Without realizing it, many people enter a contractual agreement without fully reading the terms and conditions, being led to believe that the contract is simply “standard process”. This can lead to feelings of panic and stress after signing an agreement that you do not fully agree with or understand. The good news is that depending on the type of contract, Florida state allows for a cooling off period where the buyer can rescind their agreement, which essentially means that they can change their mind.
Understanding The Legalities Of Rescission
Ultimately, for a contract to have a rescission period it must be stipulated in a contractual clause. However, in Florida, there is not always a need for such a clause. The state may still allow for the chance to revoke an agreement, despite signing the terms and conditions, as long as it is done within three days. This three day (or 72 hour) “cooling down” period is generally accepted in Florida state with certain contracts.
The cooling off rule is most commonly used in real estate contracts and considered valid when the cancellation rights are communicated at the time of sale and two copies of the cancellation form are provided by the salesperson when the sale is completed at the home of the buyer or the seller’s temporary location. In this instance, the right to cancel extends to midnight of the third business day after the sale (of which Saturday is included as a business day).
There are a few exceptions to the cooling off period and real estate contracts, such as if the sale is made entirely online, over the phone or via mail. The cooling off period can also change depending on whether the property was purchased directly from the developer or not.
In the instance that an agreement was entered under force or the threat of force, then the contract can be made legally void. This is also the case if the other party materially breaches the contract or commits fraud.
If the rescission is not requested by the buyer within the time period, a mutual rescission of the contract can be requested. This can be done by drafting another contract that voids the initial agreement.
There are many instances when the cooling off period is not valid, such as the purchase of a car and other consumer products. For example, there is a common misunderstanding that if a car is purchased from a temporary dealership then the three-day rule applies – this is not the case.
Process Of Rescission
If you do find yourself in a situation where you wish to revoke your commitment to a contract – either because you rushed the signing or you simply changed your mind – be sure to follow the correct process of rescission.
No reason is needed when choosing to revoke an agreement – the buyer has the right to change their mind. One of the cancellation forms needs to be signed, dated and sent to the correct person. The other copy of the cancellation form is to be kept for personal records.
Once the agreement has been canceled, the seller has 10 days to cancel and return any funds or trade-ins. If any goods were received with the purchase, the seller needs to organize a pick up within 20 days. Alternatively, the seller needs to pay for the expense of any mail in order to return goods. Either way, the goods need to be returned in the original condition.
When deciding to commit to an agreement that requires a large investment of time or money, it is always best to get the guidance of a contract attorney that expertly provides legal services before rushing to sign. A contract is not just “standard process” as many businesses will suggest, but rather an agreement that deserves the time for revision. If, however, a mistake is made, Florida’s legal system allows for the cooling off period as a grace period in the instance of certain contracts, such as real estate agreements.