N.Y. Personal Property Law § 412-a: Cancellation of contracts for future consumer services

§ 412-a. Cancellation of contracts for future consumer services. 1.

Contract for future consumer services. As referred to in this section,

the term "contract for future consumer services" shall mean any contract

entered into for consumer services to be performed in the future on a

lesson-by-lesson or class-by-class basis and offered, sold or provided

by correspondence schools which for the purposes of this section shall

mean any plan or method used by any person or persons, firm, corporation

or other organization for giving instruction in any form or manner by

correspondence under contract.

2. No person, including any business entity, may contract to receive,

or demand, in the event of cancellation of a contract for future

services, more than the total of:

(a) five percent of the cash price, but not to exceed fifty dollars,

and

(b) a pro rata portion of the total price, representing the proportion

of services used or completed.

In addition, the seller may receive or demand the cost of any

ancillary goods which the buyer has consumed or wishes to retain after

cancellation of the contract. In no instance shall the seller collect

more than the full contract price from the buyer.

3. Within ten days after a contract for future consumer services has

been cancelled, the seller shall tender to the buyer any payments made

in excess of the amounts permitted to be retained pursuant to

subdivision two of this section.

4. Cancellation. Cancellation shall occur:

(a) when the buyer mails to the seller notice of his intent to cancel,

or

(b) where the seller has actual notice of the buyer's intention to

cancel, or

(c) where the buyer fails to attend consecutive scheduled classes or

lessons constituting at least twenty-five percent of the total lessons

or time contracted for, without informing the seller in writing that he

intends to remain enrolled.

5. The contract forms used by the seller shall conspicuously disclose

the seller's cancellation provisions in compliance with subdivisions

two, three, and four of this section and shall contain the following

notice in ten point bold face type:

If you cancel this contract (the seller) may keep only five percent of

the cash price, but not to exceed fifty dollars, and a portion of the

contract price based upon the lessons or services you have used. You may

notify the seller of your intent to cancel by mail, addressed to (the

seller) at (seller's address).

6. Nothing in this section shall be construed so as to nullify or

impair any right or rights which a buyer may have against a seller at

common law, by statute, or otherwise.