Subscribe to this blog by Email

Your email:

Browse by Tag

Posts by Month

call 1.800.820.5656

ACT Contractors Forms... From The Paper Side of Contracting.

Current Articles | RSS Feed RSS Feed

Contractor Forms MUST include the 3-day Right to Cancel Home Improvement Contracts

     Your contractor forms must take into account the federal contractor cancelling an agreementand state laws regarding the 3-day cancellation rights of the consumer. Known by many names such as  the "3-day cooling off period", "3-day right of rescission" or "3-day right to cancel", this requirement causes a lot of confusion among contractors. If you do home improvement work, your home improvement contract must comply with this consumer right. 

     DID YOU KNOW that it doesn't matter what state you live in, the Federal Government has ruled that ANY Home Improvement Contract signed in your customer's home must give the customer the right to cancel the contract within 3 business days after they sign FOR ANY REASON. This applies to any job whose value is $25 or more.


     DID YOU KNOW that a customer who is entitled to the rights offered by the 3-day cancellation rule and who is not properly notified of these rights has THE RIGHT TO CANCEL the contract ANYTIME until 3 business days after they receive proper notification of this right???

So... You work on the job for a week. The customer wanted to cancel the contract the day after they signed but because you did not notify them that they can, they didn't think they could.  A friend tells them about the 3-day right to cancel. They call their attorney and ask him about their rights. He explains their cancellation rights and because your contract does not include the proper notifications, tells them to go ahead and cancel NOW! You have one of two choices.

  • TRY and sue them for the money they owe you for the completed work, lose, then eat all your expenses and costs on the job PLUS PAY YOUR ATTORNEY FEES, PLUS you will probably PAY THEIR ATTORNEY FEES!

It is important to understand that the FEDERAL rule regarding the 3-day right to cancel is the MINIMUM rule that every state MUST follow.  Each state can ADD to the minimum federal rule to give even more rights to the consumer... and most states DO!

If you would like to know more about whether this cancellation rule applies to your business and about further requirements of this rule, please click on the following link to download our FREE white paper on the 3-day cancellation rule.





There are likely thousands if not hundreds of thousands of small contractors violating the 3 day right to cancel by executing and completing incomplete contracts liking details and the tear off 3 day right to cancel form. My sister recently had a contractor execute an incomplete contract without a 3 day right to cancel form and the job was very unsatisfactory and over priced. The contractor had no idea of what the 3 day right to cancel form was or at least that is what he so claimed. My sister is elderly and has memory problems and the contractor should not of even attempted a contract with her. I had to step in and help my sister in talking with the contractor to get a settlement and refund.
Posted @ Thursday, November 18, 2010 12:00 AM by Paul Gardner
Be careful of "tear off" 3-day cancellation forms that are part of the main contract. We see too many home improvement contracts being used with the 3-day right to cancel form on the back of the contract. The Federal rule states that the form should be "attached" to the contract but must be "easily detachable". This means that when the 3-day cancellation form is printed on the back of the contract, the consumer must tear the contract apart to remove the form and send it to the contractor should they wish to cancel... certainly this is not "easily detachable". The 3-day cancellation form should be on a separate page and be "attached" to the contract physically and by reference in the contract! For example, a contract reference such as a statement like "see attached notice of cancellation form" or by numbering the pages of the contract and including the cancellation forms in the contract numbering... or better yet, both methods.
Posted @ Monday, November 29, 2010 1:07 PM by Bill Baird
A contractor gave me an offer that I thought was a good deal. The more I looked into it after he left, I found it wasn't such a good deal. I told him, I changed my mind and according to him, I can't change my mind. I just found out about the "cooling off" and my contractor will not refund my 50% down payment. Hoping he will return my money.
Posted @ Friday, June 29, 2012 4:43 AM by Yvonne
The 3 day right does not apply to contracts in which the buyer invites the sales person to their home. Read exclusions.
Posted @ Monday, December 10, 2012 8:03 AM by Doug
Doug... This is wishful thinking on your part...the law MOST DEFINITELY applies whenever a sales person negotiates and signs the agreement (contract)at the persons home... it doesn't matter if the sales person was called out for the estimate by the customer or knocked on their door in a "cold call". The ONLY exclusion or exception to the 3 day right to cance a home improvement contract of any type is when the contract is negotiated and signed someplace other than the clients home. For example, a customer goes to a flooring showroom to look at carpet. The salesman at the flooring showroom is told the customer needs 100 sq yards of carpet installed over a wood floor. The salesman shows them some samples, gives them some prices, and the customer agrees to have 100 sq yards of carpet X installed and signs a simple sales order and install agreement. In this case... because the agreement was negotiated and signed in a place "other than the persons home"... the three day right to cancel does not apply.  
You are headed for a BIG fall if you believe the 3 day right to cancel does not apply in your case... when the customer CALLS YOU out to their home.
Posted @ Monday, December 10, 2012 4:03 PM by Bill Baird
I respectfully disagree. I have just won 2 cases in which the courts determined that because of the customer inviting me into there home that there was indeed no 3 day right of recission.
Posted @ Friday, March 08, 2013 8:01 AM by Doug
Post Comment
Website (optional)

Allowed tags: <a> link, <b> bold, <i> italics