MHIC NASCLA Contractors Practice Exam

In the context of door-to-door contracts, particularly under laws that govern consumer protection, if a homeowner cancels such a contract within a specific period, there are regulations that limit the fees a contractor can collect. Many jurisdictions allow for a short cancellation period—commonly three days—during which the homeowner has the right to cancel without penalty.

In this case, the maximum service fee that may be collected by the contractor after a cancellation is often established by the guidelines governing these contracts. If the contract cancellation is permissible after two days, typically the law allows the contractor to retain a minimal service fee that reflects any actual work done up to that point.

Thus, for a $1,000 contract canceled shortly after signing, it is reasonable to expect that retaining a service fee for a limited term, like one month, would not exceed the customary permissions granted by consumer protection laws. This differentiates the allowable fee from situations where significant work has been completed or where a contract is terminated after its terms have begun to be fulfilled.

Ultimately, the option that indicates a maximum service fee aligned with common regulatory practices suggests that the contractor may retain a fee for up to one month, thereby adhering to the stipulated laws regarding cancellations within the designated period.