Title 9 . Law

Chapter 16 . Executive Branch Code of Ethics

Section 40. Written contract required

9 AAC 16.040. Written contract required

(a) The seller shall include in a contract or agreement provided to a buyer or prospective buyer the information required under AS 45.66.090 and this section. The information must be set out in at least 12-point typeface.

(b) In the contract or agreement, the seller shall include a detailed description of the business opportunity being offered.

(c) Payment terms to be provided under AS 45.66.090 (1) must include

(1) any down payment required under the contract;

(2) any initial payment required under the contract;

(3) any additional payment required under the contract; and

(4) a statement that if the contract requires a buyer to pay as a down payment more than 20 percent of the initial payment before delivery to the buyer of the equipment, supplies, products, or services to be furnished under the terms of the contract, the excess above the 20 percent must be placed in an escrow account that meets the requirements of AS 45.66.110 ; the contract must clearly state the name and address of the financial institution where the escrow account is located and the escrow account number.

(d) In the contract or agreement, the seller shall include the name, mailing address, physical address, and telephone number of

(1) the seller;

(2) each of the seller's agents in the state;

(3) each of the seller's representatives in the state; and

(4) each supplier of products, equipment, or supplies that the seller is to deliver to the buyer.

(e) In addition to providing, under AS 45.66.090 (3), a statement of the form of the seller's business organization, the contract must identify the state where the seller is incorporated or organized.

(f) In providing, under AS 45.66.090 (5), the delivery date of the product, equipment, or supplies being sold or leased, a contract that provides for the periodic delivery of items to the buyer must provide each expected delivery date of the products, equipment, or supplies that the seller is to deliver to the buyer.

(g) To comply with AS 45.66.090 (7), the seller must include in the contract the following statement, conspicuously placed, and in no less than 12-point bold typeface:

STATEMENT OF BUYER'S RIGHT TO CANCEL

1. Under Alaska law, a buyer of a business opportunity may cancel a contract for any reason if the buyer gives notice of the cancellation to the seller within thirty (30) days after signing the contract.

2. A buyer may cancel the contract at any time if the seller engages in any of the following conduct:

(a) fails to comply with the disclosure requirements under AS 45.66.080 or fails to provide a written purchase contract under AS 45.66.090 ;

(b) uses untrue, misleading, incomplete, or deceptive statements in any aspect of advertising, promoting, selling, or offering a business opportunity;

(c) fails, within 30 days after the delivery date specified in the contract, to deliver the products, equipment, supplies, or services required under the contract in order to begin substantial operation of the business opportunity;

(d) fails to provide a location for the business to be started under the contract if the contract requires the seller to provide a location.

3. A notice of cancellation does not have to be on a particular form, but it must be in writing and state the buyer's intention to end the contract.

4. Within 15 days after the notice of cancellation, the seller shall refund to the buyer all payments made and terminate all financial obligations of the buyer. Within 5 days after receiving the refund, the buyer must make available to the seller, at a reasonable time and place, any products, equipment, or supplies delivered by the seller.

History: Eff. 3/23/2005, Register 173

Authority: AS 45.66.090

AS 45.66.240