Discussing The Right Of Rescission

June 10, 2005
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Henry Hart III
ATLANTIC CITY, N.J. - Pennsylvania contractors stung by residential customers who back out of contracts and refuse to pay have a weapon to help them fight back - and the same protection may be available to contractors in other parts of the United States.

Henry Hart III, Pennsylvania's senior deputy attorney general, spoke with members of the New Jersey and Pennsylvania chapters of the Plumbing-Heating-Cooling Contractors Inc. (PHCC) during the group's second annual "state-in-state" trade show at the Trump Taj Mahal Casino & Hotel.

Hart said the right of rescission is an answer to "all of the bad contractors out there."

He said that it gives homeowners the right to change their minds and cancel an agreement within 72 hours after it has been signed. Hart passed out a sample of a PHCC contract which contains the right of rescission verbiage:

"You, the owner/tenant may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction; for an explanation of this right, see notice of cancellation form. Canceling after work has begun or after you have waived your right to cancel is unlawful."

Some of the contractors in attendance commented that the right of rescission is harmful to them because it favors the homeowner and leaves contractors with no recourse to collect money that may have been paid for the labor it takes to set up a job. "The law is very protective of the consumer," said Hart. "It was developed to stop unscrupulous contractors."

Other contractors at the seminar questioned how right of rescission can work if a homeowner needs an emergency repair done within 72 hours. Hart revealed a new "Emergency Work Authorization Form." If a customer can't wait for a repair to be completed within 72 hours, he or she can waive the right to cancel the agreement.

But what constitutes an emergency? Hart said, "There should be a threat of serious bodily injury or death. In that case, this is a time where you wouldn't need the emergency work authorization form."

Contractors questioned whether the form was necessary during routine work for customers they know and have worked with in the past. "The handshake has gone the way of the dinosaur," he said. "You are always better off when you can tell a judge, ‘I complied with the law.'"

Hart reminded contractors that his office does not "go out to check and see if all contractors are using these forms." His office only acts when there is a customer complaint.

Some contractors were still not satisfied with what they heard and Hart encouraged them to get behind changes in the laws - changes that make sense to legitimate contractors.

"The original right of rescission law was not drafted with you in mind," he told attendees. "It was drafted to protect against the door-to-door companies."

Publication date: 06/13/2005

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