What Your Home-Improvement Contract Must Say, When the Customer Can Walk, and Whether You Can Charge for It

Quick answer: Any sale of $25 or more made at a customer's home gives the customer until midnight of the third business day to cancel for a full refund, under the federal Cooling-Off Rule, unless the customer initiated the visit for a repair and you sold nothing beyond that repair, or the customer signed a dated emergency waiver. Twenty jurisdictions layer their own contract rules on top: California, Maryland, Massachusetts, Maine, Pennsylvania, New Jersey, New York, Connecticut, Illinois, Ohio, Tennessee, Vermont, Virginia, Washington, Texas, Hawaii, Indiana, Wisconsin, Michigan and the District of Columbia each prescribe what a residential contract must contain, and Connecticut and Pennsylvania make every home-improvement contract cancellable for three business days regardless of where it was signed. A cancellation or no-show fee is enforceable only as liquidated damages agreed in a signed contract, after the cancellation window has closed, and never against a customer exercising a statutory right to cancel.

The federal floor: 16 CFR Part 429

The Federal Trade Commission's Cooling-Off Rule applies in every state. It covers a "door-to-door sale," defined as a sale of consumer goods or services in which "the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller" and "which has a purchase price of $25 or more if the sale is made at the buyer's residence or a purchase price of $130 or more if the sale is made at locations other than the buyer's residence." A quote signed at the kitchen table is a door-to-door sale.

What you must do. Furnish a receipt or contract, in the language of the sales presentation, that states in bold 10-point type: "You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction." Attach two copies of a completed "Notice of Cancellation" form. Tell the buyer orally about the right to cancel. Do not misrepresent it. If the buyer cancels, refund within ten business days and cancel any security interest. Do not assign the contract to a lender before the fifth business day.

Business day. "Any calendar day except Sunday or any federal holiday." Saturday counts.

The exclusions that matter to service contractors. The rule does not apply to a sale:

• made entirely by mail or telephone with no prior personal contact;
• completed at the seller's fixed place of business after the buyer visited it;
• "in which the buyer has initiated the contact and the goods or services are needed to meet a bona fide immediate personal emergency … and the buyer furnishes the seller with a separate dated and signed personal statement in the buyer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within 3 business days";
• "in which the buyer has initiated the contact and specifically requested the seller to visit the buyer's home for the purpose of repairing or performing maintenance upon the buyer's personal property."

That last exclusion has a carve-back that catches technicians who upsell: "If, in the course of such a visit, the seller sells the buyer the right to receive additional services or goods other than replacement parts necessarily used in performing the maintenance or in making the repairs, the sale of those additional goods or services would not fall within this exclusion." The furnace repair the customer called about is excluded. The new system you sold on the same visit is a door-to-door sale with a three-day right.

Errata: what the ranking pages get wrong

State contract statutes: what the document must contain

Confidence H means the statute or regulation was read; M means an official summary or mirror.

The right to cancel, state by state

Can you charge a cancellation or no-show fee?

No state statute we found authorizes a specific cancellation fee for home-service work, and none prohibits one outright. Whether a fee holds up turns on four questions.

1. Is the customer inside a statutory cancellation window? If the contract was signed at the home and three business days have not passed, the federal rule requires a full refund of "all payments made," and Connecticut and Pennsylvania extend that to every home improvement contract wherever signed. No fee of any kind survives a timely statutory cancellation. In California a senior has five days.

2. Was the fee agreed in writing before the appointment? A cancellation or no-show charge is a contract term. If it is not in a document the customer signed or affirmatively accepted (a booking confirmation with the policy stated and a required acceptance counts), there is no agreement to enforce. Virginia's contract regulation, Pennsylvania's "entire agreement" requirement and Connecticut's "contains the entire agreement" clause all mean a fee mentioned only on an invoice after the fact is not part of the contract.

