136.06 Representations; contract disclosures.

(1) With respect to representations made to a prospective customer to induce the customer to sign a future service contract, the contractor shall clearly and accurately describe:

(a) The source of purchase of any merchandise named by its brand, whether such source is from a manufacturer, wholesaler, retailer, or other supplier.

(b) Where no brand name is stated, the comparative numbers, expressed in percentages of purchases made by the contractor from manufacturers, wholesalers, retailers or other suppliers.

(c) The existence, if any, of purchasing arrangements which the contractor has with all manufacturers, wholesalers, retailers or other suppliers, including a statement of the duration of the arrangements.

(d) At the initiation of any solicitation of a prospective customer, the fact that the contractor is offering and selling contracts for future services.

(e) At or prior to the time of execution of a future service contract by the customer, in writing, the step-by-step procedure for ordering the purchase of goods or services or the rental of videotapes.

(f) The contractor's policy with respect to retention or refund of trade, prompt payment or other discounts, and the maximum amount of such discounts expressed as a percentage of the contractor's cost for the goods or services purchased or the videotapes rented.

(2) All future service contracts shall disclose:

(a) The disposition of all trade discounts, prompt payment discounts or other discounts received by the contractor, and if the contractor retains such discounts, the maximum discount which the contractor may receive expressed as a percentage of the contractor's cost for the goods or services. Where the contract provides for a return of any discount to the customer, or where the contract fails to disclose the disposition of such discounts the contractor shall promptly refund such discounts to the customer upon receiving them.

(b) All normal charges assessed on an item that are to be paid by the customer, such as freight costs, the contractor's markup differential and other costs. Such disclosure shall also be made on each order placed through the contractor, separately and in specific monetary amounts.

(c) That a manufacturer's or other dealer's supply agreement with the contractor may not be permanent, if such is in fact true.

(d) Upon whom falls the risk of damage in shipment of goods pursuant to a customer's order.

(e) The contractor's policy with respect to return of ordered goods, cancellation of orders by the customer and refunds for such cancellation or return.

(f) The contractor's policy with respect to warranties or guarantees on goods ordered.

(3) Every contract made in violation of this chapter is void and unenforceable as contrary to public policy.

(4) Any waiver by a customer of this chapter or of a customer's rights under this chapter is contrary to public policy and is void and unenforceable.

History: 1975 c. 209; 1985 a. 324; 1993 a. 482.