Printable Format50-640. Door-to-door sales; cancellation; required disclosures; notice of cancellation; definition. (a) Except as provided in subsection (c)(1)(C), in addition to any right otherwise to revoke, a consumer has the right to cancel a door-to-door sale made within this state until midnight of the third business day after the day on which the consumer signs an agreement or offer to purchase which includes the disclosures required by this section.
(b) In connection with any door-to-door sale made within this state, it constitutes an unfair and deceptive act or practice within the meaning of K.S.A. 50-626, and amendments thereto, for any supplier to:
(1) Fail to furnish the consumer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, Spanish for example, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the supplier, and in immediate proximity to the space reserved in the contract for the signature of the consumer or on the front page of the receipt if a contract is not used and in boldface type of a minimum size of 10 points, a statement in substantially the following form:
"YOU THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT." For purposes of the required notices under this section, the term "buyer" shall have the same meaning as the term "consumer."
(2) Fail to furnish each consumer, at the time the consumer signs the door-to-door sales contract or otherwise agrees to buy consumer property or services from the supplier, a completed form in duplicate, captioned "NOTICE OF CANCELLATION," which shall be attached to the contract or receipt and be easily detachable, and which shall contain in 10-point boldface type the following information and statements in the same language, Spanish for example, as that used in the contract:
NOTICE OF CANCELLATION
(Enter date of transaction)
___________________________
YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION, WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE.
IF YOU CANCEL, ANY PROPERTY TRADED IN, ANY PAYMENTS MADE BY YOU UNDER THE CONTRACT OR SALE, AND ANY NEGOTIABLE INSTRUMENT EXECUTED BY YOU WILL BE RETURNED WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR CANCELLATION NOTICE, AND ANY SECURITY INTEREST ARISING OUT OF THE TRANSACTION WILL BE CANCELED.
IF YOU CANCEL, YOU MUST MAKE AVAILABLE TO THE SELLER AT YOUR RESIDENCE, IN SUBSTANTIALLY AS GOOD CONDITION AS WHEN RECEIVED, ANY PROPERTY DELIVERED TO YOU UNDER THIS CONTRACT OR SALE; OR YOU MAY, IF YOU WISH, COMPLY WITH THE INSTRUCTIONS OF THE SELLER REGARDING THE RETURN SHIPMENT OF THE PROPERTY AT THE SELLER'S EXPENSE AND RISK.
IF YOU DO MAKE THE PROPERTY AVAILABLE TO THE SELLER, AND IF THE SELLER DOES NOT PICK SUCH PROPERTY UP WITHIN 20 DAYS OF THE DATE OF YOUR NOTICE OF CANCELLATION, YOU MAY RETAIN OR DISPOSE OF THE PROPERTY WITHOUT ANY FURTHER OBLIGATION. IF YOU FAIL TO MAKE THE PROPERTY AVAILABLE TO THE SELLER, OR IF YOU AGREE TO RETURN THE PROPERTY TO THE SELLER AND FAIL TO DO SO, THEN YOU REMAIN LIABLE FOR PERFORMANCE OF ALL OBLIGATIONS UNDER THE CONTRACT.
TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE, OR SEND A TELEGRAM,
TO ______________________________________________________
(Name of Seller)
AT _______________________________________________________
(Address of Seller's Place of Business)
NOT LATER THAN MIDNIGHT OF __________________.
(Date)
I HEREBY CANCEL THIS TRANSACTION.
________________ ________________________________________
(Date) (Buyer's Signature)
(3) Fail, before furnishing copies of the "notice of cancellation" to the consumer, to complete both copies by entering the name of the supplier, the address of the supplier's place of business, the date of the transaction, and the date, not earlier than the third business day following the date of the transaction, by which the consumer may give notice of cancellation.
(4) Include in any door-to-door sale contract or receipt any confession of judgment or any waiver of any of the rights to which the consumer is entitled under this section including specifically such consumer's right to cancel the sale in accordance with the provisions of this section.
(5) Fail to inform each consumer orally, at the time such consumer signs the contract or purchases the property or services, of such consumer's right to cancel.
