Contracts & ExecutionQuestion 648 of 1605
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.Withhold final payment until the contractor files a release of lien
b.Demand arbitration through the American Arbitration Association
c.Cancel within 24 hours for any reason
d.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)
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 1605 questions free — no signup required.
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