What Should a Remodeling Contract Include?

By Wyatt Cooper · Published October 22, 2026 · 7 min read

Key takeaways

A remodeling contract names the parties and your license, describes the work and materials specifically, states the price, ties every payment to work done, and says how changes, delays and disputes are handled.
Many states set required terms for home improvement contracts; California's Business and Professions Code § 7159 lists headings, notices and type sizes, and a contract missing them is cause for discipline.
If you sign at the client's home, the federal Cooling-Off Rule gives the buyer three business days to cancel on most sales of $25 or more, and some states add their own notice.
Change orders belong in the contract from day one: in writing, signed, with the scope, price and schedule effect, before the work starts.

A remodeling contract should include the parties' names and addresses and your license number; a specific description of the work and materials; the price; a payment schedule tied to work done; start and completion dates; how changes are ordered and priced; who pulls permits; your insurance; warranties; exclusions and allowances; and any notices your state requires, such as a right to cancel and a lien warning. Have both parties sign before work starts.

The parts every remodeling contract needs

California's Contractors State License Board sums up a good contract as one that "details who will do the work, what materials will be used, where the work will be done, when it will be done, and how much it will cost" (CSLB, Terms of Agreement). That holds in any state. The table lists the parts and what each settles.

What a remodeling contract includes, and the argument each part prevents
Part	What it says	What it prevents
Parties and license	Owner, contractor, addresses, license number	Doubt about who promised what
Scope and materials	Brand, model, color, quantity, per drawings	"I thought that was included"
Allowances and exclusions	Each allowance's amount and what it covers; what is not in the price	Disputes over picks and surprises
Price	The contract amount in dollars and cents	A moving total
Payment schedule	Each payment tied to a stage of work	Paying ahead of the work, or chasing money
Dates	Approximate start and completion, what counts as starting	Arguments over delay
Changes	Written, signed change orders with price and schedule effect	Unpaid extras
Permits and inspections	Who pulls them, whether fees are in the price	Unpermitted work
Insurance and warranty	Liability and workers' comp; what is warranted and for how long	Uncovered damage and callbacks
Notices	Right to cancel, lien warning and any others your state requires	An unenforceable contract or a license complaint

One state's required terms: California

California shows how specific a state can get. A home improvement contract over $500 "and any changes to the contract shall be in writing and signed by the parties to the contract prior to the commencement of work covered by the contract or an applicable change order" and must include, among other things (Bus. & Prof. Code § 7159):

Your name, business address and license number, and the heading "Home Improvement" in at least 10-point boldface.
"Contract Price," in dollars and cents, and a description of the project and of "the significant materials to be used and equipment to be installed."
If you take a down payment, the heading "Downpayment" and the statement "THE DOWNPAYMENT MAY NOT EXCEED $1,000 OR 10 PERCENT OF THE CONTRACT PRICE, WHICHEVER IS LESS."
A "Schedule of Progress Payments" with each payment in dollars and cents tied to the work, and the statement that "IT IS AGAINST THE LAW FOR A CONTRACTOR TO COLLECT PAYMENT FOR WORK NOT YET COMPLETED, OR FOR MATERIALS NOT YET DELIVERED."
"Approximate Start Date," "Approximate Completion Date" and what counts as substantial commencement of work.
A "Note About Extra Work and Change Orders," and a change-order form that becomes part of the contract only if written and signed before the work.
Whether subcontractors will be used, with a Yes/No box, and the notices on liability insurance, workers' compensation, the Mechanics Lien Warning, the CSLB, and the three-day (five-day for a senior citizen) right to cancel.

Section 7159.5 adds that "except for a downpayment, the contractor shall neither request nor accept payment that exceeds the value of the work performed or material delivered," and makes some violations misdemeanors (§ 7159.5). Other states' rules differ; read your own before you copy California's.

The right to cancel when you sign at home

The Federal Trade Commission's Cooling-Off Rule covers a sale of consumer goods or services solicited in person and agreed "at a place other than the place of business of the seller," with "a purchase price of $25 or more if the sale is made at the buyer's residence" (16 CFR 429.0). The seller must give the buyer a completed copy of the contract stating that the buyer "may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction," and a notice of cancellation form in duplicate (§ 429.1). A business day is any day "except Sunday or any federal holiday." The rule excludes some sales, such as a buyer-initiated bona fide emergency where the buyer waives the right in a handwritten statement.

Example: a contract signed at the client's kitchen table on Friday, October 2, 2026 can be canceled until midnight of the third business day after it, Tuesday, October 6 (Saturday the 3rd, Monday the 5th and Tuesday the 6th; Sunday doesn't count). Don't start work or order special materials before then. California's own notice in § 7159 runs alongside the federal one, so a California contract carries the state's wording too.

Worked example: the money terms of one contract

Lin hall bath — Contract Price, Downpayment and Schedule of Progress Payments

Contract Price: $25,650.00
Downpayment (capped at the lesser of $1,000 or 10% = $2,565): $1,000.00
Progress payment 1: $8,000.00 on demolition complete and plumbing and electrical rough-in passed
Progress payment 2: $9,000.00 on waterproofing and tile complete
Progress payment 3: $5,000.00 on fixtures, door and vanity installed
Final payment: $2,650.00 on final inspection passed and punch list complete
Check: $1,000 + $8,000 + $9,000 + $5,000 + $2,650 = $25,650

Money terms of a fictional California bathroom contract (the $25,650 price from the bathroom estimate example)

Each payment names the work it pays for, and none runs ahead of it. For how that price was built, see how to estimate a bathroom remodel; for a lender-financed job, how to set up a draw schedule; and for the change-order clause in use, how to handle a change order on a remodel.

The bottom line

Write the remodeling contract as specifically as the estimate: who, what, where, when and how much, every payment tied to work done, changes in writing before the work, and every notice your state requires. If you sign in the client's home, give the right-to-cancel notice and wait it out.

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Sources

California Business and Professions Code § 7159 — California Legislative Information. Read October 22, 2026.
California Business and Professions Code § 7159.5 — California Legislative Information. Read October 22, 2026.
16 CFR Part 429, Rule Concerning Cooling-Off Period for Sales Made at Homes or at Certain Other Locations — Electronic Code of Federal Regulations (eCFR). Read October 22, 2026.
Terms of Agreement: A Consumer Guide to Home Improvement Contracts — California Contractors State License Board. Read October 22, 2026.

Questions

What should be included in a remodeling contract?

The parties and your license number, a specific scope and materials list, allowances and exclusions, the price, a payment schedule tied to work done, start and completion dates, the change-order process, who pulls permits, insurance, warranty terms, and any notices your state requires.

Does a remodeling contract have to be in writing?

It should always be, and many states require it. California requires a written, signed home improvement contract for jobs over $500, with specific headings and notices, before work starts.

Can a homeowner cancel a remodeling contract?

Often, for a short time. Under the FTC's Cooling-Off Rule, a buyer who signs at home on a sale of $25 or more can generally cancel until midnight of the third business day after, and some states, such as California, add their own notice. Read your state's rule.

How much deposit can a remodeler ask for?

It depends on the state. California caps the down payment at $1,000 or 10% of the contract price, whichever is less, and bars payments that exceed the value of work done or materials delivered. Check your state's rules before you write the schedule.

Should change orders be in the original contract?

Yes: the contract should say that changes are made only by a written, signed change order stating the scope, the price change and the effect on payments and completion, before the changed work starts. California requires exactly that.