(6) Misrepresent in any manner the consumer's right to cancel.
(7) Fail or refuse to honor any valid notice of cancellation by a consumer and within 10 business days after the receipt of such notice, to (i) refund all payments made under the contract or sale; (ii) return any property traded in, in substantially as good condition as when received by the supplier; (iii) cancel and return any negotiable instrument executed by the consumer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction.
(8) Negotiate, transfer, sell, or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the contract was signed or the property or services were purchased.
(9) Fail, within 10 business days of receipt of the consumer's notice of cancellation, to notify the consumer whether the supplier intends to repossess or to abandon any shipped or delivered property.
(c) For the purposes of this section the following definitions shall apply:
(1) "Door-to-door sale" means a sale, lease or rental of consumer property or services with a purchase price of $25 or more, whether under single or multiple consumer transactions, in which the supplier or the supplier's representative personally solicits the sale, including those in response to or following an invitation by the consumer, and the consumer's agreement or offer to purchase is made at a place other than the place of business of the supplier. The term "door-to-door sale" does not include a transaction:
(A) Made pursuant to prior negotiations in the course of a visit by the consumer to a retail business establishment having a fixed permanent location where the property is exhibited or the services are offered for sale on a continuing basis; or
(B) in which the consumer is accorded the right of rescission by the provisions of the consumer credit protection act (15 USCS 1635) or regulations issued pursuant thereto; or
(C) in which the consumer has initiated the consumer transaction and the property or services are needed to meet a bona fide immediate personal emergency of the consumer, and the consumer furnishes the supplier with a separate dated and signed personal statement in the consumer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within three business days; or
(D) conducted and consummated entirely by mail or telephone; and without any other contact between the consumer and the supplier or its representative prior to delivery of the property or performance of the services; or
(E) in which the consumer has initiated the transaction and specifically requested the supplier to visit the consumer's home for the purpose of repairing or performing maintenance upon the consumer's real or personal property. If in the course of such a visit, the supplier sells the consumer the right to receive additional services or property other than replacement parts necessarily used in performing the maintenance or in making the repairs, the sale of the additional property or services would not fall within this exclusion; or
(F) pertaining to the sale or rental of real property, to the sale of insurance or to the sale of securities or commodities by a broker-dealer registered with the securities and exchange commission; or
(G) that occurs on the state fairgrounds during the annual Kansas state fair between a consumer and a vendor who has been authorized by the state fair management to do business on the state fairgrounds.
(2) "Place of business" means the main or permanent branch office of a supplier.
(3) "Purchase price" means the total price paid or to be paid for the consumer property or services, including all interest and service charges.
(4) "Business day" means any calendar day except Sunday, or any legal holiday as defined by K.S.A. 60-206 and amendments thereto.
History: L. 1973, ch. 217, § 18; L. 1974, ch. 230, § 6; L. 1976, ch. 236, § 9; L. 1991, ch. 159, § 12; L. 1998, ch. 156, § 1; July 1.
KANSAS COMMENT, 1973
1. A consumer has a right to cancel a home solicitation sale pursuant to subsection (a). The notice of cancellation must be in writing, given to the seller at the address stated in the agreement signed by the buyer, and given prior to midnight of the third business day after the day the buyer signs an agreement or offer to purchase which complies with subsection (b). These are the only formal requirements of the act with respect to the buyer's cancellation. This right to cancel is new to Kansas law.
Although the act does not require that a notice of cancellation be mailed, it is assumed that this will be the normal method of cancellation. Notice of cancellation is given at the time of mailing. The risk of non-receipt of a mailed notice of cancellation is placed on the seller, but the buyer has the burden of proving that the notice was properly mailed.
Goods and services are frequently sold to a buyer at his home because of an emergency. Common examples are emergency repairs to broken water pipes, furnaces, appliances and the like. Since such transactions may come within the definition of home solicitation sales, sellers may be reluctant to perform services or deliver goods before expiration of the 3-day cancellation period. Application of the right to cancel to emergency situations would have the undesirable effect of seriously deterring sellers from performing in time to deal with emergencies. Subsection (a)(5) therefore provides that the buyer may not cancel a sale if the stated conditions are met. The word "emergency" is not defined; the intention of the subsection is to protect the seller who in good faith relies on the statement of the buyer that an emergency exists and who performs immediately at the request of the buyer.
