What a home improvement contract should say before you sign

A quote is not always a contract

A quote tells you the price. The contract is what you can rely on if something goes wrong. Sometimes they are the same document, because accepting a quote can form a contract. Either way, read the document you sign as the full agreement. Anything missing from it is hard to prove later.

What the contract should include

Official checklists from the FTC, Ontario, California and New South Wales overlap heavily. Look for each of these.

1. Who you're dealing with. Business name, address, phone number and license number. The FTC lists all four. In NSW, the contract must also name the licence holder.

2. A detailed description of the work. What will be done, where, and to what standard. Attach plans or specifications if there are any.

3. Materials. Brands, models, grades and quantities. The CSLB says the contract should describe in detail the products to be used and how the work will be done.

4. The total price. NSW requires the price to be shown prominently on the first page of contracts over $20,000, with a warning if it may change.

5. Payment schedule. Ontario's guidance asks for a payment schedule that includes the deposit amount. Each payment should be tied to completed work.

6. Start and completion dates. The FTC and Ontario both list these.

7. Permits. Who gets them. Ontario says permits are your responsibility unless the contract says the contractor will get them.

8. Change orders. How changes are priced and approved. California, NSW and Victoria all require written, signed changes.

9. Warranties. What is covered, for how long, and by whom. NSW sets statutory warranties of six years for major defects and two years for other defects.

10. Cleanup and disposal. Ontario lists who handles cleanup after the job.

11. Subcontractors. Ontario lists subcontractors and who pays them.

12. Your right to cancel. A written statement of any cooling-off right.

13. Every promise made out loud. The FTC says to include any promises made in conversation about scope and cost.

14. No blank spaces. The FTC says to make sure every blank is filled in before you sign.

Our guide on what a contractor quote should include goes deeper on pricing lines.

When a written contract is required

• California. A written contract is required for all home improvement projects over $500, according to the CSLB.

• Ontario. Any renovation contract worth more than $50 must be in writing.

• New South Wales. A written contract is needed for work over $5,000 including GST, with a more detailed contract for work over $20,000.

• Victoria. A major domestic building contract must be used for work worth more than $10,000.

Other states, provinces and territories set their own thresholds. Even where none applies, a written contract protects you.

Your cooling-off rights

A cooling-off period lets you cancel a signed contract within a short window. Who qualifies depends on where and how you signed.

United States: the FTC Cooling-Off Rule. For many sales made at your home, workplace or a temporary location, you can cancel for a full refund until midnight of the third business day after the sale. Saturdays count as business days; Sundays and federal holidays don't. Home sales under $25 aren't covered. The seller must tell you about your right to cancel and give you two copies of a cancellation form. There are exceptions, including some emergency sales and repairs you invited the seller to your home to do. After you cancel, the seller has 10 days to refund you. Many states add their own rules. California, for example, has a three-day right to cancel for most home improvement contracts and a five-day right for homeowners aged 65 or older.

Canada (Ontario). If you sign a contract worth $50 or more in your home, Ontario says you have 10 days to cancel for any reason, starting the day you receive a written copy of the agreement. If work starts during that period, you can still cancel but may owe reasonable payment for work and materials. If the contract lacks required information, you may be able to cancel within one year. Other provinces have their own rules.

Australia (New South Wales). For contracts over $20,000, the contract must state a cooling-off period of five clear business days after you receive a copy of it.

Australia (Victoria). For major domestic building contracts, Consumer Affairs Victoria says you have five business days after receiving a signed copy to withdraw without penalty.

Other Australian states and territories have their own rules. Check your state's fair trading or building regulator.

Payment and insurance terms to check

• Deposit. Some places cap it. California's limit is $1,000 or 10%, whichever is less, and NSW's maximum is 10%. See how much deposit a contractor should ask for.

• Final payment. The FTC says never to make the final payment until the work is done and you're satisfied.

• Home building insurance (Australia). In NSW, for contracts over $20,000, the contractor can't take a deposit until Home Building Compensation cover is in place and you have the certificate.

Before you sign

• Read the whole document, including the fine print and any attached terms.

• Compare it with the quote line by line. Did anything change?

• Check the license and insurance on official registers.

• Ask for a copy of the signed contract. In NSW, the builder must give you one within five business days.

• Don't sign under pressure. A fair contractor will wait while you read.

Get a second pair of eyes on your contract

EasyToDecode is launching soon. Upload your contract or quote, and it will quote the lines that cover price, payments, changes and cancellation, flag what's missing from this checklist, and draft questions to send your contractor before you sign. See how it works or join the waitlist.