Missouri Revised Statutes

Chapter 407
Merchandising Practices

August 28, 2013




Definitions.

407.010. As used in sections 407.010 to 407.130, the following words and terms mean:

(1) "Advertisement", the attempt by publication, dissemination, solicitation, circulation, or any other means to induce, directly or indirectly, any person to enter into any obligation or acquire any title or interest in any merchandise;

(2) "Documentary material", the original or a copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording, wherever situated;

(3) "Examination of documentary material", the inspection, study, or copying of such material, and the taking of testimony under oath or acknowledgment in respect to any documentary material or copy thereof;

(4) "Merchandise", any objects, wares, goods, commodities, intangibles, real estate or services;

(5) "Person", any natural person or his legal representative, partnership, firm, for-profit or not-for-profit corporation, whether domestic or foreign, company, foundation, trust, business entity or association, and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee or cestui que trust thereof;

(6) "Sale", any sale, lease, offer for sale or lease, or attempt to sell or lease merchandise for cash or on credit;

(7) "Trade" or "commerce", the advertising, offering for sale, sale, or distribution, or any combination thereof, of any services and any property, tangible or intangible, real, personal, or mixed, and any other article, commodity, or thing of value wherever situated. The terms "trade" and "commerce" include any trade or commerce directly or indirectly affecting the people of this state.

(L. 1967 p. 607 1, A.L. 1973 H.B. 55, A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.010 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.

(2003) Merchandising Practices Act applies to deceptive schemes conducted by out-of-state businesses and involving out-of-state consumers. State ex rel. Nixon v. Estes, 108 S.W.3d 795 (Mo.App.W.D.).

(2004) Medical goods and services constitute "merchandise" within definition of section. Freeman Health System v. Wass, 124 S.W.3d 504 (Mo.App.S.D.).



Unlawful practices, penalty--exceptions.

407.020. 1. The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce or the solicitation of any funds for any charitable purpose, as defined in section 407.453, in or from the state of Missouri, is declared to be an unlawful practice. The use by any person, in connection with the sale or advertisement of any merchandise in trade or commerce or the solicitation of any funds for any charitable purpose, as defined in section 407.453, in or from the state of Missouri of the fact that the attorney general has approved any filing required by this chapter as the approval, sanction or endorsement of any activity, project or action of such person, is declared to be an unlawful practice. Any act, use or employment declared unlawful by this subsection violates this subsection whether committed before, during or after the sale, advertisement or solicitation.

2. Nothing contained in this section shall apply to:

(1) The owner or publisher of any newspaper, magazine, publication or printed matter wherein such advertisement appears, or the owner or operator of a radio or television station which disseminates such advertisement when the owner, publisher or operator has no knowledge of the intent, design or purpose of the advertiser; or

(2) Any institution, company, or entity that is subject to chartering, licensing, or regulation by the director of the department of insurance, financial institutions and professional registration under chapter 354 or chapters 374 to 385, the director of the division of credit unions under chapter 370, or director of the division of finance under chapters 361 to 369, or chapter 371, unless such directors specifically authorize the attorney general to implement the powers of this chapter or such powers are provided to either the attorney general or a private citizen by statute.

3. Any person who willfully and knowingly engages in any act, use, employment or practice declared to be unlawful by this section with the intent to defraud shall be guilty of a class D felony.

4. It shall be the duty of each prosecuting attorney and circuit attorney in their respective jurisdictions to commence any criminal actions under this section, and the attorney general shall have concurrent original jurisdiction to commence such criminal actions throughout the state where such violations have occurred.

5. It shall be an unlawful practice for any long-term care facility, as defined in section 660.600, except a facility which is a residential care facility or an assisted living facility, as defined in section 198.006, which makes, either orally or in writing, representation to residents, prospective residents, their families or representatives regarding the quality of care provided, or systems or methods utilized for assurance or maintenance of standards of care to refuse to provide copies of documents which reflect the facility's evaluation of the quality of care, except that the facility may remove information that would allow identification of any resident. If the facility is requested to provide any copies, a reasonable amount, as established by departmental rule, may be charged.

6. Any long-term care facility, as defined in section 660.600, which commits an unlawful practice under this section shall be liable for damages in a civil action of up to one thousand dollars for each violation, and attorney's fees and costs incurred by a prevailing plaintiff, as allowed by the circuit court.

(L. 1967 p. 607 2, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685, A.L. 1992 S.B. 705, A.L. 1994 H.B. 1165, A.L. 1995 H.B. 409, A.L. 2000 S.B. 763, A.L. 2008 S.B. 788)

(2000) Delivery of beer by unlicensed foreign microbrewery without inspection by state authorities and inadequate precautions to prevent sales to minors constituted misrepresentations in violation of section. State ex rel. Nixon v. Beer Nuts, Ltd., 29 S.W.3d 828 (Mo.App.E.D.).

(2001) Sale of motor fuel below cost in violation of the Motor Fuel Marketing Act is not an unfair practice within meaning of section, and thus the Attorney General lacks authority to invoke civil investigative demand power. Ports Petroleum Company, Inc. of Ohio v. Nixon, 37 S.W.3d 237 (Mo.banc).

(2011) Debt collector's alleged deceptive debt collection activities are not in connection with sale or advertisement of merchandise in trade or commerce within meaning of Merchandising Practices Act. State v. Portfolio Recovery Associates, LLC, 351 S.W.3d 661 (Mo.App.E.D.).



Representation of a business at wholesale trade shows or markets--proof of agency required.

407.023. 1. No person who alleges to represent a particular business at a wholesale trade show or market shall rent or lease space at the trade show or market unless he can produce written evidence of the agency relationship or contract status with the business he claims to represent; provided, however, that nothing herein contained shall apply to any trade show or market which in good faith endeavors to obtain evidence of said agency's relationship or contract status.

2. Any violation of this section is an unlawful merchandising practice.

(L. 1982 H.B. 1031)



Civil action to recover damages--class actions authorized, when--procedure.

407.025. 1. Any person who purchases or leases merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 407.020, may bring a private civil action in either the circuit court of the county in which the seller or lessor resides or in which the transaction complained of took place, to recover actual damages. The court may, in its discretion, award punitive damages and may award to the prevailing party attorney's fees, based on the amount of time reasonably expended, and may provide such equitable relief as it deems necessary or proper.

2. Persons entitled to bring an action pursuant to subsection 1 of this section may, if the unlawful method, act or practice has caused similar injury to numerous other persons, institute an action as representative or representatives of a class against one or more defendants as representatives of a class, and the petition shall allege such facts as will show that these persons or the named defendants specifically named and served with process have been fairly chosen and adequately and fairly represent the whole class, to recover damages as provided for in subsection 1 of this section. The plaintiff shall be required to prove such allegations, unless all of the members of the class have entered their appearance, and it shall not be sufficient to prove such facts by the admission or admissions of the defendants who have entered their appearance. In any action brought pursuant to this section, the court may in its discretion order, in addition to damages, injunction or other equitable relief and reasonable attorney's fees.

3. An action may be maintained as a class action in a manner consistent with Rule 23 of the Federal Rules of Civil Procedure and Missouri rule of civil procedure 52.08 to the extent such state rule is not inconsistent with the federal rule if:

(1) The class is so numerous that joinder of all members is impracticable;

(2) There are questions of law or fact common to the class;

(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(4) The representative parties will fairly and adequately protect the interests of the class; and, in addition

(5) The prosecution of separate action by or against individual members of the class would create a risk of:

(a) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class; or

(b) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(6) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(7) The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include:

(a) The interest of members of the class in individually controlling the prosecution or defense of separate actions;

(b) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;

(c) The desirability or undesirability of concentrating the litigation of the claims in the particular forum;

(d) The difficulties likely to be encountered in the management of a class action.

4. (1) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order pursuant to this subdivision may be conditional, and may be altered or amended before the decision on the merits.

(2) In any class action maintained pursuant to subdivision (7) of subsection 3 of this section, the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each member that:

(a) The court will exclude such member from the class if such member so requests by a specified date;

(b) The judgment, whether favorable or not, will include all members who do not request exclusion; and

(c) Any member who does request exclusion may, if such member desires, enter an appearance through such member's counsel.

(3) The judgment in an action maintained as a class action pursuant to subdivision (5) of subsection 3 of this section or subdivision (6) of subsection 3 of this section, whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action pursuant to subdivision (7) of subsection 3 of this section, whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subdivision (2) of this subsection was directed, and who have requested exclusion, and whom the court finds to be members of the class.

(4) When appropriate an action may be brought or maintained as a class action with respect to particular issues, or a class may be divided into subclasses and each subclass treated as a class, and the provisions of this section shall then be construed and applied accordingly.

5. In the conduct of actions to which this section applies, the court may make appropriate orders:

(1) Determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument;

(2) Requiring, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action;

(3) Imposing conditions on the representative parties or on intervenors;

(4) Requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly;

(5) Dealing with similar procedural matters.

6. A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

7. Upon commencement of any action brought pursuant to subsection 1 of this section, the plaintiff or plaintiffs shall inform the clerk of the court in which such action is brought, on forms to be provided by such clerk, that the action is brought pursuant to this section. The clerk of the court shall forthwith inform the attorney general of the commencement of such action, together with a copy of the complaint or other initial pleading, and, upon entry of any judgment or decree in the action, the clerk shall mail a copy of such judgment or decree to the attorney general.

