CHAPTER 407a

CLOSING-OUT SALES

Table of Contents

Sec. 21-35a. Definitions.

Sec. 21-35b. State license. Deposit. Application. Time within which to submit application. Application procedure if promoter is used. Documentation to be made available for inspection by commissioner. License number and termination date to be displayed in advertisements. License to be posted at point of sale.

Sec. 21-35c. License to expire ninety days after issuance or on termination date in application. Special deposit to be used to satisfy claims against licensee. Return of license. Lost licenses.

Sec. 21-35d. Municipal license.

Sec. 21-35e. Listed items only to be sold.

Sec. 21-35f. Additional goods not to be ordered within sixty days of license application.

Sec. 21-35g. Continuation of business after sale prohibited.

Sec. 21-35h. Violation an unfair trade practice. Penalty.

Sec. 21-35i. Regulations.

Sec. 21-35j. Exceptions to applicability of chapter.

Sec. 21-35k. Criminal or civil penalty not applicable to advertising media; when.

Sec. 21-35l. Suspension or revocation of license. Civil penalty.

Sec. 21-35m. Promoters must register with commissioner. Applications for registration. Fee. Renewal. Agreement between promoter and closing-out sale licensee. Suspension or revocation of registration. Civil penalty.

Sec. 21-35n. Civil penalty for failure to obtain license or registration.


Sec. 21-35a. Definitions. For the purposes of this chapter, “closing-out sale” means all sales advertised, represented or held forth under the designation of “going out of business”, “selling out”, “liquidation”, “lost our lease”, “forced to vacate”, “moving to a new location”, or any other designation of like meaning; “person” means any individual, partnership, voluntary association, limited liability company or corporation; and “promoter” means a person who performs or offers to perform for a person holding a closing-out sale any service to facilitate or assist in such sale, including, but not limited to, advertising or sales.

(P.A. 76-281, S. 1; P.A. 83-243, S. 1; P.A. 91-163, S. 1; P.A. 95-79, S. 72, 189.)

History: P.A. 83-243 amended section to include the designation “moving to a new location”; P.A. 91-163 added definition of “promoter”; P.A. 95-79 redefined “person” to include a limited liability company, effective May 31, 1995.

Sec. 21-35b. State license. Deposit. Application. Time within which to submit application. Application procedure if promoter is used. Documentation to be made available for inspection by commissioner. License number and termination date to be displayed in advertisements. License to be posted at point of sale. (a) No person shall advertise, offer for sale or sell a stock of goods, wares or merchandise under the description of closing-out sale unless he shall have obtained a license from the Commissioner of Consumer Protection authorizing the conducting of such sale for each location at which such sale is to be conducted.

(b) Each person desiring to conduct a closing-out sale shall deposit with the Commissioner of Consumer Protection the sum of five hundred dollars or a dollar amount equal to one per cent of the wholesale cost of the inventory filed pursuant to subsection (c) of this section whichever is greater; provided that no such deposit shall exceed five thousand dollars. Upon application in the sum to be prescribed by said commissioner and upon deposit to said commissioner of a further sum of one hundred dollars as a state license fee, said commissioner shall issue to the applicant a “closing-out sale license”, authorizing him to advertise and conduct a sale consistent with that requested in the application.

(c) Each person applying for a “closing-out sale license” shall make such application therefor in writing and under oath stating all the facts relating to the reasons and character of such sale, including the opening and terminating dates of the proposed sale, a complete inventory of the goods, wares and merchandise actually on hand in the place where such sale is to be conducted in the manner prescribed by the commissioner, and all details necessary to locate exactly and identify fully the goods, wares or merchandise to be sold, and shall disclose the names and residences of owner or owners or partners in whose interest the sale is to be conducted. No license shall be issued unless the application is submitted to the commissioner at least five days prior to the requested commencement date of the closing-out sale. Any applicant who uses the services of a promoter as defined in section 21-35a for a closing-out sale shall include a signed and dated copy of the agreement between such applicant and such promoter as part of the application. The commissioner may, by regulation, request such other information to be submitted by the applicant as he deems necessary.

