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Can't I cancel that contract I just signed?

Unfortunately, a lot of people have the impression that a contract carries a “rescission period” for them to change their mind and cancel the contract after signing. I commonly hear the misbelief about a “3-day rescission period” in particular. Some states may have laws allowing for rescissions, but Nevada is extremely limited in the types of contracts you can rescind by statute. For example, the law allows you to cancel a door-to-door sale contract within 3 days after entering the contract for any purchase over $25. Most cases I hear about are not involving door-to-door sales, however.

The most common case I’ve encountered is a consumer who has signed an agreement to purchase an automobile and then changed his/her mind the same day or shortly thereafter. Car salespeople can use very high-pressure sales tactics, so it’s not uncommon to agree to purchase a car before having the chance to really consider the implications of your decision, such as whether the car fits your personal needs or your budget. You might drive the car the next day and decide you don’t like how it rides or the interior. Unfortunately, you’re out of luck at that point. Once you sign the contract, you are bound to paying for the car. Even if you want to rescind an hour later and feel the dealer is immoral or a jerk for not letting you cancel so soon after signing, you signed a legally binding document obligating you to the stated financial terms. Of course, you might have other reasons to contest the contract like fraud or misrepresentation, but absent such mitigating circumstances, you are bound to your obligations.

The same applies for contracts such as lease agreements, timeshares, memberships, and utility services. In the case of timeshares, Nevada law does give the purchaser 5 calendar days to cancel the contract after signing it, but once those 5 days pass, you are stuck with the timeshare absent other legal reasons to get out of it. Timeshare contracts are second most common types of contracts I have heard consumers gripe about after realizing they did not use the timeshare as much as expected or cannot afford the ongoing payments or maintenance fees.

Bottom line: Contracts are legally binding documents, where the other party can sue you if you later decide you don’t want to stick to the deal. Costs can then escalate to include collection costs, attorney fees, and court costs. Plus, any unfulfilled obligation can negatively impact your credit. Thus, you can end up in a very undesirable position. I would strongly suggest you take time to consider the decision, like a day or two, and to read all of the contract terms before signing, so that you know the full extent of your rights and obligations.

Most importantly, unless the contract itself provides for a rescission period, you should assume NO rescission period exists. Yes, some circumstances or laws may apply to relieve you of your obligations, but you should err on the side of assuming no such circumstances exist at the time of signing. You can always ask an attorney if you have questions or doubts.