NEWS & INSIGHTS

Resolving a Model-Home Contract After Reviewing the Statutory Right of Withdrawal

1. Facts and Background

After receiving an advertising message and making contact, A visited a model home as instructed and entered into an agreement there. A later sought to withdraw. A retained LK Partners LLC to assess the burdens of maintaining the contractual relationship and the legal and negotiated options for ending it.

2. Key Legal Issues

First, it was necessary to determine whether the withdrawal provisions of Article 8 of the Act on Door-to-Door Sales, Etc. applied. Second, A's status as a consumer under that Act had to be examined, because a contract made for investment purposes may present a disputed consumer-status issue. Third, if the Act applied, the commencement of the withdrawal period had to be determined: generally 14 days from receipt of the written agreement, or, where the agreement omitted required withdrawal information, 14 days from the date A knew or could have known that withdrawal was available. Fourth, the method of communicating withdrawal had to minimize later disputes.

3. Work Performed and Outcome

LK Partners LLC (i) fixed the timeline from receipt of the advertisement through the visit, contracting, and payment; (ii) confirmed when the contract document was delivered and whether withdrawal information was provided; (iii) clearly communicated the withdrawal by content-certified mail and demanded return of all payments; and (iv) prepared cancellation and rescission/termination claims in the alternative. The withdrawal was recognized, the agreement was treated as never having taken effect, and all payments were returned. This case demonstrates the need to coordinate the formation history, contract language, performance stage, and evidence. The key issues are whether the statutory withdrawal regime applies and when the period began. Because the period is case-specific, the intention to withdraw should be recorded in writing without delay.