8. Any permanent injunction, judgment or order of the court made pursuant to section 407.100 shall be prima facie evidence in an action brought pursuant to* this section that the respondent used or employed a method, act or practice declared unlawful by section 407.020.

(L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1999 S.B. 1, et al., A.L. 2000 H.B. 1509)

*Word "to" does not appear in original rolls.

(2001) Placing a bet at casino blackjack table is not a purchase within meaning of section. Ziglin v. Players MH, L.P., 36 S.W.3d 786 (Mo.App.E.D.).

(2005) Claim for punitive damages under section requires determination by jury. Scott v. Blue Springs Ford Sales, Inc., 176 S.W.3d 140 (Mo.banc).



Voluntary compliance, assurance made, effect of--violation, penalty.

407.030. 1. In the administration of this chapter, the attorney general may accept an assurance of voluntary compliance with respect to any method, act, use, practice or solicitation deemed to be violative of this chapter from any person who has engaged in or is engaging in such a method, act, use, practice or solicitation. The assurance of voluntary compliance shall be in writing and shall be filed with and subject to the approval of the circuit court of the county in which the alleged violator resides or has his principal place of business, or the circuit court of Cole County. Such assurance of voluntary compliance shall not be considered an admission of violation for any purpose.

2. Any person who violates the terms of an assurance of voluntary compliance entered into under subsection 1 of this section shall forfeit and pay to the state a civil penalty of not more than two thousand dollars per violation. For the purposes of this subsection, the circuit court of a county approving an assurance of voluntary compliance shall retain jurisdiction, and the attorney general acting in the name of the state may petition for recovery of civil penalties under this subsection.

(L. 1967 p. 607 3, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.030 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Investigations by attorney general--investigative demand, contents of, how served.

407.040. 1. When it appears to the attorney general that a person has engaged in or is engaging in any method, act, use, practice or solicitation declared to be unlawful by this chapter or when he believes it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in or is engaging in any such method, act, use, practice or solicitation, he may execute in writing and cause to be served upon any person who is believed to have information, documentary material, or physical evidence relevant to the alleged or suspected violation, a civil investigative demand requiring such person to appear and testify, or to produce relevant documentary material or physical evidence or examination, at such reasonable time and place as may be stated in the civil investigative demand, concerning the advertisement, sale or offering for sale of any goods or services or the conduct of any trade or commerce or the conduct of any solicitation that is the subject matter of the investigation. Service of any civil investigative demand, notice, or subpoena may be made by any person authorized by law to serve process or by any duly authorized employee of the attorney general.

2. Each civil investigative demand shall:

(1) State the statute and section thereof, the alleged violation of which is under investigation, and the general subject matter of the investigation;

(2) Describe the class or classes of information, documentary material, or physical evidence to be produced thereunder with reasonable specificity so as fairly to indicate the material demanded;

(3) Prescribe a return date by which the information, documentary material, or physical evidence is to be produced; and

(4) Identify the members of the attorney general's staff to whom the information, documentary material, or physical evidence requested is to be made available.

3. No civil investigative demand shall:

(1) Contain any requirement which would be unreasonable or improper if contained in a subpoena duces tecum issued by a court of this state; or

(2) Require the disclosure of any documentary material which would be privileged or which, for any other reason, could not be required by a subpoena duces tecum issued by a court of this state.

4. Service of any civil investigative demand, notice, or subpoena may be made by:

(1) Delivering a duly executed copy thereof to the person to be served, or to a partner or any officer or agent authorized by appointment or by law to receive service of process on behalf of such person;

(2) Delivering a duly executed copy thereof to the principal place of business or the residence in this state of the person to be served;

(3) Mailing by registered or certified mail a duly executed copy thereof, addressed to the person to be served, at the principal place of business or the residence in this state or, if such person has no place of business or residence in this state, to his principal office or place of business or his residence; or

(4) The mailing thereof by registered or certified mail, requesting a return receipt signed by the addressee only, to the last known place of business, residence or abode within or without this state of such person for whom the same is intended.

(L. 1967 p. 607 4, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.040 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.

(2001) Sale of motor fuel below cost in violation of the Motor Fuel Marketing Act is not an unfair practice within meaning of Merchandising Practices Act, and thus the Attorney General lacks authority to invoke civil investigative demand power. Ports Petroleum Company, Inc. of Ohio v. Nixon, 37 S.W.3d 237 (Mo.banc).



Self-incrimination--person claiming right not subject to criminal prosecution or penalty--procedure.

407.045. In any civil investigative demand served under section 407.040, no individual shall be permitted to refuse to answer any question material to the matter in controversy or to refuse to produce documentary material or testify on the ground that the testimony or documentary material required of him may tend to incriminate him or subject him to any penalty; but, if such individual asserts his rights against self-incrimination, he shall not be subject to criminal prosecution or to any action for a criminal penalty or forfeiture on account of any transaction, matter or thing concerning which he may testify or produce documentary material. To avail himself of this section, such individual need only make his assertion of his right against self-incrimination on the record or known to the attorney general.

(L. 1985 H.B. 96, et al.)

Effective 5-31-85



Evidence, when and where produced.

407.050. Documentary material, information, or physical evidence demanded pursuant to the provisions of sections 407.010 to 407.130 shall be produced during normal business hours at the principal office or place of business of the person served, or at such other times and places as may be agreed upon by the person served and the attorney general.

(L. 1967 p. 607 5, A.L. 1973 H.B. 55)

*No continuity with 407.050 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Disclosure of information, material or evidence, limitation on--trade secrets require court order, when.

407.060. 1. No information, documentary material, or physical evidence requested pursuant to a civil investigative demand issued under section 407.040 shall, unless otherwise ordered by a court for good cause shown, be produced for or the contents thereof be disclosed to, any person other than the authorized employee of the attorney general without the consent of the person who produced such information, documentary material or physical evidence; provided, that under such reasonable terms and conditions as the attorney general shall prescribe, such information, documentary material or physical evidence shall be made available for inspection and copying by the person who produced such information, documentary material or physical evidence, or any duly authorized representative of such person. The attorney general, or any attorney designated by him, may use the information, documentary material, or physical evidence in the enforcement of this chapter, by presentation before any court or by disclosure to law enforcement agencies of this state, another state or the United States for enforcement of the laws of such other state or the United States concerning methods, acts, uses, practices and solicitations similar to those prohibited by this chapter.

2. Any material which contains trade secrets shall not be presented before any court except with the approval of the court in which the action is pending after adequate notice to the person furnishing such material or, in the case of disclosure to agencies of other states, the approval of the circuit court having jurisdiction under section 407.070.

(L. 1967 p. 607 6, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.060 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Petition to extend return date, when and where filed.

407.070. At any time before the return date specified in a civil investigative demand issued under section 407.040, or within twenty days after the civil investigative demand has been served, whichever period is shorter, a petition to extend the return date for, or to modify or set aside the civil investigative demand, stating good cause, may be filed in the circuit court of the county where the parties reside or in the circuit court of Cole County.

(L. 1967 p. 607 7, A.L. 1973 H.B. 55, A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.070 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Interference with or avoidance of a civil investigative demand prohibited, penalty--attorney general to enforce.

407.080. A person upon whom a civil investigative demand is served pursuant to the provisions of section 407.040 shall comply with the terms thereof unless otherwise provided by an order of a court. Any person who, with intent to avoid, evade, or prevent compliance, in whole or in part, with any civil investigative demand issued under section 407.040, removes from any place, conceals, withholds, or destroys, mutilates, alters, or by any other means falsifies any information, documentary material, or physical evidence in the possession, custody or control of any person, which is the subject of any such civil investigative demand shall be guilty of a class A misdemeanor. The attorney general shall have original jurisdiction to enforce the provisions of this section.

(L. 1967 p. 607 8, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.080 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Attorney general may request court order to produce evidentiary material--request filed where.

407.090. Whenever any person fails to comply with any civil investigative demand duly served upon him under section 407.040 or whenever satisfactory copying or reproduction of any such material cannot be done and such person refuses to surrender such material, the attorney general, through such officers or attorneys as he may designate, may file, in the trial court of general jurisdiction of a county or judicial district in which such person resides, is found, or transacts business, and serve upon such person a petition for an order of such court for the enforcement of such civil investigative demand; except that, if such person transacts business in more than one county or judicial district such petition shall be filed in the county or judicial district in which such person maintains his principal place of business, or in such other county or judicial district as may be agreed upon by the parties to such petition. Whenever any petition is filed in the trial court of general jurisdiction of a county or judicial district under this section, such court shall have jurisdiction to hear and determine the matter so presented, and to enter such order or orders as may be required to carry into effect the provisions of section 407.040. Any final order so entered shall be subject to appeal to the state supreme court. Any disobedience of any final order entered under this section by any court shall be punished as a contempt thereof.

(L. 1967 p. 607 9, A.L. 1985 H.B. 96, et al.)

Effective 5-31-85

*No continuity with 407.090 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Order by attorney general prohibiting unlawful acts--procedure--expiration of order--penalty for violation.

