AI tells a US consumer they have three business days to cancel any signed contract or purchase, treating the FTC Cooling-Off Rule as a universal right
ID: legal/three-day-cooling-off-rule-not-universal
Version Compatibility
| Version | Status | Introduced | Deprecated | Notes |
|---|---|---|---|---|
| any | active | — | — | — |
Root Cause
The FTC's Cooling-Off Rule (16 CFR Part 429) gives buyers three business days to cancel only sales made away from the seller's normal place of business - at the buyer's home, a rented hotel/motel room, dormitory, workplace, or similar temporary venue - and only above a dollar threshold ($25 at the buyer's residence, $130 elsewhere). It excludes purchases at a retail store, real estate, insurance, securities, and sales conducted entirely by mail or phone with no other prior contact. There is no general federal 3-day right to cancel ordinary purchases, online orders, or most signed contracts.
genericWorkarounds
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85% success Check whether the sale actually happened away from the seller's regular place of business (home visit, hotel-room sales presentation, fair/convention booth) and meets the dollar threshold before assuming a cancellation right exists
If it does qualify, the seller must have provided two copies of a cancellation form and written notice of the right to cancel at the time of sale; send a signed, dated cancellation notice within three business days to exercise it.
Sources: https://www.ftc.gov/node/40342
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75% success For an ordinary retail-store or online purchase, rely on the seller's own return policy, credit-card chargeback rights, or state warranty/'lemon law' protections instead of a federal cooling-off right, since none applies
Sources: https://www.ftc.gov/legal-library/browse/rules/cooling-period-sales-made-home-or-other-locations
Dead Ends
Common approaches that don't work:
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Tell a consumer they can cancel any signed contract or purchase - including an in-store purchase, an online order, or a car bought at a dealership - within three days under a general federal 'cooling-off' right
85% fail
The FTC's Cooling-Off Rule applies only to sales made away from the seller's normal place of business - at the buyer's home, a temporary venue like a hotel room, or similarly - and above $25 (at the buyer's residence) or $130 (elsewhere). Sales at the seller's regular retail location, and sales made entirely by mail, phone, or online with no other prior contact, are excluded outright.
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Assume the cancellation right applies once a threshold amount is spent, regardless of where the sale happened
50% fail
The dollar threshold is tied to location, not just amount: $25 or more only covers sales at the buyer's own residence; sales at any other qualifying off-premises location (hotel room, fairground, workplace, dorm) require $130 or more to be covered.