§1822. Surety bond

A. A business opportunity seller shall maintain a surety bond issued by a surety company authorized to do business in this state in the amount of fifty thousand dollars. The bond shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the seller's dishonesty, unfair or deceptive practice, breach of the contract for the business opportunity sale or any duty arising therefrom, or violation of law.

B. A business opportunity agent, whether an independent contractor, a broker, or an employee of the seller, shall maintain a surety bond issued by a surety company authorized to do business in this state in the amount of twenty-five thousand dollars. The bond shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the agent's dishonesty, unfair or deceptive practice, breach of a duty, or violation of law.

C. The department may at any time require a seller or agent to file a new or additional bond in the amount of the original bond whenever he deems the security of a bond required by this Section to be unsatisfactory or finds that a bond has become insufficient to satisfy all claims accrued or contingent against the principal.

D. The state or any person claiming against the bond may maintain an action for damages or other relief against the principal or the surety, or both. The liability of the surety for all breaches of the conditions of the bond provided herein shall in no event exceed the amount of the bond.

E. The seller and agent shall file the bonds required of them with the department before doing any business in this state, including advertising or soliciting. New or additional bonds shall be filed before continuing business in this state.

F. Whoever violates the provisions of Subsections A, B, or E of this Section shall be guilty of a misdemeanor, punishable by a fine of five hundred dollars and by imprisonment for not more than six months.

G. The bonding requirements of this Section shall apply only to business opportunities as defined in R.S. 51:1821(1)(a), (b), or (c).

H. The term of a bond required by this Section shall be continuous. The surety on said bond may terminate the bond upon giving a sixty-day written notice to the assistant secretary and the principal; however, the liability of the surety for the acts of the principal shall continue during the sixty-day period. The notice shall not release the surety from liability which accrues before the termination becomes final, but which is discovered after that date.

Acts 1988, No. 625, §6; Acts 2001, No. 819, §1.