Written estimate law US and what it asks of you

Estimates in the United States at a glance

There is no single written estimate law in the US. The FTC Cooling-Off Rule covers some sales made at a customer’s home, and each state adds its own rules for auto repair, home improvement and contractor deposits. This page sets out those rules from official sources, with state examples clearly marked, and gives you a free US estimate template with sales tax, a deposit line and a valid until date. The estimate template USA businesses can start from adds sales tax, a deposit line and a valid until date.

Usual title

Estimate, or Quote or Bid for a fixed price

Federal cancellation rule

3 business days for covered home sales

Tax on the estimate

State and local sales tax, where it applies

Business ID

EIN, plus any state license number

Paper and dates

US Letter, Oct 28, 2026

Spelling

American: labor, color

Is an estimate legally binding in the US?

On its own, an estimate is a forecast of the price, not a promise. What binds you is what the customer accepts: a signed estimate, a contract or a work order. No single federal law covers estimates. The FTC regulates certain home sales and each state sets the rest, so one document can carry different duties in California and New York.

State rules can make an estimate firmer than its name suggests. California home improvement contracts, for example, must handle any price or scope change through a written change order signed by both sides before the change is made.

The working rule for any trade: call the document an estimate only when the price can genuinely move, say what would move it, and get written approval before you go over it. If you can hold the price, call it a quote or a bid. Our guides on the difference between a quote and an estimate and whether a quote is legally binding cover the wording in more depth.

The FTC Cooling-Off Rule and estimates signed at home

The FTC Cooling-Off Rule lets a buyer cancel certain sales made at their home, or at a temporary location away from the seller’s permanent place of business, until midnight of the third business day after the sale. Saturdays count as business days. Sundays and federal holidays do not.

• Thresholds. Sales at the buyer’s home are covered from $25, and sales at temporary locations from $130, a level that took effect on March 13, 2015.
• Repairs the customer asked for. A sale made because the customer asked you to visit to repair or maintain their personal property is not covered, but anything extra you sell on that visit is.
• Other exclusions. Sales needed to meet an emergency, sales made entirely online, by mail or by phone, and sales after negotiations at your permanent place of business.
• Paperwork. At the time of sale you must tell the buyer about the right to cancel and give two copies of a cancellation form, plus a dated contract or receipt showing your name and address that explains the right, in the same language as the sales presentation.
• Refunds. After a cancellation you have 10 days to refund the money, return any check the buyer signed and return any trade-in.

So an estimate signed at a kitchen table after a door knock can be cancelled. Note who asked for the visit, and hold off ordering special materials until the window closes.

State example: written estimates for auto repair in California

Auto repair is where estimate rules get most detailed, and California is a clear example. Its Bureau of Automotive Repair says a shop must give the customer an estimate showing the expected cost of the work, and the customer must authorize the repairs before the shop can begin. Treat this as one state’s rule, not a national one.

• Authorization can be given verbally, in writing or electronically, for example by email or text.
• If the shop finds more problems after starting, it must contact the customer, who must authorize any additional repairs.
• A teardown to diagnose the problem may be charged even if the customer then declines the repair, so say so up front.
• The final invoice must list the shop’s name, address and license number, every repair including free work, every part with a note of whether it is used, reconditioned or rebuilt, and the totals for parts and labor.
• The customer can ask for replaced parts back, and should ask before approving the work.

Other states run their own programs, so check your regulator. Our auto repair estimate template has separate lines for diagnosis, parts and labor.

Home improvement estimate rules: California and New York

Home improvement is the other area where states step in. California and New York both apply their rules to jobs above $500, give the homeowner a short window to cancel, and control how much money you can take before the work is done. These are state examples, not federal rules, and other states differ.

California also has a service and repair contract for urgent work under $750, where the right to cancel ends once the contract is signed and work starts. In other states, check the contractor licensing board or attorney general.

What to put on a US estimate

The FTC’s advice to homeowners doubles as a checklist for contractors. A written estimate should describe the work, the materials, the completion date and the price. The contract that follows should add your name, address, phone and license number, estimated start and completion dates, and a written statement of the customer’s right to cancel.

The FTC tells homeowners to compare several estimates, so an itemized one that explains your numbers beats a lump sum. The free estimate maker adds a low to high range when the price depends on what you find.

Sales tax and tax IDs on a US estimate

There is no national sales tax rate to print on an estimate. The SBA notes that sales tax, like income and property tax, can vary significantly from place to place, and that the need for a state tax ID number depends on whether your business must pay state taxes. Check your state revenue department before you add tax to a job.

Your EIN is your business’s federal tax ID number. Commercial customers may ask for it when setting you up as a vendor, so you can print it next to your state license number.

The quote maker’s US preset takes your local rate and shows prices with tax added or included. The estimate template for USA jobs comes in Word, Excel and PDF from the quote template library, and the roofing estimate template shows a filled example.

Deposits, payment terms and how long an estimate stays open

No federal rule caps contractor deposits. The FTC tells homeowners not to pay the full amount up front, notes that some states limit the size of a down payment, and advises never making the final payment until the work is finished. California’s cap of $1,000 or 10% of the contract price, whichever is less, is one example of a state limit.

We found no federal or state rule that fixes how long an estimate stays valid. Thirty days is a common choice, shorter when lumber, shingles or copper are moving. Print a valid until date so an old price cannot be accepted months later; our guide to quote validity periods has sample wording.

Sources