Every residential contractor knows about Regulation Z. That’s the 3-day right to cancel a home improvement contract. It’s federal law and applies in all 50 states any time you do work on the primary residence of an owner. A blank cancellation form has to be part of the home improvement contract. The three days starts running when the contract is signed and the form is delivered. To be valid, any cancellation under Reg Z has to be in writing and sent to the address on the cancellation form. A phone call isn’t enough – maybe. I say “maybe” because as of last month, there’s an exception. I’ll explain.
Cheri Rose signed a contract to have Gillece Plumbing and HVAC repair sewage pipe under her Pittsburgh PA driveway. Later that day, she changed her mind. Cheri called Gillece and left a message to cancel the deal. Next morning, Gillece sent a crew to her house and started excavating. When she complained, Gillece threatened to refill the hole if Cheri didn’t agree to accept responsibility.
As it turns out, Gillece had a policy on cancellation of home improvement contracts: Any oral cancellation is void. Ignore it. Cancellations have to be in writing. Counsel for Gillece could cite support under both federal Reg Z and Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL). Cancellations under both have to be in writing.
Pennsylvania’s attorney general didn’t like that. The AG filed for an injunction requiring Gillece to accept oral cancellation of home improvement contracts. In support of his position, the AG cited Pennsylvania’s Home Improvement Consumer Protection Act. HICPA gives owners a 3-day right to cancel but doesn’t say anything about cancellation having to be in writing. Was that just a legislative oversight? Or did the legislature really intend to make oral cancellations effective for home improvement contracts?
The case of Commonwealth of Pennsylvania v. Gillece Services was decided last month, April 30, 2026. Which applied? Either UTPCPL, which required cancellation in writing. Or HICPA which gives the same right of cancellation but says nothing about in writing.
Unanimous Supreme Court Decision
Justice McAfferty based his opinion on rules of statutory construction. First, special provisions prevail over general provisions. UTPCPL applies to a wide variety of consumer transactions. HICPA applies just to home improvement work. The Gillece case was home improvement. So HICPA was most relevant. Second, HICPA was enacted in 2008. UTPCPL dates from 1968. Later enactments control over earlier ones. Plus, language in HICPA repeals any earlier Pennsylvania law that is inconsistent. Finally, by its terms, HICPA is consumer protection law. Allowing a contractor to begin work knowing an owner is trying to cancel the deal is not consumer protection. Under Pennsylvania law, the phone call Cheri Rose made to Gillece was enough to blow up the deal.
All supreme court justices agreed with Justice McAfferty. But I like the concurring opinion by Justice Brobson. A contractor who knows an owner is trying to cancel should not rush to perform unwanted work. UTPCPL is intended to protect consumers. It’s not a sword for use against consumers.
What This Means for Contractors
Regulation Z (federal law) requires cancellation in writing, either by mail, email, hand delivered, fax, telegram, or text message. A verbal message (phone or conversation) isn’t enough. But many states, including Pennsylvania, provide a 3-day right to cancel home improvement work. These laws give owners rights similar to Reg Z. But there’s a difference. State law is enforced in state courts. No need to file in federal court. The 3-day right to cancel under Reg Z always has to be disclosed in the contract. Ditto the state right to cancel. But many states waive disclosure of the state’s right to cancel if the contract includes a federal Reg Z disclosure.
What Commonwealth v. Gillece teaches. A state’s 3-day right to cancel may not be identical to the federal 3-day right to cancel. State laws will always be open to interpretation by state courts. But I don’t recommend starting any job over objection by the owner. That’s just asking for trouble.
The 3-day right to cancel can be a complex issue. If your interest is construction and not the fine points of contract law, I have a suggestion. Let Construction Contract Writer draft your agreements. The trial version is free.
