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This entry was published on 2014-09-22
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Cancellation of contracts for future consumer services
Personal Property (PEP) CHAPTER 41, ARTICLE 10
§ 412-a. Cancellation of contracts for future consumer services. 1.
Contract for future consumer services. As referred to in this section,
the term "contract for future consumer services" shall mean any contract
entered into for consumer services to be performed in the future on a
lesson-by-lesson or class-by-class basis and offered, sold or provided
by correspondence schools which for the purposes of this section shall
mean any plan or method used by any person or persons, firm, corporation
or other organization for giving instruction in any form or manner by
correspondence under contract.

2. No person, including any business entity, may contract to receive,
or demand, in the event of cancellation of a contract for future
services, more than the total of:

(a) five percent of the cash price, but not to exceed fifty dollars,

(b) a pro rata portion of the total price, representing the proportion
of services used or completed.

In addition, the seller may receive or demand the cost of any
ancillary goods which the buyer has consumed or wishes to retain after
cancellation of the contract. In no instance shall the seller collect
more than the full contract price from the buyer.

3. Within ten days after a contract for future consumer services has
been cancelled, the seller shall tender to the buyer any payments made
in excess of the amounts permitted to be retained pursuant to
subdivision two of this section.

4. Cancellation. Cancellation shall occur:

(a) when the buyer mails to the seller notice of his intent to cancel,

(b) where the seller has actual notice of the buyer's intention to
cancel, or

(c) where the buyer fails to attend consecutive scheduled classes or
lessons constituting at least twenty-five percent of the total lessons
or time contracted for, without informing the seller in writing that he
intends to remain enrolled.

5. The contract forms used by the seller shall conspicuously disclose
the seller's cancellation provisions in compliance with subdivisions
two, three, and four of this section and shall contain the following
notice in ten point bold face type:

If you cancel this contract (the seller) may keep only five percent of
the cash price, but not to exceed fifty dollars, and a portion of the
contract price based upon the lessons or services you have used. You may
notify the seller of your intent to cancel by mail, addressed to (the
seller) at (seller's address).

6. Nothing in this section shall be construed so as to nullify or
impair any right or rights which a buyer may have against a seller at
common law, by statute, or otherwise.