WHAT A CALIFORNIA HOME IMPROVEMENT CONTRACT MUST INCLUDE

Business and Professions Code Section 7159 sets the rules. It defines a home improvement contract as an agreement between a contractor and an owner or tenant for a home improvement, where the total contract price, including all labor, services and materials, is more than $500. An agreement with a salesperson to sell, install or furnish home improvement goods or services also counts.

Do not confuse that figure with a newer one. A Contractors State License Board (CSLB) bulletin explains that the license exemption for minor work rose from $500 to $1,000 on January 1, 2025. That rule is about who needs a license. Section 7159, last amended effective January 1, 2026, still read $500 on October 4, 2026.

Service and repair contracts, which CSLB describes as covering emergency repairs or services requested on short notice, follow their own sections of the code.

Statutes usually change on January 1. Before you rely on a figure here, read the current Section 7159 or ask CSLB.

Section 7159 lists the contents. Several sit under a required heading:

• The contractor's name, business address and license number, plus the name and registration number of any salesperson who solicited or negotiated the job.
• “Contract Price”: the amount in dollars and cents. Section 7159.5 says it covers the entire cost, including profit, labor and materials. Any finance charge is shown separately.
• A description of the project and of the significant materials to be used and equipment to be installed, under its own heading.
• “Downpayment”: the actual amount. Our guide to California's down-payment rule covers the limit, and the rule that later payments cannot run ahead of the work.
• “Schedule of Progress Payments”: each payment in dollars and cents, tied to the specific work or services to be performed and the materials and equipment to be supplied.
• “Approximate Start Date” and “Approximate Completion Date,” with a statement of what counts as substantial commencement of work.

CSLB adds that the contract should be as specific as possible about materials and should say who will pull the building permits.

Before any work starts, the contractor must give you a copy signed and dated by both of you. Receiving that copy is what starts your right to cancel.

The first page must show the date you signed, the name, address and email address of the contractor to whom a Notice of Cancellation is to be sent, and a telephone number for help with that notice. The email address and telephone number are recent. CSLB's bulletin on new laws says that, effective January 1, 2026, contractors must “allow buyers to cancel via email.”

Since the same date, the contract must say whether a subcontractor will be used, with a Yes or No box. If Yes, it carries a disclaimer that a list of subcontractors must be provided on request, with their names, contact information, license numbers and classifications. The same disclaimer goes on each change order.

Close to the signatures, a notice must say the owner or tenant has the right to require the contractor to have a performance and payment bond. The contract must also state that once you pay for any portion of the work, the contractor will furnish a full and unconditional release from mechanics lien claims for that portion before any further payment is made.

A change-order form must be built into the contract. A change or extra work becomes part of the contract only if it is in writing and signed by both parties before the work it covers begins.

Under the required heading “Note About Extra Work and Change Orders,” the contract explains that an order must describe the scope of the change, the cost to be added or subtracted, and the effect on the schedule of progress payments.

A separate notice gives both sides of the rule. You may not require extra work without giving written authorization before it begins. Extra work is not enforceable against you unless the change order states, in writing and beforehand, its scope, its cost and its effect on the progress payments or the completion date. The notice adds that a contractor's failure to comply does not rule out legal or equitable remedies designed to prevent unjust enrichment.

Section 7159 requires these notices, in the contract or, where the section allows, as an attachment:

• Commercial General Liability Insurance (CGL): a statement that the contractor does not carry it, carries it with a named insurer you can call, is self-insured, or is a limited liability company that carries liability insurance or maintains other security as required by law.
• Workers' Compensation Insurance: either the contractor has no employees and is exempt, or the contractor carries it for all employees.
• The extra work and change order notice described above.
• Mechanics Lien Warning: anyone who helps improve your property and is not paid may record a lien, even if you paid your contractor in full. Our guide to mechanics liens covers this.
• Information about CSLB, which the notice calls “the state consumer protection agency that licenses and regulates construction contractors.”
• The right to cancel notice that fits your contract.

The contract must include the cancellation notice that applies to you:

• Three-Day Right to Cancel: three business days.
• Five-Day Right to Cancel: five business days for a senior citizen, which Civil Code Section 1689.5 defines as an individual who is 65 or older.
• Seven-Day Right to Cancel: seven business days, for a contract to repair or restore a home damaged by a sudden or catastrophic event for which a state of emergency or a local emergency has been declared.

The deadline is midnight of the third, fifth or seventh business day after you received a signed and dated copy of the contract that includes the notice. The notice lists the ways to cancel: emailing, mailing, faxing or delivering a written notice to the contractor at the contractor's place of business. It also says the contractor must then return anything you paid within 10 days of receiving your cancellation.

The notice comes with a Notice of Cancellation form, in duplicate, that you can detach and send.

The three-day or five-day notice is not required for a contract negotiated at the contractor's place of business. CSLB's pamphlet also says homeowners waive the three-day or five-day right to cancel if they sign a service and repair contract.

Cancellation deadlines are strict. This is a summary, not legal advice. If you are thinking of cancelling, read the notice in your own contract and contact CSLB or an attorney right away.

CSLB's advice is short: “Don't sign anything until you understand the contract and agree to the terms.” It also says never to sign a blank or partially blank contract, and that you may wish to review the proposed contract with an attorney.

• The contractor's name, address and license number match the CSLB license record.
• The price, the work and the materials are described in detail, and each progress payment is tied to specific work.
• Approximate start and completion dates are filled in.
• The first page shows the date you signed and the contractor's address, email address and telephone number.
• The subcontractor box is checked Yes or No.
• The insurance notices, Mechanics Lien Warning, CSLB notice and right to cancel notice are there, with a Notice of Cancellation form.
• A change-order form is included, no blanks are left, and you have a copy signed and dated by both sides before work starts.

• CSLB: What Should I Look for in a Contract and Binding Agreements? (opens in a new tab)
• CSLB: A Consumer Guide to Home Improvement Contracts (PDF) (opens in a new tab)
• CSLB: Sample Home Improvement Contract language (PDF) (opens in a new tab)
• Business and Professions Code Section 7159 (official text, California Legislative Information) (opens in a new tab)

We read Section 7159, as amended effective January 1, 2026, and CSLB's pages on October 4, 2026. This is general information, not legal advice. For your own contract, ask CSLB or an attorney.

Golden Empire USA offers a free assessment with a written scope, so you can see the work spelled out before any contract is signed.