A home improvement contract for $8,500 requires a 3-day right to cancel notice. The contract is signed on Tuesday at 2 PM. When does the cancellation period expire?
Correct Answer
A) Friday at midnight
The 3-day right to cancel expires at midnight on the third business day after the contract is signed, which would be Friday at midnight per B&P Code Section 7159.
Why This Is the Correct Answer
Under Business and Professions Code Section 7159, the 3-day right to cancel for home improvement contracts expires at midnight on the third business day after signing. Since the contract was signed Tuesday at 2 PM, the three business days are Wednesday, Thursday, and Friday. The cancellation period expires at midnight on Friday, the third business day.
Why the Other Options Are Wrong
Option B: Saturday at midnight
Saturday at midnight would be incorrect because it extends the cancellation period to four business days instead of three. The law specifically requires the period to end at midnight on the third business day, which is Friday, not Saturday.
Option C: Friday at 2 PM
Friday at 2 PM would be incorrect because the cancellation period must extend until midnight of the third business day, not just until the same time the contract was signed. The law provides the full third day until midnight.
Option D: Thursday at 2 PM
Thursday at 2 PM would be incorrect because it only provides two business days for cancellation instead of the required three. This would shortchange the consumer's statutory right to cancel by one full business day.
Memory Technique
Remember '3-B-M': 3 business days ending at Midnight. Start counting business days the day AFTER signing, then count three full business days to midnight.
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