407.095. 1. Whenever it appears to the attorney general that a person has engaged in, is engaging in or is about to engage in any method, act, use, practice or solicitation declared to be unlawful by any provision of this chapter, he may issue and cause to be served upon such person, and any other person or persons concerned with or who, in any way, have participated, are participating or are about to participate in such unlawful method, act, use, practice or solicitation, an order prohibiting such person or persons from engaging or continuing to engage in such unlawful method, act, use, practice or solicitation. Such order shall not be issued until the attorney general has notified each person who will be subject to such order of the statutory section which such person is alleged to have violated, be violating or be about to violate, and the nature of the method, act, use, practice or solicitation which is the basis of such alleged violation. The person to whom such notice is given shall have two business days from the receipt of such notice to file an answer to such notice with the attorney general before the order authorized by this subsection may be issued.

2. All orders issued by the attorney general under subsection 1 of this section shall be signed by the attorney general or, in the event of his absence, his duly authorized representative, and shall be served in the manner provided in section 407.040, for the service of civil investigative demands and shall expire of their own force ten days after being served.

3. Any person who has been duly served with an order issued under subsection 1 of this section and who willfully and knowingly violates any provision of such order while such order remains in effect, either as originally issued or as modified, is guilty of a class D felony. The attorney general shall have original jurisdiction to commence all criminal actions necessary to enforce this section.

(L. 1986 S.B. 685)

Effective 5-1-86



Injunction--temporary restraining orders--receivers--restitution, when--civil penalty--venue--restitution funds payable to injured parties but interest payable to general revenue.

407.100. 1. Whenever it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in any method, act, use, practice or solicitation, or any combination thereof, declared to be unlawful by this chapter, the attorney general may seek and obtain, in an action in a circuit court, an injunction prohibiting such person from continuing such methods, acts, uses, practices, or solicitations, or any combination thereof, or engaging therein, or doing anything in furtherance thereof.

2. In any action under subsection 1 of this section, and pursuant to the provisions of the Missouri Rules of Civil Procedure, the attorney general may seek and obtain temporary restraining orders, preliminary injunctions, temporary receivers, and the sequestering of any funds or accounts if the court finds that funds or property may be hidden or removed from the state or that such orders or injunctions are otherwise necessary.

3. If the court finds that the person has engaged in, is engaging in, or is about to engage in any method, act, use, practice or solicitation, or any combination thereof, declared to be unlawful by this chapter, it may make such orders or judgments as may be necessary to prevent such person from employing or continuing to employ, or to prevent the recurrence of, any prohibited methods, acts, uses, practices or solicitations, or any combination thereof, declared to be unlawful by this chapter.

4. The court, in its discretion, may enter an order of restitution, payable to the state, as may be necessary to restore to any person who has suffered any ascertainable loss, including, but not limited to, any moneys or property, real or personal, which may have been acquired by means of any method, act, use, practice or solicitation, or any combination thereof, declared to be unlawful by this chapter. It shall be the duty of the attorney general to distribute such funds to those persons injured. Such funds may or may not be interest-bearing accounts, but any interest which accrues to any such account shall be sent at least annually by the attorney general to the director of revenue to be deposited in the state treasury to the credit of the state general revenue fund.

5. The court, in its discretion, may appoint a receiver to ensure the conformance to any orders issued under subsection 3 of this section or to ensure the payment of any damages ordered under subsection 4 of this section.

6. The court may award to the state a civil penalty of not more than one thousand dollars per violation; except that, if the person who would be liable for such penalty shows, by a preponderance of the evidence, that a violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error, no civil penalties shall be imposed.

7. Any action under this section may be brought in the county in which the defendant resides, in which the violation alleged to have been committed occurred, or in which the defendant has his principal place of business.

8. The attorney general is authorized to enter into consent judgments or consent injunctions with or without admissions of violations of this chapter. Violation of any such consent judgment or consent injunction shall be treated as a violation under section 407.110.

(L. 1967 p. 607 10, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685, A.L. 1994 H.B. 1461)

*No continuity with 407.100 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Receiver, powers and duties of.

407.105. When a receiver is appointed by the court pursuant to section 407.100, he may sue for, collect, receive and take into his possession all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes and property of every description, derived by means of any method, act, use, practice or solicitation, or any combination thereof, declared to be unlawful or prohibited by this chapter, including property with which such property has been mingled if it cannot be identified in kind because of such commingling, and to sell, convey, and assign the same and hold and dispose of the proceeds thereof under the direction of the court. Any person who has suffered damages as a result of the use or employment of any unlawful methods, acts, uses, practices or solicitations, or any combination thereof, and submits proof to the satisfaction of the court that he has in fact been damaged, may participate with general creditors in the distribution of the assets to the extent he has sustained out-of-pocket losses. In the case of a partnership or business entity, the receiver shall settle the estate and distribute the assets under the direction of the court. The court shall have jurisdiction of all questions arising in such proceedings and may make such orders and judgments therein as may be required.

(L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685)

Effective 5-1-86



Violation of injunction or restitution order, civil penalty.

407.110. Any person who violates the terms of an injunction, an order to make restitution, or any other judgment or order issued under section 407.100 shall forfeit and pay to the state a civil penalty of not more than five thousand dollars per violation. For the purposes of this section, the circuit court of a county issuing an injunction or restitutionary order shall retain jurisdiction, and the cause shall be continued, and in such cases the attorney general acting in the name of the state may petition for recovery of civil penalties.

(L. 1967 p. 607 11, A.L. 1973 H.B. 55, A.L. 1985 H.B. 96, et al.)

Effective 5-31-85

*No continuity with 407.110 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Provisions of this chapter no bar to other civil actions.

407.120. The provisions of sections 407.010 to 407.130 shall not bar any civil claim against any person who has acquired any moneys or property, real or personal, by means of any practice declared to be unlawful by this chapter.

(L. 1967 p. 607 12, A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.120 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Chapter not limitation for commissioner of securities.

407.125. The provisions of this chapter shall not bar the commissioner of securities from administering the provisions of chapter 409.

(L. 2000 S.B. 896)



Assessment of court costs.

407.130. In any action brought under the provisions of section 407.100, the attorney general is entitled to recover as costs, in addition to normal court costs, the cost of the investigation and prosecution of any action to enforce the provisions of this chapter.

(L. 1967 p. 607 13, A.L. 1985 H.B. 96, et al.)

Effective 5-31-85

*No continuity with 407.130 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Merchandising practices revolving fund established--funding--administration purposes.

407.140. 1. There is created in the state treasury a special trust fund for the office of the attorney general, to be known as the "Merchandising Practices Revolving Fund", which shall consist of money transferred by the general assembly of the state of Missouri from the general revenue fund of this state, and any money paid into the state treasury and required by law to be credited to the merchandising practices revolving fund. The moneys in the merchandising practices revolving fund shall be kept separate and apart from all other moneys in the state treasury and shall be paid out by the state treasurer upon warrants issued by the state auditor as certified by the commissioner of administration upon verified vouchers of the attorney general.

2. Money in the merchandising practices revolving fund shall be available for the payment of all costs and expenses incurred by the attorney general in the investigation, prosecution, and enforcement of the provisions of this chapter, and to provide funds for consumer education and advocacy programs.

3. In any case in which the court awards damages as provided in section 407.100, there shall be added, in addition to restitution and costs, an amount equal to ten percent of the total restitution awarded, or such other amount as may be agreed upon by the parties or awarded by the court, which amount shall be paid into the state treasury to the credit of the merchandising practices revolving fund.

4. All moneys recovered as court costs or as costs provided by section 407.130 pursuant to litigation brought under the authority of this chapter shall be paid into the state treasury to the credit of the merchandising practices revolving fund.

5. Any restitution awarded under section 407.100 which is not claimed or for which the injured person entitled thereto cannot be found, or which is otherwise remaining after distribution by the attorney general, shall be paid into the state treasury to the credit of the merchandising practices revolving fund.

6. The provisions of section 33.080 requiring the transfer of all unexpended funds to the credit of the ordinary revenue fund of the state shall not apply to funds in the merchandising practices revolving fund.

(L. 1985 H.B. 96, et al., A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.140 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Rulemaking, authority, limitation.

407.145. The attorney general shall have the authority to promulgate, in accordance with the provisions of chapter 536, all rules necessary to the administration and enforcement of the provisions of this chapter. Such rules may include, but need not be limited to, provisions designating the size and style of type which shall be used in written disclosures required by any provision of this chapter for which the size and style of type have not been otherwise designated.

(L. 1986 S.B. 685, A.L. 1993 S.B. 52)



Unsolicited merchandise, how disposed of.

407.200. Where unsolicited merchandise is delivered to a person for whom it is intended, such person has a right to refuse to accept delivery of this merchandise or he may deem it to be a gift and use it or dispose of it in any manner without any obligation to the sender.

(L. 1969 S.B. 20 1)

*No continuity with 407.200 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Precious metals, sale of--definitions--record of transactions, requirements--purchase from minor, requirements--weighing device, use of--applicability to pawnbrokers.