(d) Each person holding a closing-out sale license issued under this section shall file with the Commissioner of Consumer Protection a monthly report, commencing one month from the opening date of the sale, enumerating all goods, wares or merchandise sold, transferred or otherwise disposed of by the licensee or his agents, servants or employees during that month pursuant to the closing-out sale. Said commissioner shall prescribe the form for such reporting.

(e) All documentation concerning the goods, wares and merchandise to be included in such closing-out sale, including but not limited to purchase orders and delivery statements, shall be made available by the licensee for inspection by an authorized representative of the commissioner during regular business hours.

(f) Each person holding a closing-out sale license shall (1) include the license number in any advertisement, together with clear and conspicuous disclosure of the termination date of such closing-out sale license, and (2) post such license in a conspicuous location at the point of sale.

(P.A. 76-281, S. 2; P.A. 91-163, S. 2; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1.)

History: P.A. 91-163 amended Subsec. (a) to require that a license be obtained for each location at which a sale is to be conducted, amended Subsec. (c) to require that sales be conducted “in the manner prescribed by the commissioner”, to provide that no license be issued unless the application has been submitted at least five days before the start of the closing-out sale, that any applicant who uses a promoter is required to include with the application a copy of the agreement between the applicant and the promoter and to provide that the commissioner could request more information to be submitted and added new Subsec. (e) requiring that documentation concerning the merchandise to be included in the sale be made available for inspection by the commissioner and new Subsec. (f) requiring that licensees include the license number and termination date in any advertisement and post the license at the point of sale; June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004.

Sec. 21-35c. License to expire ninety days after issuance or on termination date in application. Special deposit to be used to satisfy claims against licensee. Return of license. Lost licenses. (a) All state licenses issued under this chapter shall expire ninety days from the date thereof or on the termination date designated in the original application, whichever occurs first. Each state license upon expiration, or voluntary surrender prior to expiration, shall be returned to the Commissioner of Consumer Protection who shall cancel the same, endorse the date of delivery and cancellation thereon and place the same on file. The commissioner shall then hold the special deposit of each such licensee for a period of sixty days and, after satisfying all claims made upon the same under this section, shall return such deposit or such portion of the same, if any, as may remain in the commissioner’s hands to the licensee depositing it, or as directed by the licensee in the original application. Each deposit made with the commissioner shall be subject, as long as it remains in the commissioner’s hands, to attachment or execution on behalf of creditors or consumers whose claims may arise in connection with business done under the authorized sale. Said commissioner may also be held to answer as garnishee under process of foreign attachment, where such process is used, in any civil action brought against any licensee. The commissioner shall pay over, under order of court or upon execution of a judgment, such sum of money as the commissioner may be chargeable with upon the commissioner’s disclosure or otherwise. Such deposit shall not be paid over by said commissioner on garnishee process or to such licensee until the expiration of the sixty-day period specified in this section. Such deposit shall also be subject to the payment of any fine or penalty imposed on the licensee for violation of any provision of this chapter, provided written notice of the name of such licensee and of the amount of such fine or penalty shall be given during such period to the commissioner by the clerk of the court in which such fine or penalty was imposed.

(b) Whenever any state license, issued under the provisions of section 21-35b has been lost or destroyed, so that such license cannot, after the expiration of the term thereof, be returned or surrendered under the provisions of subsection (a) of this section, the licensee may file an affidavit with the Commissioner of Consumer Protection describing such license with sufficient particularity to identify the same and the claimant thereunder, and showing such loss or destruction; and the commissioner, upon such proof of loss and identity as is satisfactory to him, may accept such affidavit in lieu of the return or surrender of such license, and such licensee shall have the same right to the return of the special deposit made by him as though he had returned or surrendered his license.

(P.A. 76-281, S. 3; P.A. 83-243, S. 2; P.A. 91-163, S. 3; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1; P.A. 06-196, S. 253.)

History: P.A. 83-243 amended section to permit attachment or execution in behalf of consumers and to require commissioner to pay over upon execution of a judgment; P.A. 91-163 amended Subsec. (a) to replace provision re three-month expiration with ninety-day expiration and to delete provision re sixty-day extension; June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004; P.A. 06-196 made technical changes in Subsec. (a), effective June 7, 2006.

