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Question on 3 day notice of cancellation
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Ken;
When a potential subscriber contacts an alarm company for an upgrade or switchover, typically the company either sends a salesman to the house for an estimate, or a tech with a pre-negotiated contract at the time the work is going to be performed. Since the contract is signed with the company representative in the home the 3 day cooling off period kicks in, which I believe means if the tech did work at the same time as the contract signing the subscriber would be within legal rights to change their mind about the work and the company may not be able to enforce the contract or possibly get paid for the work being done. If the company negotiates the deal over the phone and uses an Esigned contract does the 3 day rule still apply?
Mark S. Fischer
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Answer
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The 3 day notice of cancellation is tricky and confusing. Furthermore, each state has its own version, which is one reason we need to prepare separate contracts state to state. You can check out your state's cancellation notice requirements here https://www.kirschenbaumesq.com/page/alarm-law-issues
The right to cancel generally applies to "door to door" sales. New York is typical, so I'll use the New York statute:
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. "Door-to-door sale" shall mean a sale, lease or rental of consumer goods or services in which the seller or his representative personally solicits the sale, including those in response to or following an invitation by the buyer, and the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller. The term "door-to-door sale" does not include a transaction:
(a) made pursuant to prior negotiations in the course of a visit by the buyer to a retail business establishment having a fixed permanent location where the goods are exhibited or the services are offered for sale on a continuing basis; or
(b) in which the buyer has initiated the contact and the goods or services are needed to meet a bona fide immediate personal emergency of the buyer, and the buyer furnishes the seller with a separate dated and signed personal statement in the buyer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within three business days; or
(c) conducted and consummated entirely by mail or telephone; and without any other contact between the buyer and the seller or its representative, other than at the place of business of the seller, prior to delivery of the goods or performance of the services; or
(d) in which the buyer has initiated the contact and specifically requested the seller to visit his home for the purpose of repairing or performing maintenance upon the buyer's personal property. If in the course of such a visit, the seller sells the buyer the right to receive additional services or goods other than replacement parts necessarily used in performing the maintenance or in making the repairs, the sale of those additional goods or services would not fall within this exclusion; or
(e) pertaining to the sale or rental of real property, to the sale of insurance or to the sale of securities or commodities by a broker-dealer registered with the securities and exchange commission; or
(f) where the purchase price whether under single or multiple contracts, does not exceed twenty-five dollars and the products, goods, or merchandise purchased is capable of delivery at one time.
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As you can see, there is no need for a cancellation right if you're called to the premises to make a repair. You end up selling a new system, better give the cancellation notice. Telephone or mail sales don't require the notice unless there has been contact anywhere other than the seller's place of business. Thus, if you're at a trade show or hotel or shopping mall selling your services, you need to give the 3 day notice of cancellation.
New York has a separate provision for PERS contracts. Those contracts require a 7 day notice of cancellation, no matter how or where they are negotiated and executed.
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Webinars
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Title: What a Security Alarm company needs to know before attempting Commercial Fire Alarm Installations
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Who should attend: Alarm company owners and fire techs.
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