'The Cooling-Off Rule': Know Your Rights to Cancel Contracts

MINNEAPOLIS (WCCO) -- Federal and Minnesota law allow consumers to cancel certain types of contracts within three business days, a right the seller has to disclose at the time of sale.

The "Cooling off Rule," as described by the Federal Trade Commission, gives buyers until midnight on the third business day to cancel certain sales they regret agreeing to.

It mostly applies to home solicitors, but also pertains to life insurance policies, gyms and health club memberships, extended car warranties and hearing aids, among other things.

Military personnel can also cancel cellphone, rental and other service contracts when called for deployment.

The rule does not apply to vehicle purchases, anything worth less than $25, or the sale of insurance or real estate.

The transaction has to take place away from the seller's normal place of business, such as a home or convention.