By: Sharen Sellgren

Buyer’s remorse, or a right of rescission, is a way of voiding a contract.  It’s when you want things to go back to the status before a purchase.  Unfortunately, unless the vendor or retailer specifically offers a return policy or a sale’s contract allows you to terminate the contract, there are only a limited number of laws, like the federal and Virginia law, that provide you with this rescission or canceling right.

I. Federal Law

Under federal law, The Federal Trade Commission (FTC) has established some safeguards to protect consumers from the consequences of hasty decisions. In particular situations, there is a three-day cooling-off period during which a consumer can cancel a contract.  For instance, consumers have the right to rescind contracts signed in their home when they are solicited by door-to-door salespeople. Additionally, consumers who purchase items at a temporary business location rented by a merchant on a short terms basis– like at kiosks in a mall or at trade shows in convention centers — have the same three-day “cooling-off” period (as do home-sale parties, and special sales held at hotels or restaurants).

But, consumers do not have a three day right to cancel under federal law when buying items purchased in a retail establishment, such as a store or auto dealership or when buying things like:

• Good that total less than $25
• Real estate
• Insurance
• Securities
• Farm equipment
• Motor vehicle
• Business or education goods (i.e., not personal or household goods)
• When the purchase is entirely by mail, online, telephone, or involves arts and crafts at a fair-type venue

If you do qualify for the three-day cooling-off period, then you need to give cancellation notice to the seller by mail, or hand delivery within three business days of the sale, with the following information:

• Your name, address, and contact information;
• Identifying information for the goods or services you’re wishing to cancel (e.g., order number, account number, etc.); and
• An unequivocal statement that you are canceling the contract.

II.  Virginia Law

If you live in Virginia, there are a several statutes that allow you to cancel a contract or agreement:

• Home solicitation purchases (door-to-door salesmen) under Virginia Code § 59.1-21.3:
  • You can cancel the contract for 3 days after purchase.
  • You must give written notice of cancellation to the seller at the address stated in the agreement or offer to purchase.

 

• Computer Transactions under Virginia Code § 59.1-508.2:
  • You may cancel your purchase of computer software, online databases, software access contracts or e-books, if there is a material breach that has not been cured or waived.
  • You may give notice of cancellation in any way reasonable under the circumstances.

 

• Travel Clubs under Virginia Code § 59.1-448:
  • If you join a travel club, which is a group of business owners in the travel industry that join together and put together wholesale travel packages for an upfront cost, you may cancel the membership within seven days of purchase.
  • You may cancel by delivery, telegram, or mail with proper address and prepaid postage.

 

• Camping Membership Virginia Code § 59.1-326:
  • If you join a camping membership (a private campground open only to members who typically pay a one-time membership fee and annual dues for the right to use the campground), you may cancel the membership within seven days from the date of purchase.
  • You may cancel by: mailing notice of your intent to cancel by certified US Mail to the membership camping operator at the address shown in the membership camping contract.

 

• Health Club Virginia Code § 59.1-297:
  • A health club membership may be cancelled within three days after purchase.
  • If a health club closes or relocates its facilities, a buyer may cancel the contract if the club fails to provide comparable alternate facilities within five driving miles of the location designated in the health club contract.
  • A contract may be cancelled if you are physically unable to use a substantial portion of the services for 30 or more consecutive days.
  • You may cancel your membership by:
    • notifying the health club of cancellation in writing, by certified mail return receipt requested, or personal delivery to the address of the health club as specified in the health club contract.

 

• Pay Day Loan Virginia Code § 6.2-1816:
  • You (the borrower), have the right to cancel a loan at any time before the close of business on the next business day following the date that the loan was issued.
  • You may cancel by returning the cash or other good funds instrument (i.e., a certified check, cashier’s check, money order or, if the licensee is equipped to handle such payments, payment by credit card) of the amount advanced, back to the lender.

 

• Motor Vehicle Title Loan Virginia Code § 6.2-2215:
  • You (the borrower), have the right to cancel the loan at any time before the close of business on the next business day following the day the loan agreement is executed.
  • You may cancel by by returning the original loan proceeds check to or paying to the licensee, in the form of cash or other good funds instrument (i.e., a certified check, cashier’s check, money order or, if the licensee is equipped to handle and willing to accept such payments, payment by credit card, prepaid card, or debit card), the loan proceeds.

 

• Refund Anticipation Loan Virginia Code § 6.2-2503:
  • You (the borrower), may cancel the loan on or before the close of business on the next day of business.
  • You may cancel by either returning the original check issued for the loan or providing the amount of the loan in cash to the lender or the facilitator.

