The Consumer’s Three Day Right of Rescission

By: Terry Bennett 1864lacmgkudqjpg

Have you ever made a purchase and immediately regretted it? We all have experienced this buyer’s remorse at one time or another. But did you know there are some instances in which you actually can go back and undo the transaction?

This concept is called a “right of rescission.” There has been much confusion over when a consumer has a right to rescind a transaction and when they don’t. Many people think these laws apply to any and all consumer transactions. Actually, the law only applies to very few purchases.

For example, consumers do not have a three day right to cancel in the following transactions:

  • When buying real estate, insurance, securities, farm equipment, or a motor vehicle; or
  • When the purchase is entirely by mail, online or telephone

The law does provide a few important instances when a person can rescind a contract within three days. For instance, Federal law allows consumers the right to cancel contracts signed in their home when they are solicited there by businesses. This is especially important for older folks, who sometimes enter into financially disadvantageous deals with salesman who apply high-pressure sales tactics. The same protection applies to consumers who purchase items at a temporary business location rented by a merchant on a short terms basis. This could include hotel rooms and convention centers.

You also have a right to rescind the deal when refinancing a mortgage on your home. You have until midnight of the third business day after the mortgage closing to cancel the contract. The cancellation must be done in writing. If the salesperson does not provide a cancellation form, you can still cancel your contract but it must be in writing. You are also given extra time if they do not provide you with the form.
You may waive this right if you have a bona fide personal financial emergency.

If you have any questions concerning the three day right of rescission or any other legal matter, don’t hesitate to contact an attorney. The attorneys at Skeeters, Bennett, Wilson & Humphrey want to make sure you stay informed and up-to-date.


Attorney Terry Bennett

Terry joined the practice in 1974. His areas of focus include personal injury law, real estate law, probate law, estate planning, business law, corporations, and adoptions. He is admitted to practice before the United States Supreme Court, United States Court of Appeals 6th Circuit, United States District Court Western District of Kentucky, United States Court of Military Appeals, and all Kentucky courts.

A Hardin County native and former Army office in the Judge Advocate General (JAG) Corps, Terry graduated from William and Mary in Virginia with an undergraduate degree in government. He received his Juris Doctorate from Wake Forest Law School in Winston Salem, North Carolina, where he graduated with honors.