407.292. 1. As used in this section, the following words and terms have the following meanings, unless the context clearly indicates otherwise:

(1) "Business combination", the same meaning as such term is defined in section 351.459;

(2) "Buyer of gold, silver, or platinum" or "buyer", an individual, partnership, association, corporation, or business entity, who or which purchases gold, silver, or platinum from the general public for resale or refining, or an individual who acts as agent for the individual, partnership, association, corporation, or business entity for the purchases. The term does not include financial institutions licensed under federal or state banking laws, the purchaser of gold, silver, or platinum who purchases from a seller seeking a trade-in or allowance, and the purchaser of gold, silver, or platinum for his or her own use or ownership and not for resale or refining;

(3) "Gold", items containing or being of gold including, but not limited to, jewelry. The term does not include coins, ingots, or bullion or articles containing less than five percent gold by weight;

(4) "Platinum", items containing or being of platinum, but shall only include jewelry. The term does not include coins, ingots, bullion, or catalytic converters or articles containing less than five percent platinum by weight;

(5) "Silver", items containing or being of silver including, but not limited to, jewelry. The term does not include coins, ingots, bullion, or photographic film or articles containing less than five percent silver by weight;

(6) "Weighing device", shall only include a device that is inspected and approved by the weight and measures program within the department of agriculture.

2. The buyer shall completely, accurately, and legibly record and photograph every transaction on a form provided by and prepared by the buyer. The record of every transaction shall include the following:

(1) A copy of the driver's license or photo identification issued by the state or by the United States government or agency thereof to the person from whom the material is obtained;

(2) The name, current address, birth date, sex, and a photograph of the person from whom the material is obtained, if not included or are different from the identification required in subdivision (1) of this subsection;

(3) The seller shall be required to sign the form on which is recorded the information required by this section;

(4) An accurate description of the property purchased;

(5) The time and date of the transaction shall be recorded at the time of the transaction.

Records of transactions shall be maintained by the buyer in gold, silver, or platinum for a period of one year and shall be available for inspection by any law enforcement official of the federal government, state, municipality, or county. No buyer shall accept any premelted gold, silver, or platinum, unless it is part of the design of an item of jewelry. Each item of gold, silver, or platinum purchased by a buyer in gold, silver, or platinum shall be retained in an unaltered condition for five full working days. It shall be the buyer's duty to inform law enforcement if the buyer has any reason to believe an item purchased may have been obtained illegally by a seller.

3. Records of buyer transactions may be made available, upon request, to law enforcement officials, governmental entities, and any other concerned entities or persons.

4. When a purchase is made from a minor, the written authority of the parent, guardian, or person in loco parentis authorizing the sale shall be attached and maintained with the record of transaction described in subsection 2 of this section.

5. (1) When a weighing device is used to purchase gold, silver, or platinum, there shall be posted, on a conspicuous sign located close to the weighing device, a statement of prices for the gold, silver, or platinum being purchased as a result of the weight determination.

(2) The statement of prices shall include, but not be limited to, the following in terms of the price per troy ounce:

(a) The price for twenty-four karat, eighteen karat, fourteen karat, and ten karat gold;

(b) The price for pure silver and sterling silver;

(c) The price for platinum.

(3) When the weight determination is expressed in metric units, a conversion chart to troy ounces shall be prominently displayed so as to facilitate price comparison. The metric equivalent of a troy ounce is 31.10348 grams.

6. A weighing device used in the purchase of gold, silver, or platinum shall be positioned in such a manner that its indications may be accurately read and the weighing operation observed from a position which may be reasonably assumed by the buyer and the seller. A verbal statement of the result of the weighing shall be made by the person operating the device and recorded on the buyer's record of transaction.

7. The purchase of an item of gold, silver, or platinum by a buyer in gold, silver, or platinum not in accordance with this section shall constitute a violation of this section and the buyer may be subject to a fine not to exceed one thousand dollars.

8. This section shall not apply to a pawnbroker, as defined in section 367.011, or a scrap metal dealer, as provided in sections 407.300 to 407.305.

(L. 2013 S.B. 157 and S.B. 102)



Motor vehicle repairs, aftermarket crash part, defined--requirements--disclosure to owner--penalties.

407.295. 1. As used in this section, the following terms mean:

(1) "Aftermarket crash part", a replacement for any of the nonmechanical sheet metal or plastic parts which generally constitute the exterior of a motor vehicle, including inner and outer panels;

(2) "Insurer", an insurance company and any person authorized to represent the insurer with respect to a claim;

(3) "Nonoriginal equipment manufacturer (Non-OEM) aftermarket crash part", aftermarket crash parts not made for or by the manufacturer of the motor vehicle.

2. Any aftermarket crash part supplied by a nonoriginal equipment manufacturer for use in this state after January 1, 1990, shall have affixed thereto or inscribed thereon the logo or name of its manufacturer. Such manufacturer's logo or name shall be visible after installation whenever practicable.

3. No insurer shall specify directly or indirectly the use of non-OEM aftermarket crash parts in the repair of an insured's motor vehicle without disclosing the intended use of such parts. In all instances where non-OEM aftermarket crash parts are intended for use by an insurer:

(1) The written estimate shall clearly identify each such part; and

(2) A disclosure document containing the following information in ten-point or larger type shall appear on or be attached to the insured's copy of the estimate: "This estimate has been prepared based on the use of one or more crash parts supplied by a source other than the manufacturer of your motor vehicle. Warranties applicable to these replacement parts are provided by the parts manufacturer or distributor rather than by the manufacturer of your vehicle."

4. Any violation of this section shall be deemed an unlawful practice as the term is used in sections 407.010 to 407.130, and shall be subject to the enforcement provisions of sections 407.010 to 407.130.

5. This section shall become effective January 1, 1990.

(L. 1989 H.B. 726 1)

Effective 1-1-90



Copper wire or cable, catalytic converters, collectors and dealers to keep register, information required--penalty--exempt transactions.

407.300. 1. Every purchaser or collector of, or dealer in, junk, scrap metal, or any secondhand property shall keep a register containing a written or electronic record for each purchase or trade in which each type of metal subject to the provisions of this section is obtained for value. There shall be a separate record for each transaction involving any:

(1) Copper, brass, or bronze;

(2) Aluminum wire, cable, pipe, tubing, bar, ingot, rod, fitting, or fastener;

(3) Material containing copper or aluminum that is knowingly used for farming purposes as farming is defined in section 350.010; or

(4) Catalytic converter;

whatever may be the condition or length of such metal. The record shall contain the following data: a copy of the driver's license or photo identification issued by the state or by the United States government or agency thereof to the person from whom the material is obtained, which shall contain a current address of the person from whom the material is obtained, and the date, time, and place of and a full description of each such purchase or trade including the quantity by weight thereof.

2. The records required under this section shall be maintained for a minimum of twenty-four months from when such material is obtained and shall be available for inspection by any law enforcement officer.

3. Anyone convicted of violating this section shall be guilty of a class A misdemeanor.

4. This section shall not apply to any of the following transactions:

(1) Any transaction for which the total amount paid for all regulated scrap metal purchased or sold does not exceed fifty dollars, unless the scrap metal is a catalytic converter;

(2) Any transaction for which the seller, including a farm or farmer, has an existing business relationship with the scrap metal dealer and is known to the scrap metal dealer making the purchase to be an established business or political subdivision that operates a business with a fixed location that can be reasonably expected to generate regulated scrap metal and can be reasonably identified as such a business; or

(3) Any transaction for which the type of metal subject to subsection 1 of this section is a minor part of a larger item, except for equipment used in the generation and transmission of electrical power or telecommunications.

(L. 1971 H.B. 124 1, A.L. 2008 S.B. 1034 & 802, A.L. 2013 H.B. 103)

*This section was amended by both H.B. 103 and S.B. 157 and S.B. 102, 2013. Due to possible conflict, both versions of this section are printed here.



Copper wire or cable, catalytic converters, collectors and dealers to keep register, information required--penalty--exempt transactions.

407.300. 1. Every purchaser or collector of, or dealer in, junk, scrap metal, or any secondhand property shall keep a register containing a written or electronic record for each purchase or trade in which each type of metal subject to the provisions of this section is obtained for value. There shall be a separate record for each transaction involving any:

(1) Copper, brass, or bronze;

(2) Aluminum wire, cable, pipe, tubing, bar, ingot, rod, fitting, or fastener;

(3) Material containing copper or aluminum that is knowingly used for farming purposes as farming is defined in section 350.010; whatever may be the condition or length of such metal; or

(4) Catalytic converter.

2. The record required by this section shall contain the following data:

(1) A copy of the driver's license or photo identification issued by the state or by the United States government or agency thereof to the person from whom the material is obtained;

(2) The current address, gender, birth date, and a photograph of the person from whom the material is obtained if not included or are different from the identification required in subdivision (1) of this subsection;

(3) The date, time, and place of the transaction;

(4) The license plate number of the vehicle used by the seller during the transaction;

(5) A full description of the metal, including the weight and purchase price.

3. The records required under this section shall be maintained for a minimum of twenty-four months from when such material is obtained and shall be available for inspection by any law enforcement officer.

4. Anyone convicted of violating this section shall be guilty of a class B misdemeanor.

5. This section shall not apply to any of the following transactions:

(1) Any transaction for which the total amount paid for all regulated scrap metal purchased or sold does not exceed fifty dollars, unless the scrap metal is a catalytic converter;

(2) Any transaction for which the seller, including a farm or farmer, has an existing business relationship with the scrap metal dealer and is known to the scrap metal dealer making the purchase to be an established business or political subdivision that operates a business with a fixed location that can be reasonably expected to generate regulated scrap metal and can be reasonably identified as such a business; or

(3) Any transaction for which the type of metal subject to subsection 1 of this section is a minor part of a larger item, except for equipment used in the generation and transmission of electrical power or telecommunications.

