Contracts & ExecutionQuestion 648 of 690
Under Bus. & Prof. Code §7159, a residential home improvement contract for $500 or more must include, in close proximity to the signature line, a notice informing the owner of the right to:
a.Cancel within 24 hours for any reason
b.Withhold final payment until the contractor files a release of lien
c.Cancel the transaction at any time before midnight of the third business day after the date of the transaction (the 3-day right of rescission)
d.Demand arbitration through the American Arbitration Association
Explanation
Bus. & Prof. Code §7159 (and Civil Code §1689.7 for door-to-door sales) requires a home improvement contract to contain, in immediate proximity to the buyer's signature, a 'Notice of Cancellation' informing the owner of the right to cancel before midnight of the third business day after signing. For senior consumers (age 65+), the cancellation period is extended to 5 business days under §1689.6. 24-hour cancellation is not the California rule. Lien releases and arbitration are separate, optional contract terms, not the statutory notice required at signing.
Law Reference: Bus. & Prof. Code §7159Practice all 690 questions free — no signup required.
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