The right to cancel provided by subsection (a) is not exclusive. It in no way affects the right that the buyer may have independent of the act to revoke an offer to purchase which has not been accepted by the seller, or to rescind because of fraud, duress, breach of warranty or other causes.
2. The 3-day period for cancellation does not begin to run until the buyer signs a written agreement or offer to purchase complying with subsection (b). To comply, the agreement or offer must contain the date on which the buyer actually signs it and the caption and statement required by subsection (b)(2). Under subsection (b)(3), the seller may use forms prescribed by the Federal Trade Commission in any statute, rule or regulation which becomes effective at the federal level; compliance with the federal form is compliance with this section. The purpose of subsection (b)(3) is of course to avoid duplication and overlap.
3. Under subsection (c)(1), the 10-day period during which the seller must tender to the buyer any payments and any evidence of indebtedness runs from the time the sale has been cancelled, i.e., from the time the buyer delivers a written notice of cancellation to the seller or deposits the notice in a mailbox.
Under subsection (c)(2), if the seller took a trade-in as part of a home solicitation sale which has been cancelled he must tender the goods traded in. The risk of loss of damage to the goods rests with the seller. If he cannot tender the goods in substantially as good condition as when received, the buyer may elect to take in cash the trade-in allowance fixed by the parties in the contract. This provision is designed to protect the buyer where goods traded in have not been tendered or have been damaged. In such a case he is given an election to sue either for return of the goods or for the trade-in allowance.
As a means of assuring compliance by the seller, subsection (c)(3) provides that the buyer may retain possession of any goods delivered to him by the seller with respect to a sale cancelled under subsection (a) (1) until the seller complies with his obligations under subsection (c). While in possession of the goods the buyer has a lien as security for his claim against the seller.
4. Subsections (d)(1) and (2) state the obligations of the buyer in the case of a cancelled home solicitation sale. To protect the buyer from the seller who may seek to impose an obligation on the buyer by unreasonable delays in demanding delivery of the goods the seller must demand possession within a reasonable time and 30 days is presumed to be a reasonable time. Goods not demanded within a reasonable time become the property of the buyer without obligation to pay for them. To protect the seller the section imposes on the buyer a duty to take reasonable care of the goods while they are in his possession. Except for this duty of care, under subsection (d)(2) the goods delivered under a home solicitation sale are at the seller's risk both prior to and after cancellation by the buyer; a buyer may cancel a sale after destruction of the goods without his fault if the destruction occurred during the 3-day cancellation period.
With respect to home solicitation sales involving the sale of services it is not possible to restore the parties to their original positions if services have been performed prior to cancellation. Subsection (d)(3) discourages a seller from performing any services during the 3-day cancellation period by requiring him to act entirely at his own risk.
Law Review and Bar Journal References:
"The New Kansas Consumer Legislation," Barkley Clark, 42 J.B.A.K. 147, 190 (1973).
Consumer protection in Tenth Judicial District, William P. Coates, Jr., 44 J.B.A.K. 67, 71 (1975).
"A New Kansas Approach to an Old Fraud," consumer protection, Polly Higdon Wilhardt, 14 W.L.J. 623, 634 (1975).
"The Untapped Potential of the Kansas Consumer Protection Act," Amy Fellows, 74 J.K.B.A. No. 4, 24 (2005).
CASE ANNOTATIONS
1. Automobile dealer's sale of used truck not in category of door-to-door sale. Moore v. R.Z. Sims Chevrolet-Subaru, Inc., 241 K. 542, 553, 738 P.2d 852 (1987).
2. Provision allowing cancellation of door-to-door sale applies to sales to businesses. Dealer's Leasing, Inc. v. Allen, 26 K.A.2d 745, 750, 994 P.2d 651 (1999).