2014 New York Laws
GBS - General Business
Article 26 - (390 - 399-ZZZ) MISCELLANEOUS
394-B - Limitations on certain contracts for instruction or use of physical or social training facilities.

  394-b.  Limitations  on certain contracts for instruction or use of
  physical or social training facilities. 1. (a)  "Total  contract  price"
  shall  mean  the  total  cash  price paid or to be paid by the buyer for
  instruction or services which are the subject of the written contract.
(b) "Notice of cancellation" shall be deemed to have been provided  by
  a  buyer  by  mailing  or  delivering written notification to cancel the
  contract to the seller or by failing to attend instructional  facilities
  for  a  period  of five consecutive appointment days on which classes or
  the provisions of services which are the subject of  the  contract  were
  prearranged with the buyer.
(c)  "Reasonable  and  fair  service  fee" shall mean no more than ten
  percent of the total  contract  price  for  contracts  of  one  thousand
  dollars  and  under. For contracts over one thousand dollars, reasonable
  and fair service fee shall mean no more than one hundred dollars plus an
  amount equal to five percent  of  the  total  contract  price  over  one
  thousand dollars, not to exceed two hundred fifty dollars.
(d)  "Initial  contract"  shall  mean  the  buyers  first contract for
  services.  Subsequent  contracts  shall  be  referred  to  as  renewals.
  Contracts  for  services  which  are  entered  into,  after  a  lapse of
  contractual service for a period of twelve consecutive months, shall  be
  deemed to be initial contracts.
2.  Any  contract for instruction in physical or social skills, or for
  the use by an individual patron of a dance  hall  studio,  ballroom,  or
  other  physical  or other social training facility, which is measured by
  the life of the person receiving such instruction or  the  use  of  such
  physical  or  social training facility as an individual patron, shall be
  deemed void and unenforceable as contrary to public policy.
3. Any initial contract for instruction in physical or social  skills,
  or for the use by an individual patron of a dance hall studio, ballroom,
  or  other physical or social training facility which requires payment by
  the person receiving such instruction, or the use of  such  physical  or
  social  training facilities, of a total amount in excess of five hundred
  dollars, or granting  to  the  person  furnishing  such  instruction  or
  providing  the use of such facilities, an automatic renewal option where
  the payments to be made during the  original  contract  period  and  the
  option  period  combined are in excess of five hundred dollars, shall be
  valid and enforceable only if: (a) The term of the contract shall be for
  a precisely measured period of years, or any definite part thereof;  and
  (b)  the  payments  to  be  made  thereunder  shall be in instalments so
  computed that the total amounts so paid shall not exceed  by  more  than
  five  percent  the  prorated  cost  of  the  units of instruction or use
  actually received thereunder at the time the latest payment is made; or,
  if no definite number of units of instruction or use is specified in the
  contract, the total amount so paid shall not exceed by  more  than  five
  percent  the  proportion  of  the  total contract price that the expired
  portion of the entire term bears to the whole term of the contract.
4. No contract for services shall be assigned without written  consent
  of the person receiving such instruction or for the use of such physical
  or social training facility.
5.  (a)  Every  contract for services shall provide that such contract
  may be canceled at any time. Notice of cancellation shall  be  delivered
  or  mailed  by certified or registered United States mail at the address
  specified in the contract. Such contract  shall  contain  the  following
  written  information  in  at  least  ten point type: "CONSUMERS RIGHT TO
  CANCELLATION. YOU MAY CANCEL THIS CONTRACT AT ANY TIME BY DELIVERING  OR
  MAILING  BY  CERTIFIED  OR  REGISTERED UNITED STATES MAIL TO THE ADDRESS
  SPECIFIED IN THE CONTRACT. IF YOU CANCEL THE CONTRACT WITHIN  THREE  (3)
  DAYS FROM THE DATE OF RECEIPT, YOU WILL BE ENTITLED TO A FULL REFUND. TO

  CANCEL  A  CONTRACT  WITHIN  THREE  (3) DAYS FROM THE DATE OF RECEIPT BY
  REGISTERED OR CERTIFIED MAIL, SUCH MAIL MUST BE  POSTMARKED  WITHIN  THE
  THREE  (3)  DAY  PERIOD.  AFTER  THE  THREE  (3)  DAY PERIOD, YOU MAY BE
  ASSESSED A REASONABLE AND FAIR SERVICE FEE. IF YOU UTILIZED SERVICES AND
  SUBSEQUENTLY   CANCEL  THE  CONTRACT,  YOU  WILL  BE  CHARGED  ONLY  FOR
  INSTRUCTION SERVICES  ACTUALLY  FURNISHED  AND  A  REASONABLE  AND  FAIR
  SERVICE  FEE,  AS  DEFINED  IN PARAGRAPH (C) OF SUBDIVISION 1 OF SECTION
  394-B OF THE GENERAL BUSINESS LAW. A  BREACH  OF  THIS  PROVISION  SHALL
  SUBJECT  THE  SELLER TO PAY DAMAGES UP TO TWICE THE AMOUNT OF THE ACTUAL
  DAMAGES  PLUS  REASONABLE  ATTORNEYS  FEES."  The  provisions  of   this
  paragraph  shall  be  specifically  set  forth  in  every  contract  for
  services; or in the event that such provisions  are  omitted  therefrom,
  they  shall  be  deemed  a part of such contract by operation of law and
  shall be enforceable as though fully set forth therein.
(b) All moneys paid pursuant to such contract shall be refunded within
  thirty business days of receipt of such notice of cancellation.  If  the
  buyer  has  executed any credit or loan agreement to pay for all or part
  of the service, any such negotiable instrument  executed  by  the  buyer
  shall  also  be  returned within thirty days. Any buyer who cancels such
  contract within three days of execution shall  be  entitled  to  a  full
  refund. After the three day time frame, a seller may assess a reasonable
  and  fair service fee. In addition, the prorated cost of any instruction
  provided may be deducted out of the refund amount.
(c) If a buyer fails to attend instructional facilities for  a  period
  of  five consecutive appointment days on which classes for the provision
  of services which are the subject of the contract were prearranged  with
  the buyer, the contract shall be deemed to be canceled, unless the buyer
  otherwise  provides written consent to maintain the contract. All monies
  shall be  refunded  pursuant  to  paragraph  (b)  of  this  subdivision,
  however,  the  instructional  facility  may withhold monies to cover the
  prorated cost of the prearranged instructional  services  in  which  the
  buyer failed to attend.
6.  Nothing  herein  shall  be  construed  to  apply  to contracts for
  instruction at schools operating  pursuant  to  the  provisions  of  the
  education law.
7. This section shall apply to all contracts to be executed or renewed
  after May first, nineteen hundred sixty-four.
8. Any contract for services which is inconsistent with the applicable
  provisions of this section and any waiver by the buyer of the provisions
  of  this  section  shall be void and unenforceable as contrary to public
  policy.
9. 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.
10. In addition to the remedies hereinbefore  provided,  the  attorney
  general  may  bring  an  action  on behalf of the people of the state to
  restrain further violations of this section, to enforce  the  provisions
  of this section and for such other relief as may be appropriate.
11.  No  provision  of  this  section  shall be deemed to restrict the
  authority of any county, city, town or  village  to  enact  and  enforce
  additional  laws, ordinances or codes, or portions thereof, provided the
  provisions thereof are not inconsistent  with  the  provisions  of  this
  section.