136.02 Contracts.

(1) A future service contract shall be in writing and for a stated number of months. No contractor may request or receive more than 12 months' unearned customer fee in prepayment from a customer.

(2) No future service contract may contain a renewal clause, or provide that the customer has an option to enter into a subsequent contract at a stated price.

(3) A future service contract shall provide that assignees, purchasers, or other transferees of the rights of the contractor are subject to all claims and defenses of the customer against the contractor arising out of the future service contract.

(4) A customer has the right to cancel, for whatever reason, within the first 3 months of a future service contract or within 3 days of delivery of the customer's first purchase of goods or rental of videotapes costing more than $25 made through the contract, whichever occurs first. All unearned customer fees shall be refunded promptly upon cancellation. In the event of cancellation within the first 15 days of the contract no penalty may be assessed to the customer. Every cancellation shall be made in writing by the customer to the contractor, and is deemed to be made when mailed or hand delivered to the contractor. Every refund shall be made within 20 days of the request for cancellation.

(5) A contractor shall provide a customer with written notice, at or before the time of execution of the contract, of the customer's right to cancel under this section.

(6) Upon cancellation the member is obligated to pay for any goods ordered for purchase or videotape ordered for rental, if ordered prior to cancellation subsequent to the 3rd business day after contracting and delivered at any time within 3 months after such cancellation.

(7) Subsections (1) to (6) do not apply to a future service contract if all of the following are true:

(a) The future service contract is in writing and provides for a term not longer than 3 years, except that a future service contract under this subsection may be extended if the customer affirmatively agrees to an extension in writing at the time of the extension.

(b) The future service contract provides that assignees, purchasers, or other transferees of the rights of the contractor are subject to all claims and defenses of the customer against the contractor arising out of the future service contract.

(c) The future service contract permits the customer to cancel the future service contract by mailing or hand delivering to the contractor written notice before midnight of the 3rd day after the date on which the customer signed the future service contract and the future service contract imposes no liability on the customer for such a cancellation and entitles the customer to receive, not more than 20 days after such a cancellation, a refund of the entire customer fee paid for the future service contract.

(d) The future service contract contains an attached separate page that contains all of the following:

1. A caption printed in boldface, uppercase type of not less than 10-point size entitled “CANCELLATION AND REFUNDS."

2. A provision under the caption stating: “RIGHT TO CANCEL. You are permitted to cancel this contract until midnight of the 3rd day after the date on which you signed the contract. If within this time period you decide you want to cancel this contract, you may do so by notifying .... (the seller) by any writing mailed or delivered to .... (the seller) at the address shown on the contract within the previously described time period. If you do so cancel, any payments made by you will be refunded within 20 days after notice of cancellation is delivered, and any evidence of any indebtedness executed by you will be canceled by .... (the seller) and arrangements will be made to relieve you of any further obligation to pay the same."

(e) The future service contract provides that a purchase order must specify a date and address of delivery for each item purchased and that the customer may cancel an order and demand refund of any payment the customer made for that order if the goods that the customer ordered are not delivered on or before the delivery date specified in the purchase order or not delivered to the address where the customer requested delivery of the goods, unless the future service contract specifies otherwise.

(f) The future service contract permits the seller to change the date or address of delivery specified in the purchase order only if the customer consents in writing to the change.

(g) The future service contract provides that a contract must return to a customer the full amount of a refund due to the customer under par. (e) without penalty not more than 20 days after the customer has demanded such a refund.

History: 1975 c. 209; 1985 a. 324; 2009 a. 115.