CHAPTER 543

HOUSE BILL NO. 526

AN ACT TO AMEND CHAPTER 44, TITLE 6 OF THE DELAWARE CODE RELATING TO HOME SOLICITATION OR "DOOR-TO-DOOR" SALES.

WHEREAS, the provisions of Chapter 44, Title 6 of the Delaware Code, the Delaware Home Solicitation Sales Act, which are directly inconsistent with, or which guarantee lesser rights than, the Federal Trade Commission Trade Regulation Rule concerning a cooling-off period for door-to-door sales are annulled by that Rule or sellers are exempted by the Rule complying with such provisions; and

WHEREAS, there are significant differences between the definition of terms provided by the Federal Rule and the Delaware Home Solicitation Sales Act; and

WHEREAS, certain provisions of the Delaware Home Solicitation Sales Act offer more protection to consumers and thus are not annulled or exempted by the Federal Rule; and

WHEREAS, in order to achieve greater compliance with the Delaware Home Solicitation Sales Act and the Federal Rule for the benefit of Delaware Consumers, it is desirable to amend the Delaware Home Solicitation Sales Act to more closely conform it to the Federal Rule while preserving its more stringent provisions; and

WHEREAS, the provisions of the Federal Trade Commission Trade Regulation concerning a cooling•off period for door-to-door sales provide that more stringent State laws governing door-to-door sales will not be annulled or limited by the Federal Rule.

NOW, THEREFORE:

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Amend Chapter 44, Title 6 of the Delaware Code by striking said Chapter in its entirety and substituting in lieu thereof a new Chapter which shall read as follows:

"CHAPTER 44. HOME SOLICITATION SALES §4401. Declaration of Purpose.

This Chapter shall be interpreted and administered so as to give greatest effect to the public policy of this State, which declares that it is a basic right of every Delaware citizen to be free of, and protected from, high-pressure door-to-door sales tactics and the resultant inequities to the consumer found in certain ambiguous or misleading contracts, poor quality merchandise, and the quick discounting of evidences of indebtedness.

§4402. Short Title.

This Chapter may be known and cited as the Home Solicitation Sales Act.

§4403. Definitions.

The following words, terms and phrases, when used in this Chapter, shall have the meanings ascribed to them except where the context clearly indicates a different meaning:

(a) 'Door-to-door sale' shall mean a sale, lease or rental of consumer goods or services with a purchase price of twenty-five dollars ($25.00) or more, whether under single or multiple contracts, in which the seller or his representative personally solicits the sale, including those in response to or following an invitation by the buyer, and the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller. The term 'door-to-door sale' does not include a transaction:

(1) made pursuant to prior negotiations in the course of a visit by the buyer to a retail business establishment having a fixed permanent location where the goods are exhibited or the services are offered for sale on a continuing basis:

(2) in which the consumer is accorded the right of resession by the provisions of the Consumer Credit Protection Act (15 U.S.C. 1635) or regulations issued pursuant thereto;

(3) in which the buyer has initiated the contact and the goods or services are needed to meet a bona fide immediate personal emergency of the buyer, and the buyer furnishes the seller with a separate dated and signed personal statement in the buyer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within three business days; or

(4) in which the buyer has initiated the contact and the transaction is conducted and consummated entirely by mail or telephone; or

(5) in which the buyer has initiated the contact and specifically requested the seller to visit his home for the purpose of repairing or performing maintenance upon the buyer's personal property. If in the course of such a visit, the seller sells the buyer the right to receive additional services or goods other than replacement parts necessarily used in performing the maintenance or in making the repairs, the sale of those additional goods or services would not fall within his exclusion; or

(6) 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. Except as provided above, the term door-to-door sale shall include any sale solicited and consummated via any telephone.

(b) 'Consumer goods or services' shall mean goods or services 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.

() 'Seller' shall mean any person, partnership, corporation, or association engaged in the door-to- door sale of consumer goods or services.

(a) 'Place of business' shall mean the main or permanent branch office or local address of a seller.

() 'Purchase price' shall mean the total price paid or to be paid for the consumer goods or services, including all interest and service charges.

(a) 'Business day' shall mean any calendar day except Saturdays, Sundays or legal holidays (as that term is defined in Chapter 5, Title 1 of the Delaware Code).

§4404. Unlawful Practices.

The provisions of §2513 (b) (2) of Title 6 of the Delaware Code notwithstanding, in connection with any door-to-door sale, it is an unlawful practice within the meaning of §2513 of Title 6 of the Delaware Code for any seller to:

(a) Fail to furnish the buyer 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; e.g., Spanish, 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 seller, and in immediately proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold-face 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.'

Beginning one year after the effective date of this section, such statement shall be printed in an ink of a conspicuous color other than that used for the rest of the contract and/or receipt.

(b) Fail to furnish each buyer, at the time he signs the door-to-door sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned 'NOTICE OF CANCELLATION', which shall be attached to the contract or receipt and easily detachable, and which shall contain in ten-point bold-face type the following information and statements in the same language; e.g., Spanish, as that used in the contract:

`NOTICE OF CANCELLATION

(enter date of transaction)
Date

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 TEN (10) BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR CANCELLATION NOTICE, AND ANY SECURITY INTEREST ARISING OUT OF THE TRANSACTION WILL BE CANCELLED.

IF YOU CANCEL, YOU MUST MAKE AVAILABLE TO THE SELLER AT YOUR RESIDENCE, IN SUBSTANTIALLY AS GOOD CONDITION AS WHEN RECEIVED, ANY GOODS DELIVERED TO YOU UNDER THIS CONTRACT OR SALE; OF YOU MAY IF YOU WISH COMPLY WITH THE INSTRUCTIONS OF THE SELLER REGARDING THE RETURN SHIPMENT OF THE GOODS AT THE SELLER'S EXPENSE AND RISK.

IF YOU DO NOT AGREE TO RETURN THE GOODS TO THE SELLER OR IF THE SELLER DOES NOT PICK THEM UP WITHIN TWENTY (20) DAYS OF THE DATE OF YOUR NOTICE OF CANCELLATION, YOU MAY RETAIN OR DISPOSE OF THE GOODS WITHOUT ANY FURTHER OBLIGATION.

TO CANEL 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)

(c) Fail, before furnishing copies of the 'Notice of Cancellation' to the buyer, to complete both copies by entering the name of the seller, the address of the seller'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 buyer may give Notice of Cancellation.

(d) Include in any door-to-door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this Rule including specifically his right to cancel the sale in accordance with the provisions of this Rule.

() Fail to inform each buyer orally, at the time he signs the contract or purchases the goods or services, of his right to cancel.

(a) Misrepresent in any manner the buyer's right to cancel.

(b) Fail or refuse to honor any valid Notice of Cancellation by a buyer and within ten business days after the receipt of such Notice, to

(i) refund all payments made under the contract or sale; (ii) return any goods or property traded in, in substantially as good condition as when received by the seller; (iii) cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction.

(h) 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 goods or services were purchased.

() Fail, within ten business days of receipt of the buyer's Notice of Cancellation, to notify him whether the seller intends to repossess or to abandon any shipped or delivered goods.

§4405. Enforcement.

In addition to any remedies the buyer may have at law or in equity, the provisions of §8612 of Title 29 of the Delaware Code shall apply to violations of this Chapter."

Section 2. If any provision of this Act or the

application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applictions of the Act which can be given effect without the invalid provision or application, and to that end the provisions of this Act are declared to be severable.

Section 3. This Act shall be come effective thirty

days after its approval by the Governor.