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The Three-Day Right to Cancel a Purchase

Money & Debt

This article explains how the three-day right to cancel a purchase works and when it applies. 

Many buyers believe that they have a three-day right to cancel any and all consumer purchases. However, this is not true. Buyers only have this right in certain situations. This article explains what the three-day right to cancel a purchase is and when it applies.   

Special thanks to the Office of the Attorney General of Texas. This article was originally adapted from content by that agency.

What is the three-day right to cancel a purchase?

This is also sometimes called the three-day right of rescission. This is the right to cancel a purchase, without penalty, within three business days.   

Can I cancel any purchase within three days?  

No. This right only applies to purchases that meet the following criteria:   

  • The seller solicits a buyer at a place other than the seller’s place of business. For example, a seller selling goods or services at a temporary location, an event, or the buyer’s home. 

  • The buyer makes the agreement or offer to buy at a place other than the seller’s place of business. 

  • The goods or services are worth more than $25 or the amount of real estate is worth more than $100.    

See Texas Business and Commerce Code 601.002 (a).

What purchases cannot be canceled under the three-day rule?   

The following purchases and scenarios are ineligible for cancellation under this rule:  

  • Sales of insurance or farm equipment     

  • A sale where an attorney or broker assists in the transaction  

  • Sales made as a result of prior negotiations at the seller's place of business; and,

  • Sales made entirely by mail or telephone, with no other contact between the buyer and seller. 

See Texas Business and Commerce Code 601.002 (b).

Is the seller required to do anything during the sale?

Yes. The seller must tell the buyer that they have the right to cancel the sale within three business days. The seller must do this both orally and in writing. The seller must also give you a contract or receipt stating the following:   

  • the date of sale  

  • the name and address of the seller  

  • a statement of your right to cancel the contract  

  • the address where you must send your cancellation notice.  

The contract or receipt and the notice of your right to cancel must be in the same language used to make the sale. For example, if Spanish was spoken during the sale, the contract and notice must be in Spanish.  

See Texas Business and Commerce Code 601.052 (a).

How do I cancel a purchase within three days?

You must cancel the transaction in writing. You must send the signed and dated cancellation form to the seller at the address provided by the seller. You must send the form no later than midnight on the third business day after the transaction. Keep a copy of your cancellation form for your records.  

See Texas Business and Commerce Code 601.051.

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