RETAIL TRADE;

RETAIL TRADE;

Connecticut laws/regulations;

You asked for summaries of two state laws concerned with door-to-door sales, the state Home Solicitation Sales Act and the law concerning hawkers and peddlers.

SUMMARY

The Home Solicitation Sales Act gives a consumer the right to cancel a home solicitation sale until midnight of the third business day following the transaction. A “home solicitation sale” is a transaction involving consumer goods or services that occurs anywhere other than the seller’s own place of business. The seller must return any payment or other consideration he received within 10 business days after receiving the cancellation notice.

The act requires home solicitation sales agreements to be signed and dated by the buyer. The contracts must state a buyer’s cancellation rights and be written in the same language used during the oral presentation. A separate “Notice of Cancellation” must accompany them. The notice must state a buyer’s rights, the transaction date, and the last possible day to cancel. The statute prescribes the form of the notice.

The Home Solicitation Sales Act also prohibits sellers from engaging in certain deceptive practices. For example, sellers may not include provisions in contracts that waive a consumer’s rights or misrepresent a buyer’s right to cancel.

A seller who violates the law is subject to a penalty of imprisonment for up to 90 days, a fine of up to $ 500, or both. Further, a buyer may void any agreement that does not comply with the act.

State law authorizes towns to adopt hawker and peddler ordinances. The ordinances may require these sellers to obtain annual permits that may cost as much as $ 200. The law allows towns to waive the permit fee for charities and nonprofit tax-exempt organizations and requires towns to waive the fee for certain veterans. Anyone who violates a local ordinance is subject to a fine of up to $ 199.

HOME SOLICITATION SALES ACT

Buyer’s Cancellation Rights

The act gives buyers the right to cancel a home solicitation sale until midnight of the third business day following the date of the transaction. The act defines “home solicitation sale” as a sale, lease, or rental of consumer goods or services in which the seller or his representative personally solicits the sale at any place other than the seller’s place of business. The act applies whether the agreement is made in single or multiple contracts. “Consumer goods or services” is defined as those purchased, leased, or rented primarily for personal, family, or household purposes, including courses of instruction or training, regardless of the purpose for which they are taken.

The cancellation takes place when the buyer gives written notice at the address specified by the seller for cancellation or when the notice bearing the address is deposited in a mailbox. The cancellation notice is effective if it indicates the buyer’s intention not to be bound by the sale (CGS § 42-134a & 42-137).

Seller’s Duties Upon Cancellation

The act requires sellers to return any payments or other notes to the buyer within 10 business days following the receipt of the cancellation notice. Any goods traded in by the buyer must be returned in substantially as good condition as when received. If the seller fails to return any such goods, the buyer may recover an amount equal to the trade-in allowance stated in the agreement. Until the seller complies with these requirements, the buyer may keep any goods delivered by the seller and has a lien on them (CGS § 42-138).

Buyer’s Duties Upon Cancellation

The buyer must offer any received goods to the seller within the 20 days following the sale at his own address. The buyer is not obligated to give them to the seller anywhere else. The buyer must take reasonable care of the goods before the cancellation and during the next 20 days. Except for the buyer’s duty of care, the goods are at the seller’s risk. If the seller has performed any services before cancellation, the buyer is not obligated to compensate the seller. If the services alter the buyer’s property, the seller must substantially restore it (CGS § 42-139).

Agreements Must be Signed and Dated by Buyer

Under the act, home solicitation sales agreements are not effective unless they are signed and dated by the buyer (CGS § 42-135a).

Copies of Receipts or Contracts

Under the act, home solicitation sales agreements are not effective unless the seller has provided the buyer with a fully completed receipt or copy of all contracts and related documents at the time the agreement is signed. The contract must be in the same language as that principally used in the oral sales presentation, show the date of the transaction, contain the name and address of the seller, and make the following statement in the immediate proximity to the space reserved for the buyer’s signature in boldface type of at least 10 points: 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 (CGS § 42-135a(1)).

Cancellation Notice

Under the act, home solicitation sales agreements are not effective unless the seller has provided the buyer with a completed form, in duplicate, captioned “NOTICE OF CANCELLATION. ” The notice must be in 10-point boldface type stating that:

1. the buyer can cancel the contract within three business days without penalty or obligation;

2. any payments or anything else given to the seller, including property traded in, and any security interest taken will be returned within 10 business days following the seller’s receipt of the cancellation notice;

3. the buyer must make available to the seller, in substantially as good condition as when received, any goods given under the agreement and that they buyer may, if he wishes, comply with the seller’s instructions concerning the return shipment of the goods at the seller’s expense and risk;

4. if the buyer makes the goods available and the seller does not pick them up within 20 days after the cancellation date, the buyer may keep or dispose of them without further obligation. If the buyer fails to make the goods available, or if he agrees to return the goods and fails to do so, the buyer remains liable under the agreement; and

5. mailing or delivering a signed and dated copy of the cancellation notice cancels the contract.

