The online versions of legislation provided on this website are not official. Enrolled bills are the final version passed by the Ohio General Assembly and presented to the Governor for signature. The official version of acts signed by the Governor are available from the Secretary of State's Office in the Continental Plaza, 180 East Broad St., Columbus.
|
S. B. No. 196 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
| |
Cosponsors:
Senators Gillmor, Seitz
A BILL
To amend sections 1334.05, 1334.06, 1334.10, 1334.12,
1334.13, and 1334.15 of the Revised Code to make
changes to Ohio's Business Opportunity Plan Law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1334.05, 1334.06, 1334.10, 1334.12,
1334.13, and 1334.15 of the Revised Code be amended to read as
follows:
Sec. 1334.05. (A) In addition to any other right otherwise
to revoke an offer or remedy available to a purchaser under
sections 1334.01 to 1334.15 of the Revised Code, a purchaser has
the right to cancel an agreement selling or leasing to him the
purchaser a business opportunity plan until, in accordance with
the following conditions:
(1) If the seller complies with divisions (A)(7), (B), and
(C) of section 1334.06 of the Revised Code, the purchaser may
cancel the agreement at any time before midnight of the fifth
business day after the day on which the purchaser signs the
agreement. Cancellation
(2) If the seller has failed to comply with divisions (A)(7),
(B), or (C) of section 1334.06 of the Revised Code, the purchaser
may cancel the agreement any time within twelve months after the
day on which the purchaser signs the agreement.
(B) Cancellation under this section is evidenced by the
purchaser giving written notice of cancellation to the seller at
the address stated in the agreement. The purchaser may deliver the
notice by mail, telegram, manual delivery, or other personal
delivery. Notice of cancellation given by a purchaser need not
take a particular form and is sufficient if it indicates in
writing the intent of the purchaser not to be bound. Written
notice of cancellation shall be effective upon the date of
postmark. Telegram delivery is effective when the telegram is
ordered. Manual delivery or other personal delivery is effective
when delivered to the seller or to the seller's address, whichever
is first.
Sec. 1334.06. (A) Every agreement selling or leasing a
business opportunity plan shall be in writing and a copy of the
executed agreement and all other documents the seller requires the
purchaser to sign shall be given to the purchaser at the time they
are signed. The agreement shall contain at least the following:
(1) The terms and conditions of payment including the initial
payment or the promissory note, additional payments, and down
payment required;
(2) A full description of the acts or services the seller
will undertake to perform for the purchaser;
(3) The seller's principal business address and the name and
address of its agent authorized to receive service of process in
this state;
(4) The business form of the seller, whether corporate,
partnership, or otherwise;
(5) The delivery date of the goods the seller is to deliver
to the purchaser to begin operation of the business opportunity
plan and the location for delivery;
(6) A complete description of the buy-back or security
arrangement, if any;
(7) Notice of the purchaser's right to cancel the agreement
in at least ten-point boldface type, in the following form and in
close proximity to the space reserved in the agreement for the
signature of the purchaser:
"You, the purchaser, may cancel this transaction at any time
prior to midnight of the fifth business day after the date you
sign this agreement. See the attached notice of cancellation for
an explanation of this right."
(B) A completed form, in duplicate, captioned "notice of
cancellation," shall be attached to the agreement signed by the
purchaser and be easily detachable and shall contain in ten-point
boldface type, the following statement:
"Notice of cancellation
................... (enter
Enter date of
Transaction
transaction)
You may cancel this transaction, without penalty or
obligation, within five business days from the above date. If you
cancel, any payments made by you under the agreement, and any
negotiable instrument executed by you will be returned within ten
business days following the seller's receipt 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 business address all goods delivered to you under
this agreement; or 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 make the goods
available to the seller and the seller does not pick them up
within twenty days of the date of your notice of cancellation, you
may retain or dispose of them without further obligation. If you
fail to make the goods available to the seller, or if you agree to
return them to the seller and fail to do so, then you remain
liable for the performance of all obligations under this
agreement. To cancel 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 (enter
date).
I hereby cancel this transaction.
.............................. |
.............................. |
|
|
(Date) |
(Purchaser's signature)" |
|
|
(C) Before furnishing copies of the notice of cancellation to
the purchaser, the seller shall complete both copies by entering
the name of the seller, the address of the seller's place of
business, the date of the agreement, and the date of the last day
on which the purchaser may cancel.
(D) Until the seller has complied with this section, the
purchaser may cancel the agreement by notifying the seller by
mailing, delivering, or telegraphing written notice to the seller
of the purchaser's intention to cancel. The five-day period within
which the purchaser may cancel the agreement prescribed by this
section begins to run from the time the seller complies with
divisions (A), (B), and (C) of this section.
