A rescission period is a consumer protection tool granting a buyer a limited window to cancel specific contracts without penalty. This “cooling-off” period provides a safeguard against high-pressure sales tactics, allowing individuals to reconsider significant agreements away from the seller’s influence. The right is established by law and applies to particular types of transactions.
Nevada Transactions Offering a Right to Cancel
In Nevada, the right to cancel is not universal but is attached to several specific consumer transactions known for high-pressure sales environments. One of the most prominent is the purchase of a timeshare, governed by Nevada Revised Statutes (NRS) Chapter 119A.
Another area involves sales made away from a seller’s typical place of business, such as door-to-door sales. Regulated under NRS 598, this applies to contracts for goods or services costing $25 or more that are finalized at a consumer’s home or another location that is not the seller’s permanent retail establishment. This rule covers products and services like vacuum cleaners and home repair services.
State law also provides cancellation rights for health club and dance studio contracts, which can involve long-term payment plans. Similarly, individuals who purchase memberships in campgrounds are granted a rescission period under NRS Chapter 119B.
Understanding the Time Limits for Rescission
The duration of the rescission period and when it begins varies by the type of contract. For timeshare purchases, Nevada law provides a buyer five calendar days to cancel.1Nevada Legislature. NRS 119A.410 – Right to Cancel Contract of Sale This period starts on the date the purchaser signs the sales contract, and this right cannot be waived. Any attempt by a developer to have a buyer waive this right can make the contract voidable.
For door-to-door sales with a purchase price of $25 or more, the consumer has until midnight of the third business day after signing the contract to rescind.2Nevada Legislature. NRS 598.230 – Right of Buyer to Rescind Contract of Sale; Notice of Rescission
Contracts for health clubs and dance studios also have a three-business-day cancellation window, which begins after the buyer receives a copy of the contract. Likewise, purchasers of membership campgrounds have five calendar days from the date the contract was signed to cancel. This right must be clearly stated in the membership contract.
Steps to Properly Rescind a Contract
To exercise the right of rescission, a consumer must provide written notice of their intent to cancel. Oral cancellations are not sufficient, as the law requires a tangible record. The notice must include the consumer’s name, address, the date of the transaction, and a description of the contract or goods.
The method of delivering the notice is an important part of the process. Notice can be sent by certified mail with a return receipt requested or by an express delivery service that provides proof of service. Hand-delivering the notice is also an option, and these methods create a verifiable record that the cancellation was sent before the deadline.
The cancellation notice must be sent to the correct address. Sellers are required to provide this information within the contract documents, often alongside a “Notice of Cancellation” form that the consumer can use. Failing to send the notice to the specified address could jeopardize the validity of the rescission.
Consequences of a Valid Rescission
When a consumer validly rescinds a contract, the agreement is voided. The consumer cannot be charged any penalty or cancellation fee, and this returns both parties to the financial position they were in before the agreement was made.
The seller must provide a full refund of all payments. For a timeshare, the developer must return all money within 20 days of receiving the notice. For a door-to-door sale, the seller must return payments and any traded-in property within 10 business days. For a health club, the refund must be issued within 15 days.
The consumer must also return any goods received from the seller. For door-to-door sales, the consumer must make the goods available for pickup in substantially as good condition as when received. If the seller does not retrieve the items within 20 days of the cancellation notice, the consumer may keep them without further obligation.