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Right to Cancel

As a general rule, a contract is binding as soon as you sign it, and you do not have the right to cancel the contract. However, in some instances, North Carolina law, and sometimes federal law, gives you the right to cancel certain transactions even after you have signed a contract or agreement. In these instances, the seller is usually required to notify you of your right to cancel in the contract.

Where there is a right to cancel, the cancellation periods are short, typically three days, and they begin from the day you sign a purchase agreement or complete the transaction. If you choose to cancel the contract, carefully review the cancellation provision in the contract, and notify the seller in writing before the end of the cancellation period. In some instances, you may only need to have your cancellation notice postmarked before the deadline expires.

Below is a selected list of some transactions in which North Carolina consumers generally have a right to cancel the contract, typically within three days of the transaction. However, there are exceptions and qualifications to the right to cancel, some of which are noted below.

  • Loans Secured by Borrower’s Residence: A loan secured by an interest in the borrower’s principal residence, including a mortgage refinance, except the right to cancel does not apply to the following types of mortgage loans:
    • A mortgage loan for the purchase or construction of a home, or
    • Advances under a preexisting open-end credit agreement.
  • Off-Premises Sales of Consumer Goods or Services that take place at a location that is not the seller’s normal place of business, including home solicitation sales, except the three-day right to cancel does not apply to:
    • Sales for less than $25,
    • Sales made entirely over the telephone or through the mail,
    • Sales or rentals of real estate,
    • Sales of insurance or securities, or
    • Sales made after negotiations at the seller’s normal place of business or at a permanent retail shop.
  • Mobile Homes purchased from a dealer.
  • Prepaid Entertainment contracts for dance lessons, dating or social clubs, martial arts, health or athletic clubs.
  • Discount Buying Clubs.
  • Credit Repair Services.
  • Campground Memberships for more than one year if purchased from a campground operator or salesperson.
  • Certain Food Services, such as contracts to purchase meat in bulk or for home food service plans.
  • Timeshares purchased from a timeshare developer or salesperson.
  • Undeveloped Land purchased under certain conditions.

We Can Help

If you have a complaint about canceling a contract, contact us for help or call toll free within North Carolina at 1-877-5-NO-SCAM.