3. Is the amount a reasonable estimate of your loss? Courts treat cancellation fees as liquidated damages: enforceable when the actual loss is hard to measure and the amount is a reasonable forecast, void as a penalty when it is not. California codifies this for consumer contracts: a liquidated-damages clause "is void except that the parties to such a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage" (Civ. Code §1671(d)). A trip fee equal to your diagnostic charge, or a late-cancellation fee tied to a lost booking slot, fits. A fee equal to the full job price for a cancelled estimate does not.

4. Can you actually collect it? Charging a card on file for a no-show requires that the cardholder agreed to the policy and the charge at the time the card was stored; card-network rules require the cancellation policy to be disclosed before the customer consents, and an undisclosed fee is the easiest chargeback a customer will ever win. A fee you cannot charge to the card is a small-claims matter, and in the states listed in section 3 an unlicensed contractor cannot sue to collect at all.

A clause that works.

Appointments. Estimates and service appointments may be cancelled or rescheduled without charge up to 24 hours before the scheduled start. Cancellations with less than 24 hours' notice, or failure to provide access at the scheduled time, incur a fee of $____, which the parties agree is a reasonable estimate of the Company's lost scheduling and travel costs and not a penalty. This fee does not apply to any cancellation made under a statutory right to cancel, including the three-business-day right described in the attached Notice of Cancellation [five business days for customers 65 or older in California].

Put the clause in the booking confirmation the customer accepts and in the signed contract, state the dollar amount, and keep it proportionate.

The contract checklist that satisfies every state

A contract with these elements meets the strictest statute in each category and will not be the reason you lose a dispute.

1. Heading identifying the document as a home improvement contract (California requires the words "Home Improvement" in 10-point bold).
2. Date of the transaction.
3. Your legal business name, physical address (not a P.O. box alone), phone, email, and license or registration number. New Jersey also wants your insurance certificate and the insurer's phone number attached.
4. Customer name and the property address.
5. Description of the work, the significant materials and equipment (make and model where applicable), and the specifications. A statement that specifications change only by signed written change order.
6. Total price, or the basis for calculating it. For time-and-materials, an initial written estimate; Pennsylvania caps the final cost at 110% of the estimate without a change order.
7. Down payment amount, stated as a dollar figure and listed separately from any special-order materials advance. Cap it at the figure in your state (see the companion reference on deposit limits).
8. Progress-payment schedule, each payment "as a sum in dollars and cents" tied to a described stage of completion, with none exceeding the value of work performed.
9. Approximate start and substantial-completion dates, and the contingencies that could move them.
10. Statement of permits required and who obtains them.
11. Insurance statement: liability and workers' compensation carried, with amounts.
12. Warranty statement (Maine requires one; everyone benefits).
13. Mechanics lien warning (California, New York, Washington, Texas and Hawaii each prescribe language).
14. Notice of the right to cancel, in the statutory wording and type size, with two copies of the Notice of Cancellation form attached, and the senior-citizen variant in California.
15. Cancellation and no-show fee clause as in section 5, expressly subordinate to the statutory right.
16. Dispute-resolution clause. Pennsylvania voids arbitration clauses that are not in capitals, 12-point bold, on a separate page, separately signed, and explicit about whether the award is binding.
17. Signatures of the owner and the contractor, with a completed copy delivered at signing (California, Connecticut, Pennsylvania and Minnesota require it).
18. None of the clauses Pennsylvania lists as voidable: hold-harmless, waiver of code requirements, confession of judgment, jury waiver, wage assignment, no-claim-or-defense, contractor attorney-fee awards, collection-liability releases, waivers of statutory rights, or auto-renewal without an opt-out.

Method and limits

We read the federal rule at Cornell's Legal Information Institute and each state statute or regulation at the legislature's host, the licensing board's published copy, or, where those block automated access, a code mirror, on the dates shown. States not listed in section 3 have no home-improvement-contract statute we could locate; their general consumer-protection and home-solicitation acts still apply, and most mirror the federal three-day rule. We did not research municipal contract rules (New York City's Department of Consumer and Worker Protection, for example, prescribes its own contract form). Case law on liquidated damages varies by state and is summarized, not surveyed.

Last verified 2026-10-25. Not legal advice.