Door-to-Door Sales Act Flashcards

Which item does NOT have to be on a door-to-door contract?

Answer: The salesperson's commission rate

The contract must show the date, the seller's name and address, and the cancellation notice; commission rates are not required.

The seller never gives the buyer the required Notice of Cancellation. What happens to the cancellation period?

Answer: It does not begin until the proper notice is given

The cancellation period does not start running until the buyer gets the required notice.

Under the federal Cooling-Off Rule, which also covers Maryland sales, what is the minimum price for a sale made at the buyer's home to be covered?

Answer: $25

The FTC rule covers sales of $25 or more made at the buyer's home.

A contractor gets a signed door-to-door contract with a promissory note. When may the seller transfer the note to a third-party lender?

Answer: Not before midnight of the fifth business day after the sale

The seller may not negotiate or transfer the note until after the fifth business day, so the buyer's rights are protected.

A buyer cancels a door-to-door contract. When must the seller cancel any security interest created by the transaction?

Answer: Within 10 business days

Within 10 business days of cancellation, the seller must refund payments and cancel any security interest arising from the sale.

A home improvement salesperson signs a contract at a homeowner's kitchen table and wants to start demolition the next morning. What is the best practice?

Answer: Wait until the cancellation period ends unless there is a valid emergency waiver

Work generally shouldn't start until the cancellation period ends, because the buyer can still cancel without penalty.

How must a buyer give notice of cancellation?

Answer: In writing, for example by mailing or delivering the signed cancellation form or another written notice

The buyer cancels by giving written notice, such as the signed Notice of Cancellation or another written statement.