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Old 05-26-2007, 08:11 AM   #1
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Default 3 day "Notice of Cancellation"

Do any of you have this form? Wasn't aware it was a federally required (separate) page with any home improvement contract.

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Old 05-26-2007, 08:56 AM   #2
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I don't have it as a separate form, but it is included in my contract terms.
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Old 05-26-2007, 08:04 PM   #3
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Quote:
Originally Posted by ProWallGuy View Post
I don't have it as a separate form, but it is included in my contract terms.

Same here I dont have the seperate form but It is in our contractract terms. I laugh when I read that post becuase back in the day when I was a newbie to selling I would basically tell every customer that they have 3 days to cancel, seems like the more people I told that the more people cancelled with in 3 days. So I try not to mention it anymore.
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Old 05-26-2007, 08:51 PM   #4
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If you don't have a separate page, no part of your contract is valid or enforceable. Read up....

www.baec.net

click on "consumer articles" and then
click on "the law and your home improvement contractor"

I think this is a national law, but I guess it could be a state thing
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Last edited by Rich; 05-30-2007 at 06:35 AM..
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Old 05-26-2007, 09:10 PM   #5
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ahhh, found it
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Old 05-26-2007, 09:57 PM   #6
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Interesting read. Not sure if its a national law or not, that site is for Eastern CT. But, it did make me think back to when I made my contract, and a separate form was called for. I have those in a file in my drawer, not in the paperwork the customer receives. My terms state:

C) CUSTOMER RIGHTS:
The Customer has the right to cancel this transaction within three (3) business days from the date of the transaction. If the Customer wishes to do so, they must complete a Cancellation Form which will be provided by the Contractor. Upon receipt of the Cancellation Form, the Contractor will return 100% of any deposit or property within ten (10) business days. If cancellation is made after midnight of the third (3rd) business day, the Contractor will retain 10% of the Total Price.

I probably did this so if they wanted to cancel, they'd have to do it face to face.
Never had a cancellation yet.
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Old 05-29-2007, 11:03 PM   #7
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The three day Notice of Cancellation is only needed in a home solicitation sale.
That's if you as the painter or salesman go door to door soliciting jobs.
If a customer calls you for work you do not need the three day Notice of Cancellation.
Per my lawyer who wrote my contract and contracts for many other trades, and by the way is one of the most well respected lawyers in this part of Michigan.
Read the first five words below in Sec. 3. paragraph (1).
All the states have this law.
I just cut it out or paste it in my contracts as needed.
Interesting note - read paragraph (5).





HOME SOLICITATION SALES (EXCERPT)

Act 227 of 1971

445.113 Written agreement or offer to purchase; contents; form; cancellation; exception. Sec. 3.
(1) In a home solicitation sale, unless the buyer requests the seller to provide goods or services without delay in an emergency, the seller shall present to the buyer and obtain the buyer's signature to a written agreement or offer to purchase that designates as the date of the transaction the date on which the buyer actually signs.
The agreement or offer to purchase shall contain a statement substantially as follows in immediate proximity to the space reserved in the agreement or offer to purchase for the signature of the buyer:
“You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right. Additionally, the seller is prohibited from having an independent courier service or other third party pick up your payment at your residence before the end of the 3-business-day period in which you can cancel the transaction.”
(2) The seller shall attach to the copy or cause to be printed on the reverse side of the written agreement or offer to purchase retained by the buyer a notice of cancellation in duplicate that shall appear as follows:
“notice of cancellation (enter date of transaction) (date) You may cancel this transaction, without any penalty or obligation, within 3 business days from the above date.
If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within 10 business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled.
If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller's expense and risk.
If you do make the goods available to the seller and the seller does not pick them up within 20 days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram to (name of seller), at (address of seller's place of business) not later than midnight on
______________________________ (date) I hereby cancel this transaction. ______________________________ (date) ______________________________ (buyer's signature)” (3) The notices required by this section shall be in not less than 10-point bold type and shall be 2 points larger than the text of the contract. A written agreement or offer to purchase and the notice of cancellation attached to the agreement or offer shall be written in the same language as that used in any oral presentation that was given to facilitate sale of the goods or services. The seller shall enter on the blanks in the notice of cancellation the date of transaction, which is the date the buyer signs the written agreement, and the date for mailing the notice of cancellation. An error in entering this information shall not diminish the buyer's rights under this act.
(4) Until the seller has complied with this section, the buyer may cancel the home solicitation sale by notifying the seller in any manner and by any means of his or her intention to cancel.
(5) This section does not apply to a home solicitation sale where the seller engaged in a telephone solicitation of the sale if sections 505 to 507 of the Michigan telecommunications act, 1991 PA 179, MCL 484.2505 to 484.2507, apply to the solicitation or sale.