Sec. 21-35d. Municipal license. Before selling under the state license prescribed in section 21-35b in any town, city or borough, each person conducting a closing-out sale shall make application for a municipal license to the selectmen or other authority of such town, city or borough authorized to issue licenses therein; and, unless the fee therefor is fixed as herein provided, shall file with them a true statement, under oath, of the average quantity and value of the stock of goods, wares and merchandise kept or intended to be kept or exposed by him for sale. Such selectmen or other authority shall submit such statement to the assessors of the town, who, after such examination and inquiry as they deem necessary, shall determine such average quantity and value, and shall forthwith transmit a certificate thereof to such selectmen or other authority. Thereupon such selectmen or other authority shall authorize the town clerk, upon the payment by the applicant of a fee equal to the taxes assessable in such town, city or borough under the last-preceding tax levy therein upon an amount of property of the same valuation, to issue to him a license authorizing such closing-out sale in such municipality. Such authority may authorize the issue of such license without the filing of such statement, upon the payment of a license fee fixed by it. Upon payment of such fee, such town clerk shall issue such license, which shall remain in force as long as the licensee continuously keeps and exposes for sale in such municipality such stock of goods, wares or merchandise, but not later than the first day of October following its date. Upon such payment and proof of payment of all other license fees, if any, chargeable upon local sales, such town clerk shall record the state license of such transient vendor in full, shall endorse thereon the words “local license fees paid” and shall affix thereto his official signature and the date of such endorsement.

(P.A. 76-281, S. 4.)

Sec. 21-35e. Listed items only to be sold. No goods, wares or merchandise other than those listed in the inventory required in this chapter shall be included in any closing-out sale and no sale shall continue beyond a reasonable date to be specified in the required application, except, that an extension may be authorized upon proper showing of need, such extension being contingent on the submitting of a revised inventory showing the items listed on the original inventory remaining unsold and not listing any goods not included in the original application and inventory.

(P.A. 76-281, S. 5.)

Sec. 21-35f. Additional goods not to be ordered within sixty days of license application. No person in contemplation of a closing-out sale under a license as provided for in section 21-35b shall order any goods, wares or merchandise for the purpose of selling and disposing of the same at such sale, and any unusual purchases and additions to the stock of such goods, wares or merchandise within sixty days prior to the filing of application for a license to conduct such sale shall be presumptive evidence that such purchases and additions to stock were made in contemplation of such sale.

(P.A. 76-281, S. 6.)

Sec. 21-35g. Continuation of business after sale prohibited. No person shall, upon conclusion of a closing-out sale continue that business which has been represented as terminal, under the same name, or under a different name, at the same location.

(P.A. 76-281, S. 7.)

Sec. 21-35h. Violation an unfair trade practice. Penalty. (a) Any person who advertises, holds, conducts or carries on any sale of goods, wares or merchandise under the description of “closing-out sale” contrary to the provisions of this chapter or violates any of the provisions of this chapter shall be guilty of a class C misdemeanor.

(b) Violation of any provision of sections 21-35a to 21-35n, inclusive, shall constitute an unfair or deceptive act or practice as defined in section 42-110b.

(P.A. 76-281, S. 8; P.A. 83-243, S. 3; P.A. 91-163, S. 4; P.A. 12-80, S. 172.)

History: P.A. 83-243 increased penalty from $50 and 60 days to $500 and 90 days and provided that violations of Secs. 21-35a to 21-35k, inclusive, shall constitute an unfair trade practice; P.A. 91-163 amended Subsec. (b) to include new Secs. 21-35l to 21-35n, inclusive, in the list of provisions which, if violated, would constitute an unfair or deceptive act or practice as defined in Sec. 42-110b; P.A. 12-80 amended Subsec. (a) to rephrase provisions and change penalty from a fine of not more than $500 or imprisonment of not more than 90 days or both to a class C misdemeanor.

Cited. 231 C. 707.

Sec. 21-35i. Regulations. The Commissioner of Consumer Protection may promulgate such regulations as he finds necessary to administer and enforce the provisions of this chapter.

(P.A. 76-281, S. 9; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1.)

History: June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004.