(E) In connection with the sale or lease of a business
opportunity plan, no seller shall:
(1) Fail to integrate into the written agreement all material
statements, representations, or promises that were made orally
prior to execution of the written agreement by the seller to the
purchaser and were not integrated into any other written document
previously provided to the purchaser by the seller;
(2) Include in any agreement, any confession of judgment or
any waiver of any rights to which the purchaser is entitled under
sections 1334.01 to 1334.15 of the Revised Code, including
specifically the right to cancel the agreement in accordance with
this section and section 1334.05 of the Revised Code;
(3) Fail to inform each purchaser orally, at the time an
agreement is signed, of the right to cancel;
(4) Misrepresent in any manner the purchaser's right to
cancel;
(5) Fail or refuse to honor any valid notice of cancellation
by a purchaser and within ten business days after receipt of the
notice to:
(a) Refund all payments made under the agreement;
(b) Cancel and return any note, negotiable instrument, or
other evidence of indebtedness executed by the purchaser in
connection with the agreement and take any action necessary to
reflect the termination of any security interest or lien created
under the agreement;
(c) Notify the purchaser if the seller intends to repossess
or abandon any goods delivered to the purchaser.
(6) Negotiate, transfer, sell, or assign any note or other
evidence of indebtedness during the time within which a purchaser
may cancel;
(7) Commence delivery of any goods or provide any services
during the time within which the purchaser may cancel.
Sec. 1334.10. (A) The courts of common pleas, and municipal
or county courts within their respective monetary jurisdiction,
have jurisdiction over any seller or broker with respect to any
act or practice covered by sections 1334.01 to 1334.15 of the
Revised Code, or with respect to any claim arising from the sale
or lease of a business opportunity plan subject to such sections.
(B) A final judgment against a seller or broker under
sections 1334.01 to 1334.15 of the Revised Code is admissible as
prima-facie evidence of the facts upon which it is based in
subsequent proceedings under sections 1334.01 to 1334.15 of the
Revised Code against the same seller or broker or their successors
or assigns.
(C) No action under sections 1334.01 to 1334.15 of the
Revised Code may be brought to recover for a transaction more than
five years after either the occurrence of the violation or the
date on which the parties executed the agreement selling or
leasing the business opportunity plan, whichever is earlier.
(D) In any case arising under section 1334.08 or 1334.09 of
the Revised Code, if a seller or broker shows by a preponderance
of the evidence that a violation, or failure to meet the
requirements of the exemption provided for in section 1334.13 of
the Revised Code, resulted from a bona fide error notwithstanding
the maintenance of procedures reasonably adopted to avoid the
error, no civil penalties shall be imposed against the seller or
broker under division (D) of section 1334.08 of the Revised Code,
no party shall be awarded attorney's fees under division (B) of
section 1334.09 of the Revised Code, and monetary recovery shall
not exceed the amount of actual damages resulting from the
violation. In addition, a purchaser may, in an action brought
within one year after the date on which the agreement selling or
leasing the business opportunity plan was executed, recover all
sums paid to the seller less the fair market value, at the time of
delivery, of any goods supplied by the seller that are not
returned to the seller.
Sec. 1334.12. Sections 1334.01 to 1334.15 of the Revised
Code do not apply to:
(A) The relationship between an employer and an employee, or
among general business partners;
(B) Membership in a bona fide cooperative association of
producers of agricultural products authorized by section 1 of the
"Capper-Volstead Act," 42 Stat. 388 (1922), 7 U.S.C. 291; or an
organization, operated on a cooperative basis by and for
independent retailers, which wholesales goods or furnishes
services primarily to its member-retailers;
(C) An agreement for the use of a trademark, service mark,
trade name, seal, advertising, or other commercial symbol
designating a person who offers a bona fide service for the
evaluation, testing, or certification of goods, commodities, or
services;
(D) An agreement between a licensor and a single licensee to
license a trademark, trade name, service mark, advertising, or
other commercial symbol where such license is the only one of its
general nature and type to be granted by the licensor with respect
to that trademark, trade name, service mark, advertising or other
commercial symbol;
(E) The transfer of a registered security, as defined by
division (B) of section 1707.01 of the Revised Code;
(F) Any transaction in which either the seller or purchaser
is licensed pursuant to and the transaction is governed by Chapter
4735. of the Revised Code;
(G) A publisher, broadcaster, printer, or other person
engaged in the dissemination of information or the reproduction of
printed or pictorial matter insofar as the information or matter
has been disseminated or reproduced on behalf of others without
knowledge that it violates sections 1334.01 to 1334.15 of the
Revised Code;
(H) A license granted by a general merchandise retailer that
allows the licensee to sell goods or services to the general
public under the retailer's trademark, trade name, or service
mark, advertising, or other commercial symbol if the general
merchandise retailer has been doing business in this state
continuously for five years prior to the granting of the license
and the general merchandise retailer also sells the same goods or
services directly to the general public;
(I) The sale of a business which for at least six months
previous to the sale has:
(1) Been operated from a given specific location;
(2) Been open for business to the general public;
(3) Had all equipment and supplies necessary for operating
the business located at the specific location.
