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Simple English definitions for legal terms
cooling-off rule
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A quick definition of cooling-off rule:
The cooling-off rule is a law that gives you the right to cancel a contract within a few days after signing it. This means that if you change your mind about a purchase, you can cancel it and get a full refund. The seller must tell you about this right when you make the purchase and give you a copy of the contract and a cancellation form. You have three business days to cancel the sale, and this rule applies to purchases of at least $25 made outside of the seller's normal place of business, such as at a trade show or in your home. However, it does not apply to online, mail, or telephone sales, or to certain types of purchases like insurance or art/crafts sold at fairs. Some states have their own cooling-off rules that may be similar or broader than the federal rule.
A more thorough explanation:
The Cooling-off Rule is a law that gives consumers the right to cancel a contract within a few days after signing it. This rule applies to sales, leases, or rentals of consumer goods and services that have a value of at least $25, made anywhere other than the seller's normal place of business.
For example, if you buy a vacuum cleaner from a door-to-door salesperson, you have three days to change your mind and cancel the contract. The seller must inform you of your right to cancel and provide you with a copy of the sales contract and two copies of the cancellation form. You have until midnight of the third business day after the sale to cancel.
The Cooling-off Rule applies to sales made at trade shows, conventions, and even when a salesperson makes a presentation in your home. However, it does not apply to sales made entirely online, via mail, or telephone. It also does not apply to insurance, securities, art/crafts sold at fairs, and automobiles sold directly at temporary locations such as auto shows.
Many states have laws regarding cooling-off rules, and the laws in most states resemble the federal rules. Some states have broader rules, such as Ohio, which allows cooling-off periods for sales of business opportunity plans and hearing aids in addition to the consumer goods and services covered under the federal cooling-off rule.