Sec. 21-35j. Exceptions to applicability of chapter. The provisions of this chapter shall not apply to or affect sales or persons conducting such sales pursuant to an order or process of a court of competent jurisdiction or to any state marshal, constable or other public or court officer or to any other person acting under the license, direction or authority of any state or federal court selling goods, wares or merchandise in the course of their official duties or to end of the season sales or to sales limited to closing out a particular brand or line of goods.

(P.A. 76-281, S. 10; P.A. 00-99, S. 60, 154.)

History: P.A. 00-99 replaced reference to sheriff with state marshal, effective December 1, 2000.

Sec. 21-35k. Criminal or civil penalty not applicable to advertising media; when. No criminal or civil penalty in this chapter shall apply to acts done by the publisher, owner, agent or employee of a newspaper or periodical, or radio or television station in the publication or dissemination of any advertisement, where such publisher, owner, agent or employee does not have actual knowledge of the false, misleading or deceptive character of the advertisement.

(P.A. 76-281, S. 11; P.A. 91-163, S. 8.)

History: P.A. 91-163 amended Sec. 21-35k to provide that no criminal or civil penalty in the chapter would apply to advertising media, rather than “nothing in section 21-35b or 21-35h”.

Sec. 21-35l. Suspension or revocation of license. Civil penalty. The commissioner, after providing notice and conducting a hearing in accordance with the provisions of chapter 54, may revoke or suspend the closing-out sale license of any person for (1) conduct of a character likely to mislead, deceive or defraud the public or the commissioner; (2) engaging in any untruthful or misleading advertising; (3) utilizing the services of a promoter who was not registered under this chapter during the time of the closing-out sale, or (4) violating any provision of this chapter relating to closing-out sales or any regulation established pursuant to section 21-35i or 42-110b. In addition, the commissioner, after providing notice and conducting a hearing in accordance with the provisions of said chapter 54, may impose a civil penalty of not more than five hundred dollars for each offense. Each violation with respect to each separate item of merchandise shall be deemed a single offense.

(P.A. 91-163, S. 5.)

Sec. 21-35m. Promoters must register with commissioner. Applications for registration. Fee. Renewal. Agreement between promoter and closing-out sale licensee. Suspension or revocation of registration. Civil penalty. (a) No person shall act as a promoter, as defined in section 21-35a, for any closing-out sale unless he has first registered with the commissioner. Applications for registration and for the renewal of a registration shall be in writing, under oath in the form prescribed by the commissioner and shall be accompanied by a fee of two hundred dollars. The application shall contain such information as the commissioner shall require. Each registration shall be valid for one year and may be renewed for additional one-year periods.

(b) Each agreement between a promoter and a closing-out sale licensee shall: (1) Be in writing; (2) contain the date of the agreement; (3) contain the entire agreement between the promoter and licensee; (4) contain the name and address of the promoter; and (5) be signed by both parties.

(c) The commissioner, after providing notice and conducting a hearing in accordance with the provisions of chapter 54, may revoke or suspend the registration of any person as a promoter for (1) conduct of a character likely to mislead, deceive or defraud the public or the commissioner; (2) engaging in any untruthful or misleading advertising; or (3) violating any provision of this chapter relating to closing-out sales or any regulation established pursuant to section 21-35i or 42-110b. In addition, the commissioner, after providing notice and conducting a hearing in accordance with the provisions of chapter 54 may impose a civil penalty of not more than five hundred dollars for each offense. Each violation with respect to each separate item of merchandise shall be deemed a separate offense.

(P.A. 91-163, S. 6; P.A. 94-36, S. 10, 42; June Sp. Sess. P.A. 09-3, S. 278.)

History: P.A. 94-36 amended Subsec. (a) to eliminate provision requiring annual license renewal “upon application and payment of the fee required by this section”, effective January 1, 1995; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to increase fee from $100 to $200.

See Sec. 21a-10(b) re staggered schedule for registration renewals.

Sec. 21-35n. Civil penalty for failure to obtain license or registration. The commissioner, after providing notice and conducting a hearing in accordance with the provisions of chapter 54, may impose a civil penalty of not more than five hundred dollars for each offense on any person who fails to obtain any license or registration required by this chapter. Each day for which the violation occurs shall be deemed a separate offense.

(P.A. 91-163, S. 7.)