When a customer cancels

The text lands at 4:40 on Thursday. "We've decided to hold off on the deck for now — sorry for the trouble." The railing package came in special order on Tuesday, your crew is blocked out Monday through Friday, and you turned down a fence job for that same week.

Courts almost never order a homeowner to let a contractor finish, so in practice, yes, they can walk. But walking away from a signed contract is not the same as never signing one. What you can collect depends on what your contract says about cancellation, and on how much of the job you had already turned into money you cannot get back.

Three cancellation points on the same $14,000 deck

Take a cedar deck rebuild priced as five line items: permit and demo $1,800, footings and framing $4,600, decking $3,900, railing $2,300, cleanup and haul-off $1,400. Inside those numbers sit $3,400 of stock lumber and a $1,450 special-order railing package.

The middle row catches people. Nothing is built, so it feels like a loss you have to eat — and it is the row where a written clause does the most work, because none of the damage is visible on site.

The clause that decides who eats it

Cancellation language belongs in the contract you sign, not in a policy page nobody read. Four things it needs to name, in the order they cost you money:

• What happens to the deposit. "Deposit is applied to materials ordered and work performed; any balance is refunded within 14 days" is a sentence you can defend — after checking your state's cap and refund deadline.
• Reimbursement for materials. Custom cabinets, cut countertops, made-to-size windows and most special-order trim are usually non-returnable, and returnable stock often carries a restocking fee. That is supplier policy rather than law, so it varies by supplier and by order — get the return terms in writing when you place a special order. Then write that the customer pays non-returnable material cost plus any restocking charge, and may take delivery of what they paid for.
• Payment for work performed. Work completed through the cancellation date is billable at contract line-item value, with partially finished items at percentage of completion.
• A short-notice fee for the calendar. Almost nobody writes this one down. Tie it to notice: no fee above roughly ten business days, a stated mobilization fee inside that window, and inside two or three days a fee that reflects a crew you are paying anyway. Set the number from your own payroll and booking history, and stay inside what it supports.

Add two lines: a cancellation must be in writing to take effect, and a stop-work request lasting past a stated number of days counts as a cancellation. Otherwise a job sits in limbo, unbilled, holding your slot.

Why "non-refundable" is not a magic word

"All deposits are non-refundable. No exceptions." Standing alone in a contract, that sentence is weaker than it looks.

A fixed cancellation charge can be challenged as a penalty if it is far out of proportion to the loss. Keep the number tied to a documented cost or a reasonable estimate of one.

Two limits apply whatever your contract says. You have a duty to mitigate: once a customer clearly cancels, you cannot keep working to inflate the bill, and you are expected to make a reasonable effort to fill the slot. Recovery on the unbuilt part is generally your lost profit, not the full contract price, because you also saved the cost of doing it. Separately, many states require specific terms in a residential home improvement contract, and a contract missing them can be harder for the contractor to enforce. That is a question for a local construction attorney, not for a template.

After the first day, you have a different claim

Once you have furnished labor or materials to the property, you stop being someone owed a cancellation fee and become someone owed money for work — and a partial invoice is far easier to collect than a fee. Photograph the site the day work stops, print the time entries, and keep the supplier invoice and the special-order confirmation carrying the customer's selection.

It also starts a clock. Mechanic's lien deadlines are set state by state, and the one thing they have in common is that none of them run from the day the customer puts the cancellation in writing. Many states measure from the last day you furnished labor or materials. Others measure from completion of the whole project, which on an abandoned job is its own question — California, for example, gives a direct contractor 90 days from completion of the work of improvement, and a continuous 60-day stoppage can be what counts as completion. Some states also require a preliminary notice long before any of that.

So a mid-job cancellation can burn a chunk of your lien window while you are still trading polite emails, and you cannot work out how much from a national rule. If the amount matters, look up your own state's deadline and notice requirements the same week — or ask a construction attorney there.

The cancellations you will not be paid for

Some are protected by law. A covered in-home sale can carry the FTC Cooling-Off Rule's cancellation right. A separate federal right can apply to a credit transaction secured by the customer's principal dwelling under TILA and Regulation Z. They have different triggers and documents; the FTC rule excludes transactions that receive the Consumer Credit Protection Act rescission right, so do not combine them into one generic three-day rule. If either right applies, handle the cancellation and refund under the governing rule and state law. The dedicated guide explains the distinction.

Others are on you. If you missed the start date twice, or the contract lacks terms your state requires, or the work so far is defective, a cancellation fee is not a fight worth having. And genuine hardship — a job loss, a death in the family, a house sale falling through — is a judgment call, not a legal one. Waiving the fee and keeping documented material cost is a common landing spot.

Say it back to them in writing the same day

Call, then email. The call keeps the relationship; the email is what you would show a judge. Confirm the cancellation date, the work performed through it, non-returnable materials and what happens to them, the fee and the contract section it comes from, and the amount due or refunded. One paragraph, no adjectives.

Say the unpleasant part plainly and once: "I can't return the railing package, so that $1,450 stays on the invoice. The $650 balance of your deposit comes back this week." Contractors who cave on a documented cost usually find the customer had expected to pay it. Contractors who go quiet and send a surprise invoice three weeks later end up in small claims over a number they could have named on Thursday.

Keeping cancellation terms on the paperwork the customer signed

A cancellation clause only helps if the customer approved it on the same document as the price. Keep yours in DoneQuote as reusable terms, so the deposit rule, the special-order rule and the short-notice fee go out with the priced line items and get approved together — and when you have to bill a half-finished job, those same line items are what you invoice against.

None of this makes a cancellation profitable. It makes it a settled number instead of an argument, arrived at on the day it happens.