24 Hour Loans glossary of financial terms

Cancellation Clause

A cancellation clause gives the ability to cancel a contract for a specific financial service/product. It can be used by the person buying the product/service or by the financial institution that sells it. Some cancellation clauses are used as ?cooling off? periods to make sure that consumers are making the right financial decisions. So, for example, you may decide to buy an insurance policy but then realise that you don?t want it. So, you can use your cancellation clause to cancel the policy ? in these cases the clause will only be valid for a specific number of days after you sign up to a product.

Cancellation clauses can also be used to cancel contracts etc., if either the consumer or the product seller does not fulfil their obligations as listed in the terms and conditions. They can also be used if a consumer wishes to stop making payments to a particular product/service. In this instance, for example, you may be charged certain fees before you can cancel the product/service according to the actual cancellation clause involved.