Senate File 347 - Introduced
SENATE FILE
BY McCOY
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to specified types of business solicitations,
2 providing an exception from applicability of certain
3 requirements for sales conducted by mail, the telephone, or
4 the internet.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 2566XS 83
7 rn/rj/8
PAG LIN
1 1 Section 1. Section 552A.1, subsection 1, Code 2009, is
1 2 amended to read as follows:
1 3 1. "Buying club" means a corporation, partnership,
1 4 unincorporated association, or other business enterprise which
1 5 sells or offers for sale to the general public generally
1 6 memberships or certificates of membership.
1 7 Sec. 2. Section 552A.1, subsection 3, Code 2009, is
1 8 amended to read as follows:
1 9 3. "Membership" means certificates, memberships, shares,
1 10 bonds, contracts, stocks, or agreements of any kind or
1 11 character issued upon any plan offered generally to the
1 12 general public entitling the holder to purchase merchandise,
1 13 materials, equipment, or service, either from the issuer or
1 14 another person designated by the issuer, either under a
1 15 franchise or otherwise, whether it be at a discount, at cost
1 16 plus a percentage, at cost plus a fixed amount, at a fixed
1 17 price, or on any other similar basis.
1 18 Sec. 3. Section 552A.3, Code 2009, is amended to read as
1 19 follows:
1 20 552A.3 RIGHT OF CANCELLATION == REQUIREMENT OF WRITING.
1 21 The requirements of sections 555A.1 through 555A.5,
1 22 relating to door=to=door sales, shall apply to sales of buying
1 23 club memberships, irrespective of the place or manner of sale
1 24 or the purpose for which they are purchased, except those that
1 25 are conducted and consummated entirely by mail, the telephone,
1 26 or the internet and without any other contact between the
1 27 buyer and the seller or its representative prior to delivery
1 28 of the goods or performance of the service. In addition to
1 29 the requirements of chapter 555A, a contract shall not be
1 30 enforceable against a person acquiring resulting from any such
1 31 sale of a membership in a buying club shall not be enforceable
1 32 against the purchaser unless the contract is in writing and
1 33 signed by the purchaser.
1 34 Sec. 4. Section 555A.1, subsection 3, paragraph a,
1 35 subparagraph (4), Code 2009, is amended to read as follows:
2 1 (4) Conducted and consummated entirely by mail or, the
2 2 telephone, or the internet and without any other contact
2 3 between the buyer and the seller or its representative prior
2 4 to delivery of the goods or performance of the services.
2 5 EXPLANATION
2 6 This bill relates to sales of buying club memberships that
2 7 are conducted by mail, by telephone, or over the internet
2 8 rather than sold in person directly between the seller and the
2 9 purchaser.
2 10 Code section 552A.3 currently applies the requirements of
2 11 Code sections 555A.1 through 555A.5, dealing primarily with
2 12 notice of cancellation rights and contract rescission in
2 13 door=to=door sales situations, to the sale of buying club
2 14 memberships. The bill restricts the applicability of those
2 15 provisions to sales other than sales conducted and consummated
2 16 entirely by mail, the telephone, or the internet and without
2 17 any other contact between the buyer and the seller or its
2 18 representative prior to delivery or performance. This change
2 19 is consistent with Code section 555A.1, subsection 3,
2 20 paragraph "a", subparagraph (4), which exempts such
2 21 transactions from the definition of a door=to=door sale.
2 22 The bill also rephrases a provision in Code section 552A.3
2 23 regarding lack of nonenforceability of a buying club
2 24 membership contract unless the contract is in writing and
2 25 signed by the purchaser, specifying that this provision
2 26 applies to a purchaser, as opposed to a "person acquiring" a
2 27 buying club membership contract.
2 28 The bill adds internet sales to the exemptions from the
2 29 definition of a door=to=door sale, to promote consistency
2 30 between the respective chapters.
2 31 LSB 2566XS 83
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