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5 Tips to Get Out of a Contract

By Brett Snider, Esq. | Last updated on

We sign so many things every day that it's almost inevitable that you will sign a contract -- and then later want to get out of it.

In general, consumers should be very careful when signing on the dotted line. But there are some legal options available if you need to cancel a contract.

For those times when either life or your mind changes, here are five tips for getting out of a contract:

  1. Send a letter requesting to cancel the contract. Business owners need goodwill in order to grow their businesses, so it doesn't hurt to ask them in writing to cancel a contract for a small fee -- or possibly even for free. Oftentimes, it's cheaper for the company to let you off the hook than to sue you for breach of contract.

  2. The FTC's "cooling off" rule. The Federal Trade Commission has implemented a rule that allows consumers to "cool off" on purchases of $25 or more. This applies to cancelling purchases made outside the seller's general place of business within 72 hours of the deal. Under this rule, a salesperson must tell you about your cancellation rights prior to the sale and provide you with cancellation forms.

  3. Check your state's consumer-protection laws. Many states have consumer-rights laws which are more expansive and generous than the FTC's when considering cancelling a contract. For example, California law allows up to five days for a consumer to cancel a contract with certain businesses.

  4. Breach the contract. You can choose to breach a contract with a company by either not paying your monthly bills or not providing full payment for a purchase. Most consumer contracts require that breaching parties attend arbitration, where you will work out a monetary amount to settle the contract issue.

  5. Talk to an attorney. If this is a high stakes contract and you're unsure about the laws where you live, you may want to consult an attorney. Getting professional advice can save you money in the long run.

Entering into a signed agreement is serious business, but there are potential ways to get out of a contract if circumstances change. To learn more about contracts, check out FindLaw's comprehensive section on Contract Law.

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