Khalid Salmon has signer’s remorse. “How long do I have to cancel a contract I signed in a man’s office?” he asked. Generally speaking, no time at all. Contrary to popular belief, consumers do not have universal rights to cancel contracts. Contracts are legally binding except in cases of fraud, deception and a few exceptions specified by law.

So why do so many consumers think otherwise? The confusion stems from so-called cooling off laws. Under both state and federal laws, consumers generally have three days to cancel in-home sales of $25 or more. The laws covers sales made at the buyer’s home or workplace, as well as sales made in hotel rooms, convention centers, fairgrounds, restaurants and other off-site or temporary sales locations.

Cooling off laws are designed to protect consumers from high pressure sales tactics. In addition to in-home sales, state laws may give consumers specific rights to cancel other types of contracts. In New York State, for example, consumers have three days to cancel contracts for health club memberships, dating services, campground memberships and home improvement repairs of more than $500.

If consumers send a written cancellation notice by certified mail to the listed address within three days of signing the contract, the company is required to give a full refund.

Many consumers mistakenly believe they also have three-days to cancel contracts to buy or lease cars. However, consumers do not have any statutory right of cancellation in New York if the contract is signed at the car dealership’s regular place of business. The one exception is when the dealer is arranging financing. In those cases, the consumer can cancel the contract to purchase the car up until he signs the financing agreement.

When signing contracts, don’t assume you have a way out. Err on the side of caution. Read and understand all contracts before you sign them. It’s risky to think you have a right to cancel them.

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