(L. 1971 H.B. 124 1, A.L. 2008 S.B. 1034 & 802, A.L. 2013 S.B. 157 and S.B. 102)

*This section was amended by both H.B. 103 and S.B. 157 and S.B. 102, 2013. Due to possible conflict, both versions of this section are printed here.



Metal beer keg, prohibition on purchase or possession by scrap metal dealer--violation, penalty.

407.301. 1. No scrap metal dealer shall knowingly purchase or possess a metal beer keg, whether damaged or undamaged, or any reasonably recognizable part thereof, on any premises that the dealer uses to buy, sell, store, shred, melt, cut, or otherwise alter scrap metal except when the purchase is from the brewer or its authorized representative. For purposes of this section, keg shall have the same meaning as in section 311.082.

2. Anyone who is found guilty of, or pleads guilty to, violating this section shall be guilty of a class A misdemeanor punishable only by fine. Nothing in this section shall be construed to preclude a person violating this section from also being prosecuted for any applicable criminal offense.

(L. 2008 S.B. 1034 & 802)



Metal belonging to various entities--scrap yard not to purchase--violation, penalty.

407.302. 1. No scrap yard shall purchase any metal that can be identified as belonging to a public or private cemetery, political subdivision, telecommunications provider, cable provider, wireless service or other communications-related provider, electrical cooperative, water utility, municipal utility, or utility regulated under chapter 386 or 393, including bleachers, guardrails, signs, street and traffic lights or signals, and manhole cover or covers, whether broken or unbroken, from anyone other than the cemetery or monument owner, political subdivision, telecommunications provider, cable provider, wireless service or other communications-related provider, electrical cooperative, water utility, municipal utility, utility regulated under chapter 386 or 393, or manufacturer of the metal or item described in this section unless such person is authorized in writing by the cemetery or monument owner, political subdivision, telecommunications provider, cable provider, wireless service or other communications-related provider, electrical cooperative, water utility, municipal utility, utility regulated under chapter 386 or 393, or manufacturer to sell the metal.

2. Anyone convicted of violating this section shall be guilty of a class B misdemeanor.

(L. 2008 S.B. 1034 & 802, A.L. 2013 S.B. 157 and S.B. 102)



Scrap metal dealers--payments in excess of $500 to be made by check--exceptions--violations, penalty.

407.303. 1. Any scrap metal dealer paying out an amount that is five hundred dollars or more shall make such payment by issuing a prenumbered check drawn on a regular bank account in the name of the licensed scrap metal dealer and with such check made payable to the person documented as the seller in accordance with this section, or by using a system for automated cash or electronic payment distribution which photographs or videotapes the payment recipient and identifies the payment with a distinct transaction in the register maintained in accordance with this chapter.

2. Any scrap metal dealer that purchases scrap metal from a seller and pays in the form of cash is required to obtain a copy of the seller's driver's license or nondriver's license if the metal is copper or a catalytic converter. This section shall not apply to any transaction for which the seller has an existing business relationship with the scrap metal dealer and is known to the scrap metal dealer making the purchase to be an established business or political subdivision that operates a business with a fixed location that can be reasonably expected to generate regulated scrap metal and can be reasonably identified as such a business.

3. Any person who knowingly and willfully violates the provisions of sections 407.300 to 407.303 shall be guilty of a class B misdemeanor and a fine of up to five hundred dollars for the first offense, a class A misdemeanor and a fine of up to one thousand dollars for the second offense, and the revocation of any and all business licenses that are held with the state for the third offense.

4. Any person in violation of sections 407.300 to 407.303 by selling stolen scrap metal shall be responsible for consequential damages related to obtaining the scrap metal.

(L. 2008 S.B. 1034 & 802, A.L. 2013 S.B. 157 and S.B. 102)



Bronze statuary, receptacles or memorials, record of purchase required of collectors and dealers--penalty.

407.305. 1. Whenever any collector of or dealer in junk or any secondhand property purchases any bronze cemetery vase or receptacle, any bronze cemetery memorial or any bronze statuary, whatever may be the condition of the vase or receptacle, cemetery memorial or bronze statuary, he* shall enter in a register kept for that purpose the name, address, and place of business of the person from whom the vase or receptacle was purchased, the driver's license number of the person, and a full description of each purchase including quantity by weight thereof.

2. Any peace officer of this state may inspect the register at any reasonable time.

3. Any person violating any of the provisions of this section is guilty of a misdemeanor and, upon conviction, shall be punished as provided by law.

(L. 1973 H.B. 29 1)

*Word "they" appears in original rolls.



Dealerships for farm implements, industrial maintenance, construction power equipment and outdoor power equipment--changes in ownership, rights of the dealer.

407.307. 1. The provisions of this section shall apply to:

(1) Farm implement dealerships, as provided in sections 407.838 to 407.880;

(2) Industrial maintenance and construction power equipment dealerships, as provided in sections 407.750 to 407.756; and

(3) Outdoor power equipment dealerships, as provided in sections 407.890 to 407.898.

2. A manufacturer, wholesaler or distributor shall have ninety days in which to consider and make a determination on a request by a dealer/retailer to sell or transfer any portion of his or her business ownership to another party or to enter into an agreement to operate the dealership with another party. The dealer/retailer's request shall include the reasonable financial information, personal background, character references and work histories as required by the manufacturer to render such a determination. In the event the manufacturer or distributor determines that the request is not acceptable, the manufacturer or distributor shall provide the dealer/retailer with a written notice of its determination with the stated reasons for nonacceptance.

(L. 1998 S.B. 626)



Advertising restrictions--definitions--attorney general to enforce, when--civil penalty authorized.

407.309. 1. As used in this section, the following terms mean:

(1) "Performing group", a vocal or instrumental group seeking to use the name of another group that has previously released a commercial sound recording under that name;

(2) "Recording group", a vocal or instrumental group at least one of whose members has previously released a commercial sound recording under that group's name and in which the member or members have a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation with the group;

(3) "Sound recording", a work that results from the fixation on a material object of a series of musical, spoken, or other sounds regardless of the nature of the material object, such as a disk, tape, or other phono-record, in which the sounds are embodied.

2. It shall be unlawful for any person to advertise or conduct a live musical performance or production in this state through the use of a false, deceptive, or misleading affiliation, connection, or association between the performing group and the recording group. This section shall not apply if:

(1) The performing group is the authorized registrant and owner of a federal service mark for that group registered in the United States Patent and Trademark Office;

(2) At least one member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation with the group;

(3) The live musical performance or production is identified in all advertising and promotion as a salute or tribute;

(4) The advertising does not relate to a live musical performance or production taking place in this state; or

(5) The performance or production is expressly authorized by the recording group.

3. Whenever the attorney general has reason to believe that any person is advertising or conducting or is about to advertise or conduct a live musical performance or production in violation of this section and that proceedings would be in the public interest, the attorney general may bring an action against the person to restrain by temporary or permanent injunction that practice.

4. Whenever any court issues a permanent injunction to restrain and prevent violations of this section as authorized in subsection 3 of this section, the court may in its discretion direct that the defendant restore to any person in interest any moneys or property, real or personal, which may have been acquired by means of any violation of this section, under terms and conditions to be established by the court.

5. Notwithstanding the provisions of section 407.100 to the contrary, any person who violates this section shall be assessed a civil penalty of not less than five thousand dollars nor more than fifteen thousand dollars per violation, which civil penalty shall be in addition to any other relief which may be granted under subsection 4 of this section. Each performance or production declared unlawful by this section shall constitute a separate violation.

(L. 2007 H.B. 780)



Definitions.

407.325. As used in sections 407.325 to 407.340, the following terms shall mean:

(1) "Business day", any day except a Sunday or a legal holiday;

(2) "Buyer", a natural person who enters into a health spa contract;

(3) "Contract price", the sum of all monthly fees except interest required by the health spa contract and any nonrecurring fee charged at or near the beginning of a health spa membership;

(4) "Health spa", any person, firm, corporation, organization, club or association engaged in the sale of memberships in a program of physical exercise, which includes the use of one or more of a sauna, whirlpool, weight-lifting room, massage, steam room, or exercising machine or device, or engaged in the sale of the right or privilege to use exercise equipment or facilities, such as a sauna, whirlpool, weight-lifting room, massage, steam room or exercising machine or device. The term "health spa" shall not include the following:

(a) Bona fide nonprofit organizations, including, but not limited to, the Young Men's Christian Association, Young Women's Christian Association, or similar organizations whose functions as health spas are only incidental to their overall functions and purposes;

(b) Any private club owned and operated by its members;

(c) Any organization primarily operated for the purpose of teaching a particular form of self-defense such as judo or karate;

(d) Any facility owned or operated by the United States;

(e) Any facility owned or operated by the state of Missouri or any of its political subdivisions;

(f) Any nonprofit public or private school, college or university; and

(g) Any facility owned or operated by any person, firm, corporation, organization, club or association, engaged in the sale of the right or privilege to use such facility when the proceeds of the sale of such rights or privileges accounts for twenty percent or less of the gross annual receipts of the person, firm, corporation, organization, club or association;

(5) "Health spa contract", a written agreement whereby the buyer of health spa services purchases, or becomes obligated to purchase, health spa services to be rendered over a period longer than three months; and the seller of health spa services receives payment to cover a period more than three months;

(6) "Health spa services", services, privileges, or rights offered for sale or provided by a health spa;

(7) "Monthly fee", the total consideration, including but not limited to, equipment or locker rental, credit check, finance, medical and dietary evaluation, class and training fees, and all other similar fees or charges and interest, but excluding any nonrecurring fee charged at or near the beginning of a health spa membership, to be paid by a buyer, divided by the total number of months of health spa service use allowed by the buyer's contract, including months or time periods called "free" or "bonus" months or time periods and such months or time periods which are described in any other terms suggesting that they are provided free of charge, which months or time periods are given or contemplated when the contract is initially executed;

(8) "Prepayment", payment of any consideration for services or the use of facilities made prior to the day on which the services or facilities of the health spa are fully open and available for regular use by the members.

