Texas Property Code 5.074 – Purchaser’s Right to Cancel Contract Without Cause
(a) In addition to other rights or remedies provided by law, the purchaser may cancel and rescind an executory contract for any reason by sending by telegram or certified or registered mail, return receipt requested, or by delivering in person a signed, written notice of cancellation to the seller not later than the 14th day after the date of the contract.
(b) If the purchaser cancels the contract as provided by Subsection (a), the seller shall, not later than the 10th day after the date the seller receives the purchaser’s notice of cancellation:
(1) return to the purchaser the executed contract and any property exchanged or payments made by the purchaser under the contract; and
(2) cancel any security interest arising out of the contract.
Terms Used In Texas Property Code 5.074
- Contract: A legal written agreement that becomes binding when signed.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Property: means real and personal property. See Texas Government Code 311.005
- Signature: includes the mark of a person unable to write, and "subscribe" includes the making of such a mark. See Texas Government Code 312.011
- Signed: includes any symbol executed or adopted by a person with present intention to authenticate a writing. See Texas Government Code 311.005
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) The seller shall include in immediate proximity to the space reserved in the executory contract for the purchaser’s signature a statement printed in 14-point boldface type or 14-point uppercase typewritten letters that reads substantially similar to the following:
YOU, THE PURCHASER, MAY CANCEL THIS CONTRACT AT ANY TIME DURING THE NEXT TWO WEEKS. THE DEADLINE FOR CANCELING THE CONTRACT IS (date). THE ATTACHED NOTICE OF CANCELLATION EXPLAINS THIS RIGHT.
(d) The seller shall provide a notice of cancellation form to the purchaser at the time the purchaser signs the executory contract that is printed in 14-point boldface type or 14-point uppercase typewritten letters and that reads substantially similar to the following:
(date of contract)
NOTICE OF CANCELLATION
YOU MAY CANCEL THE EXECUTORY CONTRACT FOR ANY REASON WITHOUT ANY PENALTY OR OBLIGATION BY (date).
(1) YOU MUST SEND BY TELEGRAM OR CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, OR DELIVER IN PERSON A SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE TO (Name of Seller) AT (Seller’s Address) BY (date).
(2) THE SELLER SHALL, NOT LATER THAN THE 10TH DAY AFTER THE DATE THE SELLER RECEIVES YOUR CANCELLATION NOTICE:
(A) RETURN THE EXECUTED CONTRACT AND ANY PROPERTY EXCHANGED OR PAYMENTS MADE BY YOU UNDER THE CONTRACT; AND
(B) CANCEL ANY SECURITY INTEREST ARISING OUT OF THE CONTRACT.