Image: Kirschenbaum & Kirschenbaum, P.C.
Image: Kirschenbaum & Kirschenbaum, P.C.

Since 1977, Kirschenbaum & Kirschenbaum, has provided the highest quality legal advice and services, whether litigous or transactional.

Header: Shadow

<< Back To Articles

Icon: Article

Federal Regulation for Notice of Cancellation


16 CFR 429.1

§ 429.1 The Rule.

In connection with any door-to-door sale, it constitutes an unfair and
deceptive act or practice for any seller to:

(a) Fail to furnish the buyer with a fully completed receipt or copy of any
contract pertaining to such sale at the time of its execution, which is in
the same language, e.g., Spanish, as that principally used in the oral sales
presentation and which shows the date of the transaction and contains the
name and address of the seller, and in immediate proximity to the space
reserved in the contract for the signature of the buyer or on the front page
of the receipt if a contract is not used and in bold face type of a minimum
size of 10 points, a statement in substantially the following form:

"You, the buyer, may cancel this transaction at any time prior to midnight
of the third business day after the date of this transaction. See the
attached notice of cancellation form for an explanation of this right."

The seller may select the method of providing the buyer with the duplicate
notice of cancellation form set forth in paragraph (b) of this section,
provided however, that in the event of cancellation the buyer must be able
to retain a complete copy of the contract or receipt. Furthermore, if both
forms are not attached to the contract or receipt, the seller is required to
alter the last sentence in the statement above to conform to the actual
location of the forms.

(b) Fail to furnish each buyer, at the time the buyer signs the door-to-door
sales contract or otherwise agrees to buy consumer goods or services from
the seller, a completed form in duplicate, captioned either "NOTICE OF RIGHT
TO CANCEL" or "NOTICE OF CANCELLATION," which shall (where applicable)
contain in ten point bold face type the following information and statements
in the same language, e.g., Spanish, as that used in the contract.

Notice of Cancellation

[enter date of transaction]



You may CANCEL this transaction, without any Penalty or Obligation, within
THREE BUSINESS DAYS from the above date.

If you cancel, any property traded in, any payments made by you under the
contract or sale, and any negotiable instrument executed by you will be
returned within TEN BUSINESS DAYS following receipt by the seller of your
cancellation notice, and any security interest arising out of the
transaction will be cancelled.

If you cancel, you must make available to the seller at your residence, in
substantially as good condition as when received, any goods delivered to you
under this contract or sale, or you may, if you wish, comply with the
instructions of the seller regarding the return shipment of the goods at the
seller's expense and risk.

If you do make the goods available to the seller and the seller does not
pick them up within 20 days of the date of your Notice of Cancellation, you
may retain or dispose of the goods without any further obligation. If you
fail to make the goods available to the seller, or if you agree to return
the goods to the seller and fail to do so, then you remain liable for
performance of all obligations under the contract.

To cancel this transaction, mail or deliver a signed and dated copy of this
Cancellation Notice or any other written notice, or send a telegram, to
[Name of seller], at [address of seller's place of business] NOT LATER THAN


(Date) -------------

(Buyer's signature) ---------------

(c) Fail, before furnishing copies of the "Notice of Cancellation" to
the buyer, to complete both copies by entering the name of the seller, the
address of the seller's place of business, the date of the transaction, and
the date, not earlier than the third business day following the date of the
transaction, by which the buyer may give notice of cancellation.

(d) Include in any door-to-door contract or receipt any confession of
judgment or any waiver of any of the rights to which the buyer is entitled
under this section including specifically the buyer's right to cancel the
sale in accordance with the provisions of this section.

(e) Fail to inform each buyer orally, at the time the buyer signs the
contract or purchases the goods or services, of the buyer's right to cancel.

(f) Misrepresent in any manner the buyer's right to cancel.

(g) Fail or refuse to honor any valid notice of cancellation by a buyer and
within 10 business days after the receipt of such notice, to: (i) Refund all
payments made under the contract or sale; (ii) return any goods or property
traded in, in substantially as good condition as when received by the
seller; (iii) cancel and return any negotiable instrument executed by the
buyer in connection with the contract or sale and take any action necessary
or appropriate to terminate promptly any security interest created in the

(h) Negotiate, transfer, sell, or assign any note or other evidence of
indebtedness to a finance company or other third party prior to midnight of
the fifth business day following the day the contract was signed or the
goods or services were purchased.

(i) Fail, within 10 business days of receipt of the buyer's notice of
cancellation, to notify the buyer whether the seller intends to repossess or
to abandon any shipped or delivered goods.

16 CFR 429.2

§ 429.2 Effect on State laws and municipal ordinances.

(a) The Commission is cognizant of the significant burden imposed upon
door-to-door sellers by the various and often inconsistent State laws that
provide the buyer the right to cancel a door-to-door sales transaction.
However, it does not believe that this constitutes sufficient justification
for preempting all of the provisions of such laws and the ordinances of the
political subdivisions of the various States. The rulemaking record in this
proceeding supports the view that the joint and coordinated efforts of both
the Commission and State and local officials are required to insure that
consumers who have purchased from a door-to-door seller something they do
not want, do not need, or cannot afford, be accorded a unilateral right to
rescind, without penalty, their agreements to purchase those goods or

(b) This part will not be construed to annul, or exempt any seller from
complying with, the laws of any State or the ordinances of a political
subdivision thereof that regulate door-to-door sales, except to the extent
that such laws or ordinances, if they permit door-to-door selling, are
directly inconsistent with the provisions of this part. Such laws or
ordinances which do not accord the buyer, with respect to the particular
transaction, a right to cancel a door-to-door sale that is substantially the
same or greater than that provided in this part, which permit the imposition
of any fee or penalty on the buyer for the exercise of such right, or which
do not provide for giving the buyer a notice of the right to cancel the
transaction in substantially the same form and manner provided for in this
part, are among those which will be considered directly inconsistent.

<< Back To Articles