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The 3-day right to cancel, for contractors

Sign a job at the kitchen table and the customer may have three business days to change their mind. Here's what the federal rule requires.

Published November 4, 2026 · by Settle

Quick answer

Under the FTC's Cooling-Off Rule (16 CFR Part 429), when you personally sell goods or services at the customer's home for $25 or more ($130 or more at other places away from your business), the customer can cancel within 3 business days. You must tell them about that right out loud, put it in the contract or receipt, and give them two copies of a Notice of Cancellation. If they cancel, you refund within 10 business days. Genuine emergencies, with a handwritten waiver from the customer, are an exception. Many states add their own rules on top.

When the rule applies

  • You sell in person, away from your place of business. The customer agrees at their home, or at a temporary location like a home show.
  • The price is $25 or more at the home, or $130 or more at other locations. These thresholds took effect in March 2015.
  • It's consumer goods or services, bought for personal, family or household use.

What you have to do

  1. Tell the customer out loud, when they sign, that they can cancel.
  2. Include the cancellation right in the contract or receipt, in the same language as the sales presentation.
  3. Hand over two copies of a Notice of Cancellation (or "Notice of Right to Cancel"), filled in with the date and the deadline, so they can mail one back.
  4. If they cancel, refund within 10 business days and return any trade-in, and tell them within that time whether you'll pick up any goods you delivered.

The main exceptions

  • Emergencies. If the customer needs the work right away to meet a genuine emergency, they can waive the right with a separate, dated, signed statement in their own handwriting describing the emergency. Pre-printed waivers don't count.
  • Repairs to the customer's personal property they asked for. If the customer contacted you and asked you to come to their home to repair or maintain their personal property, the sale is excluded, but anything you sell beyond replacement parts is still covered.
  • Small sales under the thresholds, sales at your place of business, and some others like real estate and insurance.

State rules can go further

Many states have their own home-solicitation or home-improvement cancellation laws, with their own forms, longer periods for some buyers, or required wording. The federal rule is the floor. Check your state contractor board or attorney general before you finalize your contract.

Practical habits

  • Don't start work or order special materials during the 3 days unless an exception clearly applies.
  • Keep a Notice of Cancellation form ready to hand over whenever you sign at the customer's home.
  • Hold the deposit until the window closes, or be ready to refund it within 10 business days.

In Settle

Settle writes and sends the estimate, and records when the customer approves it. It doesn't generate a Notice of Cancellation for you, so if the rule applies to a job, hand over the form yourself and note the cancellation deadline in the estimate's notes, which print on the PDF and show on the customer's estimate page.

Does the 3-day cancellation rule apply to contractors?

It can. If you sell consumer goods or services for $25 or more at the customer's home, the FTC Cooling-Off Rule generally gives the customer 3 business days to cancel, with some exceptions.

What do I have to give the customer?

An oral explanation of the right, a contract or receipt stating it, and two copies of a completed Notice of Cancellation.

How fast do I have to refund?

Within 10 business days after you receive the cancellation.

Can the customer waive the 3 days?

Only for a genuine emergency, with a separate, dated and signed statement in the customer's own handwriting describing it.

This guide is general information, not legal advice.

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