The copy of the cancellation notice must include (1) the seller’s name and business address and (2) the date by which the notice must be received by the seller (CGS § 42-135a(2)).

Completed Copy of the “Notice of Cancellation”

Under the act, home solicitation sales agreements are not effective unless the seller has given the buyer a notice in which he has entered his name, business address, transaction date, and the date by which the buyer may give the cancellation notice. This date may not be earlier than the third business day after the transaction date (CGS § 42-135a(3)).

Failure to Honor a Cancellation Notice

A home solicitation sales agreement does not become effective if the seller fails to honor a cancellation notice within 10 business days and fails to (1) refunding all payments, (2) returning any traded-in goods or property in substantially as good condition as when received, (3) canceling and returning any negotiable instrument signed by the buyer in connection with the agreement; and (4) canceling and returning any contract (CGS § 42-135a(7)).

Other Requirements

The act also makes these agreements ineffective if the seller (1) includes a confession of judgment or a waiver of rights to which the buyer is entitled under the act, including the three-day right to rescind the contract; (2) fails to tell the buyer orally, at the time the contract is signed, of the buyer’s right to rescind; (3) misrepresents in any way the buyer’s right to rescind; (4) negotiates, transfers, sells, or assigns any note or evidence of indebtedness before midnight of the fifth business day after the transaction date; or (5) fails to notify the buyer, within 10 business days after receiving the buyer’s cancellation notice, whether the seller intends to repossess or abandon any shipped or delivered goods (CGS § 42-135a(4), (5), (6), (8), and (9)).

Notes or Evidence of Indebtedness

The act prohibits any note or evidence of indebtedness given by the buyer in connection with a home solicitation sale from being dated earlier than the transaction date. Any transfer of such a note or evidence must be deemed an assignment and the transferee is subject to all claims and defenses of the buyer against the seller. The act requires all notes to state conspicuously that the instrument is based on a home solicitation sale, is subject to the act, and is not negotiable (CGS § 42-136).

Prohibition Against Contingent Commissions or Rebates

The act prohibits sellers from offering to pay a commission or giving a rebate to the buyer for the names of prospective customers if earning the commission or rebate is contingent on an event subsequent to the transaction (CGS § 42-140).

Penalty

A violator is subject to imprisonment for up to 90 days, a fine of up to $ 500, or both. Further, violating the act’s provisions concerning the buyer’s cancellation rights and duties upon cancellation or the sales agreement constitutes an unfair or deceptive trade practice. Sales made in violation of the act may be voided by the buyer (CGS § 42-141).

Exemptions

The act does not apply to transactions:

1. made following prior negotiations that occurred at the seller’s place of business;

2. in which the buyer initiated the contact, the goods or services are needed to meet the buyer’s bona fide immediate emergency, and the buyer has provided the seller with a handwritten signed statement that describes the emergency situation and expressly acknowledges and waives the right to cancel the sale within three business days;

3. conducted and consummated entirely by mail or telephone and without any other contact before delivery of goods or provision of services;

4. in which the buyer initiated the contact and specifically asked the seller to visit the buyer’s home for the purpose of making repairs to the buyer’s property (The act applies to the provision of any additional goods or services sold during the course of this visit. );

5. concerning the sale or rental of real property, the sale of insurance, the sale of newspapers, or the sale of securities or commodities by registered broker-dealers; and

6. made pursuant to a home party plan demonstration and the total price does not exceed $ 25 (CGS § 42-134a(a)).

HAWKERS AND PEDDLERS

State law gives towns the power to adopt reasonable ordinances about hawkers and peddlers and sets conditions on that power. The law defines “hawker or peddler” as a person, whether as a principal or agent, who goes from town to town or from place to place in the same town selling or bartering, or carrying goods or merchandise on foot or from any animal or vehicle for sale or barter (CGS § 21-36).

The law authorizes towns to adopt hawker and peddler ordinances concerning its public streets (except limited access highways) and on adjacent property. The ordinance can apply whether the goods are sold publicly, privately, at auction, or sold from house to house.

The ordinances may require that each hawker or peddler obtain an annual permit, which may cost up to $ 200. They may also require that a permit applicant have a sales tax permit obtained from the Department of Revenue Services. They must require that permit holders display them conspicuously.

The ordinances may allow the town to waive any permit fee for charities and nonprofit organizations exempt from taxation under Section 501 of the Internal Revenue Code.

State law prohibits towns from collecting the permit fee from anyone who (1) has served at time of war as defined by state statute, (2) has lived in the state for at least two years, and (3) is the principal (rather than the agent).

The law exempts: (1) sales by farmers and gardeners of their own produce, including fruit, vegetables, and flowers; (2) sales and distribution of milk, tea, coffee, spices, groceries, meats, and baked goods; (3) sales on approval; (4) conditional sales of merchandise; and (5) taking orders for future delivery when full payment is not required at the time of the solicitation (CGS § 21-37).

Anyone who engages in the business of hawking or peddling without complying with a municipal ordinance is subject to a fine of up to $ 199.

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