History: 1971, Act 227, Imd. Eff. Jan. 3, 1972 ;-- Am. 1978, Act 152, Imd. Eff. May 18, 1978 ;-- Am. 2000, Act 15, Imd. Eff. Mar. 8, 2000 ;-- Am. 2002, Act 612, Eff. Mar. 31, 2003

Last edited by msmil; 05-30-2007 at 06:45 PM..
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Old 05-29-2007, 11:24 PM   #8
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As most contractors know, the Federal Trade Commission (FTC) issued a “door-to-door” sales rule many years ago that was designed to protect unsuspecting homeowners from being victimized by door-to-door salespeople. (The ones who sold pots and pans, encyclopedias and vacuum cleaners, for example).
What often happened in these situations is the homeowner would sign a document to purchase an item which usually turned out to be more expensive than they thought or more than they could afford.
Ultimately, their house would be foreclosed on since they gave (usually unknowingly), the mortgage on their home as security, or, personal property. This would be taken away as part of a judgment for failing to pay or not paying on-time.
During the legislative hearings leading to passage of this rule, it was noted that salespeople for improvements of property were also guilty of such tactics. Roofing and siding contractors were specifically mentioned. So, Congress included all property improvement agreements.
Since passage into law, all property improvement contracts signed in the home and involving a cost of $25 or more, require that a bold faced three day cancellation notice be placed near the signature line on the actual contract. In addition, and this is what many contractors fail to understand, you must also give that customer a separate Notice of Cancellation.
This form completely explains the three-day cancellation law and the steps needed to cancel the contract. It must include a copy for the customer to return to the contractor to cancel and a copy for the customer to keep for their records. Of course, the contractor should also have a copy as proof the notice was provided.
What happens if you do not give this notice? Well, simply put, the customer then has no obligation, under law, to carry out their portion of the contract, namely, not paying you for the work done. Until you give them the notice, the customer does not have the mechanism, provided by law, to cancel.
If you forget and give it to them late or at the end of the project, they can legally cancel the contract at whatever time you give it to them. They are under no legal obligation to pay for anything done prior to the time they were given their Notice of Cancellation. Even if you never give them notice and even if the work was done to everyone’s satisfaction, they are not required to pay.

Last edited by msmil; 05-30-2007 at 11:47 PM..
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Old 05-30-2007, 06:32 AM   #9
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Quote:
Originally Posted by msmil View Post
The three day Notice of Cancellation is only needed in a home solicitation sale.That's if you as the painter or salesman go door to door soliciting jobs.


If a customer calls you for work you do not need the three day Notice of Cancellation.

So from what you said, I guess I don't need one then. I am strongly against going door to door, we just don't do that up here.

Now what if the customer doesn't call you, but you call them after you hear they want work done? (someone recommends you to them, the other party got their number for you, and you call them).


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Old 05-30-2007, 06:53 AM   #10
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I believe both the states you work in have the 3-day cancellation deal
CT does not require it in the contract
MA does in some contracts (exterior over 1K)
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Old 05-30-2007, 11:42 PM   #11
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The 3 day (Cooling Off Period) Notice of Cancellation only pertains to Door to Door sales.
This is a (FTC) Federal Trade Commission Rule:
Title 16 Commercial Practices, Part 429
Each state has it's own rules governing door to door solicitors but this FTC rule overrides when it comes to signing contracts, to protect the consumer in the home where they are the most vulnerable.

The phone call scenario above is exempt - Why ? Because it is not Door to Door !!!!!!!

Ok, I am the same way as far as wanting everything legal in my business.
There is always so many unanswered questions we have as contractors and we never feel like we get the right answers.
I am Licensed, have Liability Insurance, Workman's Comp, Payroll Service, Pay Taxes properly, and have a Legal Contract that has been reviewed and edited by a lawyer.

Don't take my word as gospel on any of my replies.
Start with the internet and research your questions on this topic or any business related question.
Start making a list of questions that you feel that you haven't got a good answer on.
If you have an accountant ask for a referral for a lawyer.
Someone else you know might refer you to a lawyer.

You owe it to your business to have access to a lawyer.
I mean a lawyer who is knowledgeable on the trades.
Yes there is always some kind of fee, but come on, don't rely on getting your legal info here on the forum.
But, by all means, pass it on here when you do get it !!
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Old 08-20-2007, 09:08 PM   #12
 
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Actually the 3 day Right to cancel applies when you sell a product or service to a customer at their place of residence.

The only exception to the rule is if it is for emergency service work like flooding, etc...