 

• Credit Services Businesses under Virginia Code § 59.1-335.8:
  • If you bought services to improve your credit, you have three days to cancel the services.
  • To cancel the contract you should mail or deliver a signed and dated copy of the cancellation notice.

 

• Fire Insurance Virginia Code § 38.2-2105:
  • You may cancel your fire insurance at any time after your purchase.
  • You may request a cancellation to the insurance company (there is no specified cancellation method).

 

• Virginia Property under Virginia Code § 55-509.4:
  • You may cancel a contract for property (that is not a cooperative or condominium):
    • within three days after the signing of the contract, if the purchaser is notified on or before the contract was signed, that the association disclosure packet will not be available;
    • within three days after receiving the association disclosure packet (or notice that the disclosure packet will not be available), you may cancel by hand delivery, electronic means, or by mail with a receipt; or
    • within six days after the postmark date if the association disclosure packet  is sent to the purchaser (or notice that the association disclosure packet will not be available), you may cancel by United States mail.
    • The purchaser may also cancel the contract at any time prior to settlement if the purchaser has not been notified that the association disclosure packet will not be available and the association disclosure packet is not delivered to the purchaser.
  • You may cancel the contract by:
    • Hand delivery;
    • United States mail, postage prepaid, provided the sender retains sufficient proof of mailing, which may be either a United States postal certificate of mailing or a certificate of service prepared by the sender confirming such mailing;
    • Electronic means provided the sender retains sufficient proof of the electronic delivery, which may be an electronic receipt of delivery, a confirmation that the notice was sent by facsimile, or a certificate of service prepared by the sender confirming the electronic delivery; or
    • Overnight delivery using a commercial service or the United States Postal Service

 

• Condominium under Virginia code § 55-79.97:
  • You may cancel the purchase of a condominium unit:
    • within three days after signing the contract if you are notified on or before the contract was signed that the resale certificate will not be available; or
    • within three days after receiving the resale certificate (or notice that the resale certificate will not be available) delivered by hand, electronic means, or mail, and a receipt is obtained; or
    • within six days after the postmark date of the resale certificate (or notice that the resale certificate will not be available) is sent to you by U.S. mail.
    • You may also cancel the contract at any time prior to settlement if you have not been notified that the resale certificate will not be available and the resale certificate is not delivered to you.
    • A resale certificate is a a set of documents you receive within 7 – 10 days after making an offer on a unit in a condominium building. (It includes the Homeowners Association budget, the Covenants, Conditions & Restrictions (CC&Rs) for the building, and a copy of the minutes of the association’s last meeting.)
  • Cancellation may be made by:
    • Hand delivery;
    • United States mail, postage prepaid, provided the sender retains sufficient proof of mailing, which may be either a United States postal certificate of mailing or a certificate of service prepared by the sender confirming such mailing;
    • Electronic means provided the sender retains sufficient proof of the electronic delivery, which may be an electronic receipt of delivery, a confirmation that the notice was sent by facsimile, or a certificate of service prepared by the sender confirming the electronic delivery; or
    • Overnight delivery.

 

• Real Estate Cooperative Virginia Code § 55-483:  
  • You cancel an interest in a real estate cooperative within ten days of the purchase.
  • To cancel you may:
    • hand deliver notice to the offeror, or
    • mail notice by prepaid United States mail, to the offeror or to his agent for service of process.

 

• Real Estate Time Share under Virginia Code § 55-376:
  • You have seven days to cancel a purchase of a time share.
  • You can cancel the contract by either:
    • hand-delivering the notice to the developer at its principal office or at the project, or
    • mailing the notice by certified United States mail, return receipt requested, to the developer or its agent designated in the contract.  Notice sent by certified mail shall be effective on the date postmarked.

 

• Virginia’s Lemon Law: ​In addition, Virginia has the Virginia Motor Vehicle Warranty Enforcement Act (Virginia’s “Lemon Law”).  A car is classified as a “lemon” if it has been repaired three times or more since its purchase or if it has been repaired once for a serious safety defect.  For more information, please see our blog post here. The Lemon Law requires that the dealer accept the vehicle for a refund or exchange or the purchaser may sue the dealer for the sales price and any other incurred damages (e.g., cost of repairs and attorney fees).

III.  Conclusion
Although federal law has a “three-day rule,” or a “right of rescission” to cancel a contract, the law only applies in limited situations.  Although Virginia laws expand the applicability of when you can cancel a contract, these laws also apply in only few, very specific situations (i.e., property purchases, health club memberships, and certain loans).  In general, there aren’t many instances when you can return a purchase without a sales contract allowing you to make the return, so buyer beware!