Screen a door-to-door sale for the three-business-day cancellation notice

Key facts

Human involvement

Yellow · Close supervision

How AI is used

From the script and the contract, record where the buyer's agreement was made, the purchase price, the date of the transaction, and the cancellation wording printed on the contract or receipt. Record whether the file describes one of the exclusions in the definitions, including a sale conducted entirely by mail or telephone, a sale of real property, insurance, or securities by a registered broker-dealer, or a transaction the file says is already covered by the credit rescission statute. Do not decide that the rule applies.

What the lawyer must review

The lawyer applies 16 CFR 429.0 and 429.1. A door-to-door sale is a sale, lease, or rental of consumer goods or services in which the seller or a representative personally solicits the sale, including after an invitation by the buyer, and the buyer's agreement or offer to purchase is made at a place other than the seller's place of business, with a purchase price of $25 or more if the sale is at the buyer's residence, or $130 or more if it is at another location. The definition's examples include the buyer's residence and facilities rented on a temporary or short-term basis, such as hotel or motel rooms, convention centers, fairgrounds, and restaurants, and the buyer's workplace or a dormitory lounge. The definition excludes the six classes in paragraphs (a)(1) through (a)(6), including prior negotiations at a fixed retail establishment, a transaction in which the consumer has the right of rescission under 15 USC 1635 or regulations under it, a handwritten emergency waiver, a sale conducted and consummated entirely by mail or telephone without other prior contact, a buyer-initiated repair visit on the conditions stated, and a sale of real property, insurance, or securities or commodities by a broker-dealer registered with the Commission. Consumer goods or services are those purchased, leased, or rented primarily for personal, family, or household purposes, including courses of instruction or training. In connection with any door-to-door sale, it is an unfair and deceptive act or practice for a seller to fail to furnish, at the time of execution, a fully completed receipt or copy of the contract in the language principally used in the oral presentation, showing the date and the seller's name and address, and, in immediate proximity to the signature space or on the front of the receipt, in bold face of at least 10 points, a statement in substantially the form the rule sets out: the buyer may cancel at any time prior to midnight of the third business day after the date of the transaction. The seller must also furnish a completed duplicate notice headed NOTICE OF RIGHT TO CANCEL or NOTICE OF CANCELLATION, stating that the buyer may cancel without any penalty or obligation within three business days from the date of the transaction. A business day is any calendar day except Sunday or a federal holiday. Saturday is not excluded by that definition. The lawyer decides whether the sale is a door-to-door sale and whether the papers meet the rule.

Written for / version

United States versionUS