What Are Some Ways that You Can Get Out of a Contract in Maryland?

The State of Maryland offers a few opportunities for its citizens to escape contracts by cancelling shortly after they are executed. While these opportunities only exist in limited circumstances, they can be beneficial when you find yourself regretting a recent purchase or subscription.

If you feel that a contract doesn’t suit your needs or you find yourself unable to fulfill the terms of the contract, you can offer to renegotiate with the other party or simply breach. However, you should be aware of the legal ramifications that may befall you should you take that path.

No matter what contracts you may have agreed to, it is always a good idea to have one of our dedicated Maryland contract lawyers examine the terms so that we can provide you with all of your options. To get a free initial case evaluation today, call the Heyman Law Firm at (410) 305-9287.

How Long Do You Have to Cancel a Contract in Maryland?

Valid contracts consist of three key criteria: offer, acceptance, and consideration (the exchange of something of value from both sides). Once a contract is signed in Maryland, it is typically binding. Maryland has very few laws that allow a person to cancel an accepted contract. The one notable exception is the Door-to-Door Sales Act. People in Maryland are also beholden to the Federal Trade Commission’s rule on “cooling off periods,” which only applies in certain cases.

Door-to-Door Sales Act

Under the Door-to-Door Sales Act, a door-to-door salesperson must provide the buyer with a Notice of Cancellation whenever they make a sale. The Notice of Cancellation informs the buyer that they have the right to cancel the deal within the next five business days. The time period extends to seven business days if the buyer is age 65 or older.

If the buyer properly cancels the sale, they must return any products purchased in good condition, and the seller must return any payments made within 10 business days of the cancellation.

Cooling Off Period

According to FTC guidance, buyers have the right to go back on a contractual agreement for a short length of time after they sign it. This time frame is called the “cooling off period,” and generally lasts for three days after the execution of the contract. The rule is most useful for consumers who enter into contracts with retailers or other businesses.

However, the cooling off period only applies to a few types of contracts. Generally, there is no leniency for people who enter contracts to revoke them in the days after.

Examples of contracts that are subject to the cooling off period include memberships at health clubs, gyms, self-defense centers, or weight-loss centers, as well as vacation memberships and timeshares. For contracts for home improvements, the buyer may cancel the contract for a period of five days, seven days if they are age 65 or older.

Below are some common contractual situations that are not subject to cancellation within the three-day cooling off period:

• Contracts for less than $25 made at your residence
• Contracts for less than $130 made at temporary locations
• Contracts for goods or services that are not intended for personal or family purposes
• Sales made online or by phone
• Sales resulting from negotiations at the seller’s primary place of business where goods are sold regularly
• Sales made as part of a request that the seller do repairs or maintenance on personal property

What Is Breach of Contract in Maryland?

When one of the parties to a contract fails to live up to their promises in the contract, they are technically in breach of contract. If you breach your contract, you technically don’t have to perform your side of the contract. However, breach is not a way to get out of a contract entirely, since the other side could (and most likely will) file a lawsuit against you.

Breach of contract is grounds for a lawsuit in Maryland. This means that if you sign a contract and then go back on it, the other party may decide to take you to court to either restore the value that they lost or to ask the court to force you to honor the terms of the contract.

In a breach of contract lawsuit, the court’s goal is to put the non-breaching party in a fair position. But this could mean many different things depending on the type of contract and breach. The non-breaching party could seek either damages, monetary restitution, or specific performance.

For instance, let’s say that a merchant agreed to provide a restaurant with 50 chairs in exchange for $5,000, to be delivered and paid for on Wednesday. When the delivery date arrives, the merchant arrives at the restaurant with the 50 chairs, but the restaurant owner is unable to pay the $5,000 that they owe. The restaurant owner is in breach of the contract, and the merchant takes the restaurant owner to court.

Damages

If the merchant declined another contractual opportunity with a different restaurant in reliance on this contract, they could seek the lost value that they passed up on in their lawsuit. But if there was no other opportunity, or if the opportunity wouldn’t have prevented them from completing this order, these damages won’t be available to them.

Monetary Restitution

They could also seek compensation for the work hours and materials used. However, the merchant also has a duty to mitigate their damages (or sell the chairs to someone else). If the merchant can sell the chairs for the same price, they have no damages to claim.

Specific Performance

Separately from monetary damages, a non-breaching party may also seek specific performance. When a court grants specific performance, it orders the breaching party to honor the terms of the contract. This is a unique and rare form of action and is most commonly seen in breaches in contract for real estate. A court likely wouldn’t grant the non-breaching merchant specific performance, but it might grant specific performance to the restaurant if the merchant had been the party in breach. In that case, the merchant would be forced to deliver the chairs.

Renegotiation

There is always the possibility that the best resolution for both parties is not going through the court. It may make more sense to alter the terms of the contract so that both sides are able to perform and suffer the least damage possible. To use the example above, if the merchant is only able to produce 40 chairs by the deadline, the two parties could renegotiate the purchase price of the lower number of chairs and enter a contract that reflects the changed circumstances.

Call the Heyman Law Firm Today for Help Terminating a Contract in Maryland

If you feel like you are stuck in a bad contract, you have legal options available to you to make your situation better. Find out how by calling the experienced Columbia, MD contract attorneys at the Heyman Law Firm at (410) 429-7856.