First, here’s an important update on the FTC’s Click-to-Cancel Rule. It was to have taken effect May 15, 2025. The FTC has delayed enforcement until July 15, 2025, to give companies more time to comply. The Click-to-Cancel Rule requires making it as easy to cancel a recurring subscription of any kind (auto-ship of vitamins, gym membership, meal plan, etc.) as it was to sign up for the subscription. Meanwhile, read before you subscribe. Some companies have already complied.
But what if you want to cancel another type of contract? Most of the time, a contract is binding once agreement is reached, and you cannot cancel it. There are exceptions, though, under federal or NC law, where you can cancel a contract in a short period of time, usually 3 business days. The seller is required to tell you about the right to cancel these transactions, but you have that right even if the seller fails to disclose it.
Which contracts can be canceled shortly after you make them?
1. Some loans secured by your residence – a mortgage refinance or a home equity loan. (Note cancellation isn’t available for the purchase or construction of a home.)
2. Mobile homes, if purchased from a dealer.
3. Timeshares, if purchased from a developer.
4. Campground memberships longer than a year, if purchased from the campground operator.
5. Home solicitation sales or other sales away from the seller’s normal place of business, like at fairs, if the sale was over $25. (However, the right to cancel does not apply to sales or rentals of real estate, sale of insurance or securities, sales made entirely by phone or by mail, or sales made elsewhere after negotiating the deal at the seller’s normal place of business.) If goods aren’t delivered within 30 days of a home solicitation contract and delay is the seller’s fault, a separate law allows you to cancel any time before delivery, unless you have agreed in writing to a later delivery schedule.
6. The start-up of prepaid entertainment contracts like gym memberships, martial arts classes, or dating/social clubs. (You’ll need the FTC Click-to-Cancel Rule if you are already in these contracts and want to stop them.)
7. The start-up of food contracts like purchasing meat in bulk or home delivery of food. (You’ll need the FTC Click-to-Cancel Rule to cancel a recurring subscription once you are in the contract.)
8. Discount Buying Clubs.
9. Credit Repair Services.
How do you cancel a contract in this list? Cancellation must be in writing to the address (or perhaps email address) listed in the contract; follow those directions exactly. Most commonly, the cancellation period ends at midnight on the third business day after the contract is entered, but read the contract. Canceling a contract means getting your money refunded and not having to make future payments. As part of cancellation, you must return products at your expense, in as good a condition as you received them.
Notice that this list doesn’t include the purchase of a new or used vehicle. NC’s Lemon Law allows canceling the purchase of a new vehicle after a certain number of unsuccessful efforts to repair a serious problem. There is no Lemon Law for used cars, even those purchased from dealers. Many used car dealers include some type of warranty (which doesn’t allow cancellation, but covers the cost to fix problems arising soon after purchase). Some new and used car dealers advertise that you can return a car within a set time to exchange it for another vehicle. That is at least a helpful alternative to keeping a vehicle you don’t like. A dealer must honor any policy they advertise.
If you have problems canceling a contract, try contacting the NC Attorney General’s Office at 1-877-5-NO-SCAM. They may be able to help you without having to hire an attorney.
Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough. She can be reached at (919)732-7300 or kim.steffan@steffanlaw.com.