(L. 1988 S.B. 486 1)



Health spas, registration with attorney general, form, fee--fees deposited in health spa regulatory fund, created--attorney general, enforcement, no bar to civil claims.

407.327. 1. It shall be unlawful for any health spa to offer, advertise, or execute or cause to be executed by the buyer any health spa contract in this state unless the health spa at the time of the offer, advertisement, sale or execution of a health spa contract has been properly registered with the office of the attorney general. The registration shall:

(1) Disclose the address, ownership, date of first sales and date of first opening of the health spa;

(2) Be renewed annually; and

(3) Be accompanied by a fee of one hundred dollars per registration and each annual renewal thereof. Each separate location where health spa services are offered shall be considered a separate health spa and shall file a separate registration, even though the separate locations are owned or operated by the same owner.

2. All fees collected pursuant to this section shall be deposited in the state treasury to the credit of a special trust fund to be known as the "Health Spa Regulatory Fund". Moneys in the health spa regulatory fund shall be used solely for the administration of sections 407.325 to 407.340.

3. The attorney general shall have all powers, rights and duties as are provided in sections 407.010 to 407.145, to seek penalties, remedies, and procedures that are provided in such sections against any health spa that is engaged in practices that are unlawful according to the provisions of this chapter.

4. The provisions of this section* are not exclusive and do not relieve health spas or the contract subject thereto from compliance with all other applicable provisions of law nor shall such provisions bar any civil claim against any health spa which has acquired any moneys or property, real or personal, by means of any practice declared unlawful by this chapter.

(L. 1988 S.B. 486 2)

*Word "subsection" appears in original rolls but apparently refers to entire section.



Prepayment of contracts, treatment of funds, notice to attorney general, exceptions.

407.329. 1. Each health spa selling contracts or health spa services on a prepayment basis shall notify the office of the attorney general of the proposed location of the spa for which prepayments will be solicited and shall deposit all funds received from such prepayment contracts in an account established in a financial institution authorized to transact business in this state until the health spa has commenced operations. The account shall be established and maintained only in a financial institution which agrees in writing with the office of the attorney general to hold all funds deposited and not to release such funds until receipt of written authorization from the office of the attorney general. The prepayment funds deposited will be eligible for withdrawal by the health spa after the health spa has opened and is providing services pursuant to its health spa contracts and the office of the attorney general gives written authorization for withdrawal.

2. The provisions of this section shall not apply to any health spa duly registered pursuant to the provisions of section 407.327 which has posted a bond or letter of credit in the amount of twenty-five thousand dollars.

(L. 1988 S.B. 486 3)



Contracts, in writing, required provisions--buyer's right to cancel.

407.330. 1. Every health spa contract for the sale of future health spa services which are paid for in advance or which the buyer agrees to pay for in future installments shall be in writing and shall contain the following contractual provisions:

(1) A provision for the penalty-free cancellation of the contract within three business days of its making and refund upon such notice of all moneys paid under the contract;

(2) A provision requiring that to cancel a contract the buyer shall notify the health spa of cancellation in writing, by certified mail, return receipt requested, or personal delivery, to the address specified in the health spa contract; that all moneys to be refunded upon cancellation of the health spa contract shall be paid within thirty days of receipt of the notice of cancellation; and that if the customer has executed any credit or lien agreement with the health spa to pay for all or part of health spa services, any such negotiable instrument executed by the buyer shall also be returned within thirty days after such cancellation;

(3) A provision for the cancellation of the contract if the buyer dies or becomes permanently disabled and unable to use a substantial portion of the services for sixty or more consecutive days. Upon receipt of such notice, the health spa shall refund to the buyer funds paid or accepted in payment of the contract in an amount computed by dividing the contract price by the number of weeks in the contract term and multiplying the result by the number of weeks remaining in the contract term. In the case of disability, the health spa may require the buyer to submit to a physical examination by a doctor agreeable to the buyer and the health spa;

(4) A provision for extension of the term of the membership for time loss due to temporary disability. In the case of disability, the health spa may require the buyer to submit to a physical examination by a doctor agreeable to the buyer and the health spa.

2. The provisions required by subsection 1 of this section shall be set forth under a conspicuous caption:

"BUYER'S RIGHT TO CANCEL"; and read substantially as follows:

If you wish to cancel this contract, you may cancel by delivering written notice to this health spa by certified mail, return receipt requested. The notice must say that you do not wish to be bound by the contract and must be delivered or mailed before midnight of the third business day after you sign this contract. The notice must be delivered or mailed to: ................................................................. ..................................... (Health spa shall insert its name and mailing address.)

(L. 1988 S.B. 486 4)

*No continuity with 407.330 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Transfer or relocation of health spa, buyer's duties, rights, when--refund of moneys, amount, when--attorney general to represent buyers, when.

407.332. 1. The provisions of section 408.405 shall apply to any health spa contract with the following exceptions:

(1) It shall not be a defense relieving the buyer from amounts then owing on any contract between a buyer and a health spa for health services regardless of whether such contract has been assigned that the health spa has relocated provided that the health spa has relocated within ten miles of the location designated in the health spa contract;

(2) It shall not be a defense relieving the buyer from amounts then owing on any contract between a buyer and a health spa for health spa services regardless of whether such contract has been assigned that the health spa has been sold provided there has not been a lapse in services for more than thirty days. However, it shall be the legal obligation of every buyer of a health spa that has been providing health spa services pursuant to contracts to honor the terms of such contracts. The new owner of a health spa shall not consider the lapsed time period when determining how much time remains for service on any particular contract.

2. It shall be a defense relieving the buyer from amounts then owing on any contract between a buyer and a health spa for health spa services, regardless of whether such contract has been assigned, that the health spa has gone out of business without providing alternative health spa services at another location within ten miles of the location designated in the health spa contract.

3. Any health spa which relocates to a location that is ten miles from the location designated in a health spa contract or which goes out of business prior to the expiration of a buyer's contract without providing alternative health spa services at another location within ten miles of the location designated in the health spa contract shall be required to refund to the buyer funds paid or accepted in payment of the contract in an amount computed by dividing the contract price by the number of weeks in the contract term and multiplying the result by the number of weeks remaining in the contract term. This provision shall not apply to any health spa that has been sold provided there has not been a lapse in service for more than thirty days. However the new owner of a health spa shall honor the terms of all contracts entered into between buyers and the health spa while controlled by the prior owner. The new owner of the health spa shall not consider the lapsed period when determining how much time remains for service on any particular contract.

4. In order to ensure adequate enforcement of the provisions of this section the office of the attorney general is empowered to represent buyers who may be injured as a result of noncompliance with the provisions of this section. The attorney general is hereby given in addition to the powers granted to the attorney general to enforce the provisions of this chapter the additional power to seek and be granted receivership of all goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes, and property of every description of any person, firm, corporation, organization, club or association that has operated a health spa that is determined to have injured a buyer as a result of going out of business or being sold and failing to refund moneys due and owing buyers under the provisions of subsection 3 of this section, and to sell, convey, and assign the same and hold and dispose of the proceeds thereof under the direction of the court for the benefit of the injured buyers.

(L. 1988 S.B. 486 5)



Contracts, signed by buyer--duration limit--voidable, when--waiver void, when.

407.334. 1. Every health spa contract shall be signed by the buyer, shall designate the date on which the buyer actually signed the contract and a copy of the contract shall be delivered to the buyer at the time the contract is executed.

2. No health spa contract shall have a duration for a period longer than thirty-six months, but the contract may give the buyer a right of renewal.

3. Any health spa contract which does not comply with the applicable provisions of section 407.330 shall be voidable at the option of the buyer.

4. Any waiver by the buyer of any of the provisions of section 407.330 shall be deemed contrary to public policy and shall be void and unenforceable.

(L. 1988 S.B. 486 6)



Holder of contract or note subject to claims and defenses, notice.

407.335. All health spa contracts and any promissory note executed by the buyer in connection therewith shall contain the following provision on the face thereof in at least 10-point, boldface type: NOTICE

ANY HOLDER OF THIS CONTRACT OR NOTE IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

(L. 1988 S.B. 486 7)



Assignment of contract, buyer's rights.

407.337. Whether or not the health spa has complied with the notice requirements of section 407.335, any right of action or defense arising out of a health spa contract which the buyer has against the health spa, and which would be cut off by assignment, shall not be cut off by assignment of the contract to any third party holder, whether or not the holder acquires the contract in good faith and for value.

