The three-day right to cancel

The federal Cooling-Off Rule gives customers three business days to cancel certain sales personally solicited and agreed away from the seller’s place of business. It can cover a sale at a homeowner’s request, but location alone does not decide coverage. Check the transaction, exceptions and state rules before completing the notices or scheduling work.

Which sales does the federal rule cover?

The federal version is the FTC's Cooling-Off Rule, 16 C.F.R. Part 429. Stripped down, it covers a sale of consumer goods or services where the seller personally solicits the sale and the buyer's agreement to buy is made somewhere other than the seller's place of business — usually the buyer's home, but the rule also names temporary spaces like hotel and motel rooms, convention centers, fairgrounds and restaurants, plus the buyer's workplace. Where it applies, the buyer gets three business days to cancel for no reason at all, and the seller must hand over written notice of that right at signing.

Read the definition closely on one point, because it is the point contractors get wrong: it reaches sales made "in response to or following an invitation by the buyer." She called you. That does not take the sale out of the rule.

The dollar floor is low and it is not one number. As the rule reads today, it is a purchase price of $25 or more for a sale made at the buyer's residence, and $130 or more for a sale made anywhere else — the FTC raised the second figure for inflation in 2015 and left the first alone. Check the current text of 16 C.F.R. §429.0 or the FTC's rule page rather than a number you saw quoted, including this one. Check the total purchase price against the applicable threshold.

What the rule is not is a general three-day right on every residential contract. A sale negotiated and completed at your own shop sits outside it, as does one done entirely by mail or phone with no in-person contact. Real estate, insurance and securities are carved out too, and the full exemption list lives in the rule itself.

Financing can create a different federal rule

The Truth in Lending Act right of rescission is separate from the FTC rule. It can apply when consumer credit takes a security interest in the borrower's principal dwelling. Under Regulation Z, the clock generally starts after the latest of becoming contractually obligated on the credit transaction, receiving the rescission notice, or receiving the required key credit disclosures. Missing disclosures can extend the period. The FTC definition expressly excludes a transaction that is accorded this Consumer Credit Protection Act rescission right, so do not treat the two federal rights as stacked. Ask the lender which rule and disclosures apply to its product.

The notice is a separate document with its own rules

For a covered sale, §429.1 requires a completed receipt or contract copy, the specified statement near the signature or on the receipt’s front, and two completed cancellation forms. Give the required oral explanation too. Follow the rule’s language, type-size and placement requirements; a saved sentence in general terms does not replace the forms.

The deadlines to put on your schedule

For a covered sale, the buyer has until midnight of the third business day after the transaction. Under the FTC rule, all calendar days count except Sundays and federal holidays. A valid cancellation requires a refund within 10 business days; the rule also sets duties for delivered goods. State law may provide a longer window.

Put the date on the job calendar

For this example, assume a covered contract is signed on Thursday and Friday, Saturday and Monday are not federal holidays. Count those three days. The buyer's federal deadline is midnight Monday. Do not schedule demolition or a special order for Friday just because your crew does not work Saturday; set the first irreversible step for Tuesday unless a valid exception or stricter state rule says otherwise.

The emergency exception is narrow, and it has to be in writing

The rule has a genuine-emergency exception. It is not a general "the customer wanted us to start immediately" escape. The buyer must initiate contact, need the work for an immediate personal emergency, and give a separate dated and signed statement in the buyer's own handwriting describing the emergency and waiving the right to cancel.

A related carve-out covers a visit the buyer initiated and specifically requested for repairing or performing maintenance on the buyer's personal property. Read those two words before you lean on it — the rule says personal property, not the house, and where an installed system stops being personal property is exactly the kind of line you want a construction attorney to draw rather than deciding it on a driveway. And the carve-out has a stated limit: if on that visit you sell anything beyond the replacement parts the repair actually needed, the exclusion does not reach the add-on.

A checkbox on your own form does not satisfy the handwritten emergency statement requirement. Assess added remodeling work separately; an emergency repair does not automatically exempt the later sale.

Check state cancellation rights as well

State law can add rights and notice requirements. For example, California’s home improvement contract statute includes a five-business-day notice for buyers aged 65 or older and separate disaster-contract provisions. Do not shorten an applicable state right to match the federal three-day rule.

No national summary is worth relying on here. Ask your state attorney general's consumer protection division and licensing board which form controls. If you work across state lines, check each state separately.

Record the notices and plan the start date

Provide the completed contract or receipt, required statement, oral explanation and two completed cancellation forms. Let the applicable window expire before you place special orders or spend the deposit. Quote the start date from the end of the window and keep a dated delivery record. A contract clause cannot shorten a right you do not control. Read deposits for contractors alongside this: a state deposit cap and a cancellation window constrain the same first week.

In DoneQuote you can save start-date wording in Agreements, then enter the actual date after checking the applicable cancellation window. Complete and deliver the prescribed cancellation forms and retain the delivery record. Saved terms and online quote approval do not determine which rule applies or calculate its legal deadline.