Contracts and "Cooling-Off Periods" (Michigan)

By Matthew A. Quick As a general rule, consumers do not have a right to cancel a contract for the sale of goods or services, but certain instances exist when consumers have a right to a "cooling-off period" where, by law, a specific time is allowed to cancel a contract after signing it.

The first thing anyone should do when determining his or her rights under a contract is READ YOUR CONTRACT. Contract provisions have the ultimate effect on the rights of the parties. If the contract provisions do not provide the relief sought, the following laws may: Michigan's Gift Promotion Act (MCL 445.931), Michigan's Home Solicitation Sales Act (MCL 445.111, et seq.), Michigan's Home Improvement Finance Act (MCL 445.1101, et seq.). The Federal Trade Commission has a similar rule for sales made at someone's home (16 CFR 429, et seq.), as does the Federal Truth in Lending Act for home equity loans.

These acts require the sellers to provide written notice in the contract of the rights afforded by the acts. If the required notice is not provided by the sellers in the contract, the length of time the consumer has to cancel the contract may be extended.

The lesson: If you engage in a business that sells goods, services or does home improvement (plumbing, electrician, construction, etc.), be sure you have the language required by law in your contracts. Failure to do so could mean the consumer has a broader timeframe in which to cancel the contract.