you take a risk installing a job within the 3 day cooling off period. Some jurisdictions permit the subscriber to waive the cooling off period. It will have to be in writing, prepared and signed by the subscriber and on a separate paper, not on the contract.
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