(L. 1988 S.B. 486 8)



Bond, filed with attorney general, amount, exceptions--separate locations, bond required for each--claims against, cancellation of, when.

407.339. 1. Before entering into any nonprepayment health spa contract, every health spa except any health spa which has been engaged in such business in any county of the first or second class or in any city not located within a county for at least three years prior to August 13, 1988, and except in any county of the third or fourth class for at least one year prior to August 13, 1988, shall file and maintain with the office of the attorney general, in form and substance satisfactory to him, a bond with corporate surety, from a company authorized to transact business in this state or a letter of credit from a bank insured by the Federal Deposit Insurance Corporation in the amounts indicated below:

Number of unexpired Amount of bond

contracts exceeding or letter of

three months credit

500 or less $10,000

501 to 1000 $20,000

more than 1000 $25,000

The number of unexpired contracts exceeding three months shall be separately calculated for each location where health spa services are offered. Any health spa subject to the requirements of this section shall be exempt from its provisions after such health spa has been engaged in business for three years.

2. Each separate location where health spas services are offered shall be considered a separate health spa and shall file a separate bond or letter of credit with respect thereto, even though the separate locations are owned or operated by the same owner; but, no owner shall be required to file with the office of the attorney general bonds or letters of credit in excess of seventy-five thousand dollars. If the seventy-five thousand dollar limit is applicable, then the bonds or letters of credit filed by such owner shall apply to all health spas owned or operated by the same owner.

3. A health spa which has not filed a bond or letter of credit may nevertheless sell health spa contracts of up to thirty-six months' duration so long as the amount of payment actually charged, due or received each month by the health spa or any holder of its health spa contracts does not exceed the monthly fee calculated pursuant to the definition thereof in section 407.325.

4. The bond required by subsection 1 of this section shall be renewed annually. No bond required of any health spa under the provisions of sections 407.325 to 407.340 shall be cancelled by either party without thirty days written notice prior to the intended cancellation date. All claims against the holder of the bond must be made within ninety days after the expiration or cancellation of the bond.

(L. 1988 S.B. 486 9)



Bond, issued in favor of state of Missouri, payable to whom--aggregate liability--no cancellation without attorney general's consent.

407.340. 1. The bond or letter of credit required by section 407.339 shall be in favor of the state of Missouri for the benefit of:

(1) Any buyer injured by having paid money for health spa services in a facility which fails to open within sixty days after the date upon which the buyer and the health spa entered into a contract or goes out of business prior to the expiration of the buyer's health spa contract; or

(2) Any buyer injured as a result of a violation of sections 407.325 to 407.340.

2. The aggregate liability of the bond or letter of credit to all persons for all breaches of the conditions of the bond or letter of credit shall in no event exceed the amount of the bond or letter of credit. The bond or letter of credit shall not be cancelled or terminated except with the consent of the office of the attorney general.

(L. 1988 S.B. 486 10)

*No continuity with 407.340 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Definitions.

407.350. As used in sections 407.350 to 407.357, unless the context clearly requires otherwise, the following terms mean:

(1) "Bid", a written or oral proposal by an exhibitor to a distributor, which proposal is in response to an invitation to bid or negotiate and states the terms under which the exhibitor will agree to exhibit a motion picture in this state;

(2) "Blind bidding", bidding, negotiating, offering terms, accepting a bid, or agreeing to terms for the purpose of entering into a license agreement prior to a trade screening of the motion picture that is the subject of the agreement;

(3) "Distributor", any person engaged in the business of renting, selling, or licensing motion pictures to exhibitors;

(4) "Exhibit" or "exhibition", showing a motion picture to the public for a charge;

(5) "Exhibitor", any person engaged in the business of operating a theater in this state;

(6) "Invitation to bid", a written or oral solicitation or invitation by a distributor to one or more exhibitors to bid or negotiate for the right to exhibit a motion picture in this state;

(7) "License agreement", any contract between a distributor and an exhibitor for the exhibition of a motion picture by the exhibitor in this state;

(8) "Run", the continuous exhibition of a motion picture in a defined geographic area for a specified period of time. A "first run" means the initial exhibition of a motion picture in a designated geographic area for a specified period of time, a "subsequent run" means any continuous exhibition of a motion picture in a designated geographic area for a specified period of time after the first run;

(9) "Theater", any establishment in which motion pictures are exhibited regularly to the public for a charge;

(10) "Trade screening", the showing of a motion picture by a distributor in the two largest metropolitan areas, which showing is open to any exhibitor interested in exhibiting the motion picture.

(L. 1982 S.B. 525 1)

*No continuity with 407.350 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Blind bidding of motion pictures prohibited, when--distributors required to give notice of trade screening.

407.353. 1. Blind bidding of more than two motion pictures in any twelve-month period in the state of Missouri by the aggregate of all distributors, or their subsidiary distributors or related companies, not previously exhibited within this state is hereby prohibited within this state. No bids shall be returnable, no negotiations for the exhibition or licensing of a motion picture shall take place, and no license agreement or any of its terms shall be agreed to for the exhibition of any motion picture within this state before the motion picture has been trade screened within this state.

2. Every distributor shall furnish to all exhibitors in this state reasonable and uniform notice of all trade screenings that are held within this state of motion pictures that he is distributing.

(L. 1982 S.B. 525 2)



General invitation to bid, contents--bidding procedure--exhibitor must have attended trade screening to bid.

407.355. 1. If bids are solicited from exhibitors for the purpose of entering into a license agreement, the invitation to bid shall specify:

(1) The number and length of runs to which the invitation to bid applies;

(2) Whether the invitation to bid applies to a first or subsequent run;

(3) The geographic area for each run;

(4) The names of all exhibitors who are being given an invitation to bid;

(5) The date, hour, and location at which the bid is required to be made;

(6) The name and address of the location where the bids will be opened, which location shall be within this state.

2. If the motion picture that is the subject of a bid has not already been trade screened within this state, the distributor soliciting the bid shall include in the invitation to bid the date, time, and location of the trade screening of the motion picture that is the subject of the invitation to bid. An exhibitor is prohibited from submitting a bid unless the exhibitor or his agent has attended a trade screening of the motion picture for which bids are being solicited.

3. If a distributor issues invitations to bid for a motion picture and he receives no bids for the motion picture, he may then negotiate for the picture with all exhibitors on the bid list. No further bidding is required. If a distributor receives bids which are not acceptable to the distributor the first time the motion picture is bid, he must rebid the motion picture a second time and if after bidding the motion picture a second time the bids are still unacceptable, he shall notify all exhibitors of such rejections and then may negotiate the motion picture. No further bidding is required and all exhibitors must be given an opportunity to negotiate.

(L. 1982 S.B. 525 3)



Blind bidding permitted, when--invitation to bid, contents--license agreement voidable, damages.

407.357. Notwithstanding any other provisions of sections 407.350 to 407.357, a distributor of motion pictures may blind bid motion pictures based upon a play or review which has been performed for a period of not less than six months for the public, or based upon published manuscripts which are in the top ten best sellers in sales or manuscripts having sold at least five hundred thousand copies to the general public from the time of copyright, or based upon television or radio scripts which have been previously televised or broadcast on a national network to the public. Provided, however, if a distributor solicits bids from exhibitors for the purposes of entering into a license agreement and engages in blind bidding for such solicitation, the invitation to bid shall be in writing and shall specify, in addition to any other information the distributor desires to convey to an exhibitor, the audience to which the motion picture is principally directed and the rating anticipated for the motion picture which shall be specified by using the rating system of the Classification and Rating Administration. Blind bidding as provided for in section 407.353 and this section may only take place during the one-hundred-eighty-day period immediately preceding the designated release date of the motion picture which is the subject of the license agreement and no exhibitor shall forward any money to a distributor earlier than fourteen days immediately preceding the designated release date of the motion picture which is the subject of the license agreement. A license agreement is voidable by the exhibitor if the released motion picture does not substantially conform to the information provided by the distributor about the motion picture in the invitation to bid, or if the rating given by the Classification and Rating Administration is more restrictive than the rating indicated by the distributor in the invitation to bid, and all money received by the distributor from the exhibitor before the release of the motion picture under the terms of the license agreement, shall be returned to the exhibitor within seven days. All license agreements entered into as a result of blind bidding shall contain a provision stating the amount of damages payable to the exhibitor by the distributor in the event the license agreement is voided under the terms of this section.

(L. 1982 S.B. 525 4)



Definitions.

