§ 2454 - Purchase contracts; rescission
§ 2454. Purchase contracts; rescission
(a) Consumer's or other obligor's right to cancel
(1) Except as provided in subdivision (5) of this subsection, in addition to any right otherwise to revoke an offer, the consumer or any other person obligated for any part of the purchase price may cancel a home solicitation sale until midnight of the third business day after the day on which the consumer has signed an agreement or offer to purchase relating to such sale, or has otherwise agreed to buy consumer goods or services from the seller.
(2) Cancellation occurs when notice of cancellation is given to the seller.
(3) Notice of cancellation, if given by mail, shall be deemed given when deposited in a mailbox properly addressed and postage prepaid.
(4) Notice of cancellation need not take the form prescribed and shall be sufficient if it indicates the intention of the consumer not to be bound.
(5) A home solicitation sale may not be cancelled if the consumer has requested the seller to provide goods or services without delay because of an emergency, and
(A) the seller in good faith has begun substantial performance of the contract before the notice of cancellation has been given, and
(B) in the case of goods, the goods cannot be returned to the seller in substantially the same condition as when received by the consumer, and
(C) the consumer's request is both handwritten and signed by the consumer.
(b) Disclosure obligations
(1) In every home solicitation sale, the seller shall furnish the consumer with a fully completed receipt or copy of any contract pertaining to such sale at the time the consumer signs an agreement or offer to purchase relating to such sale, or otherwise agrees to buy consumer goods or services from the seller. Such receipt or contract copy shall show the date of the transaction and shall contain the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the consumer or on the front page of the receipt if a contract is not used and in boldface type of a minimum size of ten 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 for an explanation of this right.
(2) In a home solicitation sale, unless a consumer requests the seller to provide goods or services without delay in an emergency, the seller shall furnish a notice of cancellation to the consumer at the time he signs an agreement or offer to purchase relating to such sale or otherwise agrees to buy consumer goods or services from the seller, which notice shall be attached to the contract or receipt and easily detachable.
(A) The notice of cancellation shall contain the following information and statements, printed in not less than ten point boldface type:
NOTICE OF CANCELLATION(enter date of transaction)
...............................................
(date)
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 canceled.
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 twenty 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 midnight of ...........................................................................................................
(date)
I hereby cancel this transaction.
..........................................
(date)
.....................................................
(buyer's signature)
(B) Before furnishing copies of the "Notice of Cancellation" to the buyer, the seller shall 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.
(C) The seller shall leave the "Notice of Cancellation" with the consumer.
(D) In addition to the written notice of cancellation the seller shall orally inform the buyer of his right to cancel at the time of the transaction.
(3) Until the seller has complied with this subsection, the consumer or any other person obligated for any part of the purchase price may cancel the home solicitation sale by notifying the seller in any manner and by any means of his intention to cancel. The cancellation period of three business days shall begin to run from the time the seller complies with this subsection.
(c) Restoration of payments
(1) Within ten days after a home solicitation sale has been cancelled or an offer to purchase revoked, the seller shall tender to the consumer any payments made by the consumer and any note or other evidence of indebtedness, and take any action necessary or appropriate to terminate promptly any security interest in the transaction, except as provided in subdivision (3) of this subsection.
(2) If payment includes goods traded in, the goods shall be tendered in substantially as good condition as when received by the seller. If the seller fails to tender the goods as provided by this subsection, the consumer may elect to recover an amount equal to the trade-in allowance stated in the agreement.
(3) Until the seller has complied with this subsection the consumer may retain possession of goods delivered to him by the seller and shall have a lien on the goods in his possession or control for any recovery to which he may be entitled.
(d) Duties of seller and consumer
(1) Within ten days after a home solicitation sale has been cancelled or an offer to purchase revoked, the seller shall either demand possession of any goods delivered by the seller pursuant to the sale or instruct the consumer regarding the return shipment of the goods at the seller's expense and risk.
(2) If the seller does not give instructions regarding the return shipment of the goods, or if the consumer does not comply with any such instructions given, the seller must pick up such goods within twenty days after a home solicitation sale has been cancelled.
(3) If the seller does not act within the time periods established in subdivisions (1) and (2) of this subsection, the goods shall become the property of the consumer without obligation to pay for them.
(4) Upon demand, the consumer shall tender to the seller any goods delivered by the seller pursuant to the sale but need not tender at any place other than his residence.
(5) If the consumer agrees to return the goods to the seller and fails to do so, then he shall remain liable for performance of all obligations under the contract.
(6) The consumer shall take reasonable care of the goods in his possession both before cancellation or revocation and for a reasonable time thereafter, during which time the goods are otherwise at the seller's risk.
(7) If the seller has performed any services pursuant to a home solicitation sale prior to its cancellation, the seller shall be entitled to no compensation therefor.
(e) If the home solicitation sale is principally negotiated in a language other than English, then all of the disclosures required by this section shall be given in that language.
(f) If the consumer is unable to write in his own handwriting, then any of the statements required to be written by him under this section shall be handwritten by a member of the consumer's household at the request of the consumer. If there is no other member of the consumer's household, then such statements must be written by the seller, at the request of the consumer, and the effect of such statements shall be orally explained to the consumer by the seller.
(g) Use of the cancellation provision provided for in this section shall not prevent any other action being taken under this chapter or otherwise against such seller.
(h) A violation of any of the provisions of this section shall be considered an unfair act in commerce within the meaning of subsection 2453(a) of this title. (Added 1967, No. 132, § 1, eff. April 17, 1967; amended 1969, No. 45, § 1, eff. April 4, 1969; 1973, No. 110, § 1; 1973, No. 221 (Adj. Sess.), § 2, eff. June 7, 1974.)