(J) The sale or lease of goods or services to a purchaser who
also offers, sells, or distributes other goods or services that
are not:
(1) Supplied by the seller or other person enumerated in
division (D)(1) of section 1334.01 of the Revised Code; or
(2) Utilized with the goods or services supplied by the
seller or other person enumerated in division (D)(1) of section
1334.01 of the Revised Code.
(K) An agreement permitting a person to offer, sell, or
distribute goods or services on or about premises occupied by a
retailer-grantor primarily for the retailer-grantor's own
merchandising activities, where the goods or services are not
purchased from the retailer-grantor or persons with whom the
lessee is required or advised to do business by the
retailer-grantor.
(L) A seller who has both of the following:
(1)(a) A net worth on a consolidated basis, according to its
most recent audited financial statement, of not less than
five
fifteen million dollars;
(b) A net worth, according to its most recent audited
financial statement, of not less than one million dollars and the
seller is at least eighty per cent owned by a corporation which
has a net worth on a consolidated basis, according to its most
recent audited financial statement, of not less than five fifteen
million dollars;
(2) Had at least twenty-five purchasers conducting business
at all times during the five-year period immediately preceding the
sale or lease of the business opportunity plan, or has conducted
the business which is the subject of the business opportunity plan
continuously for not less than five years preceding the sale or
lease of the business opportunity plan.
(M) The sale or lease of goods or services to a purchaser who
has:
(1) For for at least six months previously, bought goods or
services which were sold under the same trademark or trade name,
or which were produced by the seller and received on resale of
such goods or services an amount at least equal to the amount of
the initial payment or promissory note; or
(2) Previously been engaged, for at least one year, in the
business of selling or distributing the goods or services that are
the subject of the business opportunity plan, and earned from that
business a gross income of at least twenty-five thousand dollars
in any one year.
(N) The renewal or extension of an existing business
opportunity plan, provided the original agreement was for at least
one year.
Sec. 1334.13. Except for division (H) of section 1334.03 and
section 1334.04 of the Revised Code, sections 1334.01 to 1334.15
of the Revised Code do not apply to:
(A) Any transaction that fully complies in all material
respects with the trade regulation rule of the federal trade
commission, "disclosure requirements and prohibitions concerning
franchising and business opportunity ventures," 16 C.F.R. 436.1 et
seq., as may be amended from time to time, that is in effect on
the date of the transaction;
(B) Any transaction in which the prospective purchaser, at
least ten business days before the execution of an agreement
selling or leasing a business opportunity plan, receives a
document containing truthful, accurate, and complete disclosures
that fully complies with the requirements of the "uniform
franchise offering circular" adopted by the midwest securities
commissioners association on September 2, 1975, and the
"guidelines for preparation of the uniform franchise offering
circular and related documents" adopted by the association on July
20, 1977 that fully complies in all material respects with the
trade regulation rule of the federal trade commission, "disclosure
requirements and prohibitions concerning business opportunities,"
16 C.F.R. 437.1 et seq., as may be amended from time to time, that
is in effect on the date of the transaction.
Sec. 1334.15. (A) The general assembly declares that the
offer and sale of business opportunity plans is a matter affected
with a public interest. The general assembly further declares that
it is the intent of this chapter to protect prospective purchasers
of business opportunity plans by requiring that sellers provide
the purchasers with the information necessary to make an
intelligent decision about the business opportunity plan being
offered, and that this chapter represents a fundamental public
policy for this state.
(B) The remedies of sections 1334.01 to 1334.15 of the
Revised Code are in addition to remedies otherwise available for
the same conduct under federal, state, or local law. Any waiver by
a purchaser of sections 1334.01 to 1334.15 of the Revised Code or
choice of law provision that deprives a purchaser who is an Ohio
resident of the benefit of those sections is contrary to public
policy and is void and unenforceable.
Section 2. That existing sections 1334.05, 1334.06, 1334.10,
1334.12, 1334.13, and 1334.15 of the Revised Code are hereby
repealed.
|
|