Contractors

The three-day right to cancel, and the day almost everyone counts wrong

It is not about vacuum cleaners. It bites on where the agreement was signed — and a proposal signed at a kitchen table is exactly the sale it covers.

What the rule is, and why it reaches a remodeler

The Federal Trade Commission’s Cooling-Off Rule is 16 CFR Part 429, "Rule Concerning Cooling-off Period for Sales Made at Homes or at Certain Other Locations". It is almost always explained with a story about a door-to-door salesman, which is why most contractors have decided it is not about them.

What it actually turns on is where the buyer’s agreement is made. § 429.0(a) covers a sale of consumer goods or services where the seller personally solicits the sale — "including those in response to or following an invitation by the buyer" — and the buyer’s agreement or offer to purchase is made somewhere other than the seller’s place of business, naming the buyer’s residence first among the examples.

Two exclusions in § 429.0(a) look like they save a remodeler and do not. The one for a buyer-initiated visit to repair or maintain something covers the buyer’s personal property; a kitchen is real property. The one for transactions "pertaining to the sale or rental of real property" is about selling a house, not remodelling one. A home improvement contract is a sale of services.

When it bites, by where you signed and for how much

The $130 figure is the one to check yourself against. The rule was written with $25 for both, the Commission raised the away-from-residence figure to $130, and a great deal of contractor advice still in circulation quotes the old number.

There are exclusions in § 429.0(a) that no app and no web page can see, because they depend on how the sale came about: a deal negotiated at your own permanent premises and merely signed later, a genuine emergency where the buyer has written and signed a waiver in their own hand, a sale arranged entirely by post or telephone with no other contact. If one of those fits, the notice may not be owed at all.

What you have to hand over, and when

1. A completed copy, at the time of signing

   § 429.1(a) wants a fully completed receipt or copy of the contract given at the time of its execution, in the same language as the sales presentation, showing the date of the transaction and the seller’s name and address. Not posted the next day. At the table.

2. The statement, in ten point bold, beside the signature

   In bold face type of a minimum size of ten points, in immediate proximity to the space for the buyer’s signature: "You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction."

3. Two cancellation forms, attached and detachable

   § 429.1(b) wants the form in duplicate, captioned either "NOTICE OF RIGHT TO CANCEL" or "NOTICE OF CANCELLATION", attached to the contract and easily detachable, in ten point bold face type. Two copies because the buyer sends one and keeps one — a single copy means a buyer who cancels has kept no evidence that he did.

4. Filled in by you, not by them

   § 429.1(c) makes completing both copies the seller’s job: the seller’s name, the address of the seller’s place of business, the date of the transaction, and the date — "not earlier than the third business day following the date of the transaction" — by which the buyer may give notice of cancellation.

The date, which is where it goes wrong

That last blank — the deadline — is the one a contractor must never work out in his head at the end of a two-hour sales call. It is midnight of the third business day after the transaction date, counting from the day after the sale, and the rule’s definition of a business day is not the definition anybody means by it.

§ 429.0 says: "Business Day means any calendar day except Sunday or any federal holiday". That is the whole definition, and it has two consequences that catch people:

• Saturday is a business day. It counts. Almost every article written about this rule has it the other way round.
• Sunday is not, and neither is any federal holiday. The rule gives a list of examples in a parenthesis, but the words it uses are "any federal holiday" — so the list is the federal holidays, not those ten. Juneteenth became one in 2021, long after that parenthesis was written, and it is one.

Worked through, on a week with no federal holiday in it and then on the week of Thanksgiving. Every date in this table is counted by the same code the app puts on a proposal — none of it is arithmetic done by hand for a web page:

The third row is the one worth staring at. A sale signed on the Wednesday runs out on the Saturday, because Saturday is the third business day. And the last row is a holiday doing the same job a Sunday does — the Thursday drops out and the deadline moves to the Monday.

Which way you err matters, and it is not symmetrical. Treat Saturday as a non-business day and the deadline lands a day late, which is harmless. Treat Sunday as a business day and it lands a day early — and § 429.1(c) says the date must be "not earlier than the third business day", so an early date is exactly the thing the rule forbids.

What this page does not tell you, and will not

This is the federal rule only. Many states have home-solicitation or home-improvement contract laws of their own, several give the buyer longer than three days, and some require wording of their own. § 429.2 records that the Commission did not set out to preempt them.

There is no state-by-state table on this page and there is not going to be one. Nobody here can verify fifty statutes, a list assembled from memory is exactly the kind of invented fact that ends up quoted back at somebody in a dispute, and a contractor who reads a confident three-day answer and never learns his state gives longer is worse off than one who was told to go and look. Whichever period is longer is the one that protects the buyer. Go and check yours.

This is not legal advice either. What it is, and all it is, is the text of a federal rule with the citations attached so you can read it yourself — and a way of counting a date that does not depend on anybody remembering that Saturday counts.

Why it is in the app rather than on a checklist

Trueline works the deadline out rather than asking for it. The proposal knows where it was signed and what it is for, so it knows whether the rule bites; it counts the business days the federal way, Saturdays in and Sundays and federal holidays out; and it prints the notice and both cancellation forms with your name, your business address and that date already on them.

And when it cannot complete them — no business address on your profile, say — it refuses to print a form with a hole in it and says so on the document instead. A notice with a blank where the address goes tells a buyer to post his cancellation to nowhere, which is worse than none, because it looks like a notice.

Questions people ask

Does the three-day right to cancel apply if the homeowner called me?

The phrase "including those in response to or following an invitation by the buyer" is inside the § 429.0(a) definition rather than an exception to it, so being invited does not by itself take the sale out of the rule. What the rule turns on is where the agreement was made and what it costs.

Is Saturday a business day for the three-day cancellation period?

Yes. § 429.0 defines a business day as any calendar day except Sunday or any federal holiday, so Saturday counts and Sunday does not. Getting this backwards in the direction that shortens the buyer’s three days is what § 429.1(c) forbids when it requires a date "not earlier than the third business day".

What has to be handed over at signing?

A fully completed copy of the contract or receipt, the cancellation statement in ten point bold beside the signature space, and two completed copies of the cancellation form attached to the contract and easily detachable. § 429.1(c) makes filling in the seller’s name, business address, transaction date and cancellation deadline the seller’s job rather than the buyer’s.

Does the rule apply to a job signed at my own office?

A sale where the buyer’s agreement is made at the seller’s main or permanent branch office is not a door-to-door sale under 16 CFR 429, so the federal notice is not required. Your state may still require one — this page does not know your state’s rule and does not pretend to.

What does my state require?

This page will not tell you, on purpose. Many states have their own home-solicitation laws, several give longer than three days, and a list written from memory would be the exact kind of made-up fact that costs somebody money. Look up your own state, and remember the longer period is the one that governs.

Where this fits with Trueline

Trueline is an iPhone app that measures a room, takes it off, prices it from your own rate book and turns it into a proposal — with every length carrying whether it was scanned, drawn or measured, right onto the document a client reads. See how it works, or take the free templates and use them with whatever you already have.

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