There is plenty of misinformation among the public about canceling or rescinding a contract. Many folks think there is a magical three day period during which one can back out of a contract for goods and services. Those folks are wrong. There are, however, certain situations when consumers are able to cancel. Some state and federal laws allow a right to cancel some home-improvement contracts and gym memberships.
As a recent article in Philadelphia’s The Inquirer pointed out, during a survey of 155 businesses that informed consumers of their right to cancel, more than two-thirds said customers either never or almost never canceled.
Even with consumers’ rescission rights, such as the Federal Trade Commission’s three-day Cooling-Off Rule, it appears that they are not often used. The article quotes Jeff Sovern of New York’s St. John’s University Law School, “If the company can keep a consumer from finding out there’s a problem before the right expires, then the right of rescission does very little good.”
Obviously, it’s important to read any contract before signing it, but we all know the reality of what most folks do.