Otherwise they have 3 business days to cancel and the 3 days starts at midnight of the day you put the legal form in their hand. If you wait to give them that form then the 3 days doesn't begin until you do give it to them.

Each state has different wording required so please contact your Contractors Licensing Board and they will give you exactly what you need to say. They won't even charge you for it in most cases.

In California go to cslb.ca.gov

The example you show means that if you actually SELL the product on the phone it doesn't apply, but since they can't legally sign a painting contract on the phone it is null.

Quote:
Originally Posted by msmil View Post
The three day Notice of Cancellation is only needed in a home solicitation sale.
That's if you as the painter or salesman go door to door soliciting jobs.
If a customer calls you for work you do not need the three day Notice of Cancellation.
Per my lawyer who wrote my contract and contracts for many other trades, and by the way is one of the most well respected lawyers in this part of Michigan.
Read the first five words below in Sec. 3. paragraph (1).
All the states have this law.
I just cut it out or paste it in my contracts as needed.
Interesting note - read paragraph (5).





HOME SOLICITATION SALES (EXCERPT)

Act 227 of 1971

445.113 Written agreement or offer to purchase; contents; form; cancellation; exception. Sec. 3.
(1) In a home solicitation sale, unless the buyer requests the seller to provide goods or services without delay in an emergency, the seller shall present to the buyer and obtain the buyer's signature to a written agreement or offer to purchase that designates as the date of the transaction the date on which the buyer actually signs.
The agreement or offer to purchase shall contain a statement substantially as follows in immediate proximity to the space reserved in the agreement or offer to purchase for the signature of the buyer:
“You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right. Additionally, the seller is prohibited from having an independent courier service or other third party pick up your payment at your residence before the end of the 3-business-day period in which you can cancel the transaction.”
(2) The seller shall attach to the copy or cause to be printed on the reverse side of the written agreement or offer to purchase retained by the buyer a notice of cancellation in duplicate that shall appear as follows:
“notice of cancellation (enter date of transaction) (date) You may cancel this transaction, without any penalty or obligation, within 3 business days from the above date.
If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within 10 business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled.
If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller's expense and risk.
If you do make the goods available to the seller and the seller does not pick them up within 20 days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram to (name of seller), at (address of seller's place of business) not later than midnight on
______________________________ (date) I hereby cancel this transaction. ______________________________ (date) ______________________________ (buyer's signature)” (3) The notices required by this section shall be in not less than 10-point bold type and shall be 2 points larger than the text of the contract. A written agreement or offer to purchase and the notice of cancellation attached to the agreement or offer shall be written in the same language as that used in any oral presentation that was given to facilitate sale of the goods or services. The seller shall enter on the blanks in the notice of cancellation the date of transaction, which is the date the buyer signs the written agreement, and the date for mailing the notice of cancellation. An error in entering this information shall not diminish the buyer's rights under this act.
(4) Until the seller has complied with this section, the buyer may cancel the home solicitation sale by notifying the seller in any manner and by any means of his or her intention to cancel.
(5) This section does not apply to a home solicitation sale where the seller engaged in a telephone solicitation of the sale if sections 505 to 507 of the Michigan telecommunications act, 1991 PA 179, MCL 484.2505 to 484.2507, apply to the solicitation or sale.

History: 1971, Act 227, Imd. Eff. Jan. 3, 1972 ;-- Am. 1978, Act 152, Imd. Eff. May 18, 1978 ;-- Am. 2000, Act 15, Imd. Eff. Mar. 8, 2000 ;-- Am. 2002, Act 612, Eff. Mar. 31, 2003
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Old 08-20-2007, 09:11 PM   #13
 
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Rich,

I did $1.306 million from residential repaints JUST from my canvassing department alone this year so far.

Don't turn up your nose at canvassing door to door. IT WORKS. In fact it is the ONLY way most small contractors get residential business. They knock on the door of the neighbors of the house they are painting.

Quote:
Originally Posted by Rich View Post
So from what you said, I guess I don't need one then. I am strongly against going door to door, we just don't do that up here.

Now what if the customer doesn't call you, but you call them after you hear they want work done? (someone recommends you to them, the other party got their number for you, and you call them).


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Old 08-20-2007, 10:57 PM   #14
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Quote:
Originally Posted by contractormarketing View Post
Rich,

I did $1.306 million from residential repaints JUST from my canvassing department alone this year so far.

Don't turn up your nose at canvassing door to door. IT WORKS.
Amen contractormarketing,

I am taking one of my new reps door to door one night this week until they build their network, referrals, etc.

Do you have any history on leads/hour knocking on doors? certain things you say/do that yield better results?
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