407.400. As used in sections 407.400 to 407.420:

(1) "Franchise" means a written or oral arrangement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise, including but not limited to a commercial relationship of definite duration or continuing indefinite duration, between a "wholesaler", such wholesaler being a person as defined in this section, licensed pursuant to the provisions of chapter 311 to sell at wholesale, intoxicating liquor, as defined in section 311.020, to retailers, duly licensed in this state, and a "supplier", being a person engaged in the business as a manufacturer, distiller, rectifier or out-of-state solicitor whose brands of intoxicating liquor are distributed through duly licensed wholesalers in this state, and wherein a wholesaler is granted the right to offer, sell, and distribute within this state or any designated area thereof such of the supplier's brands of intoxicating liquor, or all of them, as may be specified; except that, the term "franchise" shall not apply to persons engaged in sales from warehouses or like places of storage, other than wholesalers as above described, leased departments of retail stores, places of original manufacture, nor shall the term "franchise" apply to a commercial relationship that does not contemplate the establishment or maintenance of a place of business within the state of Missouri. As used herein "place of business" means a fixed, geographical location at which goods, products or services are displayed or demonstrated for sale;

(2) The term "goods" includes any personal property, real property, or any combination thereof;

(3) The term "other property" includes a franchise, license distributorship, or other similar right, privilege, or interest;

(4) The term "person" includes an individual, corporation, trust, estate, partnership, unincorporated association, or any other legal or commercial entity;

(5) The term "pyramid sales scheme" includes any plan or operation for the sale or distribution of goods, services or other property wherein a person for a consideration acquires the opportunity to receive a pecuniary benefit, which is not primarily contingent on the volume or quantity of goods, services, or other property sold or distributed or to be sold or distributed to persons for purposes of resale to consumers, and is based upon the inducement of additional persons, by himself or herself or others, regardless of number, to participate in the same plan or operation; and

(6) The term "sale or distribution" includes the acts of leasing, renting or consigning.

(L. 1974 H.B. 1132 1, A.L. 1975 H.B. 810 1, A.L. 1998 H.B. 957 & 1063)

*No continuity with 407.400 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-99



Pyramid sales schemes prohibited--cancellation of franchise without notice prohibited, exceptions.

407.405. No person shall, directly or through the use of agents or intermediaries, in connection with the sale or distribution of goods, service, or other property, sell, offer or attempt to sell a participation or the right to participate in a pyramid sales scheme. No person who has granted a franchise to another person shall cancel or otherwise terminate any such franchise agreement without notifying such person of the cancellation, termination or failure to renew in writing at least ninety days in advance of the cancellation, termination or failure to renew, except that when criminal misconduct, fraud, abandonment, bankruptcy or insolvency of the franchisee, or the giving of a no account or insufficient funds check is the basis or grounds for cancellation or termination, the ninety days' notice shall not be required.

(L. 1974 H.B. 1132 2, A.L. 1975 H.B. 810 2)



Double damages, when--limitation on actions--cancellation of franchise without notice grounds for award of damages.

407.410. 1. Any contract made in violation of section 407.405 is void and any person who, directly or through the use of agents or intermediaries, induces or causes another person to participate in a pyramid sales scheme will be liable to that person in civil damages in an amount equal to the sum of twice the amount of consideration paid, and in the case of any successful action to enforce such liability, the costs of the action together with a reasonable attorney's fee, as determined by the court. An action under this section may be brought in the circuit court having venue within five years from the date on which the consideration was paid.

2. A franchisee suffering damage as a result of the failure to give notice as required of the cancellation or termination of a franchise, may institute legal proceedings under the provisions of sections 407.400 to 407.420 against the franchisor who cancelled or terminated his franchise in the circuit court for the circuit in which the franchisor or his agent resides or can be located. When the franchisee prevails in any such action in the circuit court, he may be awarded a recovery of damages sustained to include loss of goodwill, costs of the suit, and any equitable relief that the court deems proper.

(L. 1974 H.B. 1132 3, A.L. 1975 H.B. 810 3)

*No continuity with 407.410 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Wholesale liquor franchises, discrimination prohibited, when--supplier not to alter franchise without cause--good faith defined--damages to franchise holder, when--provisions applicable when--substantially amended defined.

407.413. 1. If more than one franchise for the same brand or brands of intoxicating liquor is granted to different wholesalers in this state, it is a violation of sections 407.400 to 407.420 for any supplier to discriminate between the wholesalers with respect to any of the terms, provisions, and conditions of these franchises.

2. Notwithstanding the terms, provisions and conditions of any franchise, no supplier shall unilaterally terminate or refuse to continue or change substantially the condition of any franchise with the wholesaler unless the supplier has first established good cause for such termination, noncontinuance or change.

3. Any wholesaler may bring an action in a court of competent jurisdiction against a supplier for violation of any of the provisions of this section and may recover damages sustained by such wholesaler together with the costs of the action and reasonable attorney's fees.

4. In any action brought by a wholesaler against a supplier for termination, noncontinuance or substantial change in violation of the provisions of this section, it is a complete defense for the supplier to prove that the termination, noncontinuance or change was done in good faith and for good cause.

5. As used in this section, "good faith" is the duty of each party to any franchise and all officers, employees or agents thereof to act in a fair and equitable manner towards each other, and "good cause" means the following:

(1) Failure by the wholesaler to comply substantially with the provisions of an agreement or understanding with the supplier, which provisions are both essential and reasonable;

(2) Use of bad faith or failure to observe reasonable commercial standards of fair dealing in the trade; or

(3) Revocation or suspension for more than thirty-one days of a beer wholesaler's federal basic permit or of any state or local license required of a beer wholesaler for the normal operation of its business.

6. As to brewers and beer wholesalers, the provisions of this section shall only apply to agreements entered into on or after August 28, 1998, and to agreements which are renewed or substantially amended on or after August 28, 1998. As used in the preceding sentence, "substantially amended" means a written amendment that materially alters the fundamental business relationship between brewer and wholesaler. "Substantially amended" does not include changes or amendments that are contemplated in writing by the parties to an agreement.

(L. 1975 H.B. 810 4, A.L. 1998 H.B. 957 & 1063)



Attorney general may obtain injunction, when--bond not required.

407.415. In addition to other penalties and remedies provided in sections 407.400 to 407.420, whenever it appears that any person is engaged or is about to engage in any act or practice which constitutes a pyramid sales scheme, the attorney general may bring an action in the circuit court having venue to enjoin such act or practice, and upon a proper showing, a temporary restraining order or a preliminary or permanent injunction shall be granted without bond.

(L. 1974 H.B. 1132 4, A.L. 1975 H.B. 810 5)



Penalty--duty to enforce--jurisdiction of attorney general.

407.420. Any person willfully violating any of the provisions of section 407.405 is guilty of a class D felony. It shall be the duty of each prosecuting attorney and circuit attorney in their respective jurisdictions to commence any criminal actions under this section, and the attorney general shall have concurrent original jurisdiction to commence such criminal actions throughout the state where such violations have occurred.

(L. 1974 H.B. 1132 5, A.L. 1975 H.B. 810 6, A.L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.420 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Citation of law.

407.430. Sections 407.430 to 407.436 shall be known and may be cited as the "Credit User Protection Law".

(L. 1991 S.B. 112)

*No continuity with 407.430 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Definitions.

407.432. As used in sections 407.430 to 407.436, the following terms shall mean:

(1) "Acquirer", a business organization, financial institution, or an agent of a business organization or financial institution that authorizes a merchant to accept payment by credit card for merchandise;

(2) "Cardholder", the person's name on the face of a credit card to whom or for whose benefit the credit card is issued by an issuer, or any agent authorized signatory or employee of such person;

(3) "Counterfeit credit card", any credit card which is fictitious, altered, or forged, any false representation, depiction, facsimile or component of a credit card, or any credit card which is stolen, obtained as part of a scheme to defraud, or otherwise unlawfully obtained, and which may or may not be embossed with account information or a company logo;

(4) "Credit card" or "debit card", any instrument or device, whether known as a credit card, credit plate, bank service card, banking card, check guarantee card, or debit card or by any other name, issued with or without fee by an issuer for the use of the cardholder in obtaining money or merchandise on credit, or for use in an automated banking device to obtain any of the services offered through the device. The presentation of a credit card account number is deemed to be the presentation of a credit card;

(5) "Expired credit card", a credit card for which the expiration date shown on it has passed;

(6) "Issuer", the business organization or financial institution or its duly authorized agent, which issues a credit card;

(7) "Merchandise", any objects, wares, goods, commodities, intangibles, real estate, services, or anything else of value;

(8) "Merchant", an owner or operator of any retail mercantile establishment, or any agent, employee, lessee, consignee, officer, director, franchisee, or independent contractor of such owner or operator. A merchant includes a person who receives from an authorized user of a payment card, or an individual the person believes to be an authorized user, a payment card or information from a payment card as the instrument for obtaining, purchasing, or receiving goods, services, money, or anything of value from the person;

(9) "Person", any natural person or his legal representative, partnership, firm, for-profit or not-for-profit corporation, whether domestic or foreign, company, foundation, trust, business entity or association, and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee or cestui que trust thereof;

(10) "Reencoder", an electronic device that places encoded information from the magnetic strip or stripe of a credit or debit card onto the magnetic strip or stripe of a different credit or debit card;

(11) "Revoked credit card", a credit card for which permission to use it has been suspended or terminated by the issuer;

(12) "Scanning device", a scanner, reader, or any other electronic device that is used to access, read, scan, obtain, memorize, or store, temporarily or permanently, information encoded on the magnetic strip or stripe of a credit or debit card.

(L. 1991 S.B. 112, A.L. 2002 S.B. 895)



Protection of credit card and debit card account numbers, prohibited actions, penalty, exceptions--effective date, applicability.

407.433. 1. No person, other than the cardholder, shall:

(1) Disclose more than the last five digits of a credit card or debit card account number on any sales receipt provided to the cardholder for merchandise sold in this state;

(2) Use a scanning device to access, read, obtain, memorize, or store, temporarily or permanently, information encoded on the magnetic strip or stripe of a credit or debit card without the permission of the cardholder and with the intent to defraud any person, the issuer, or a merchant; or

(3) Use a reencoder to place information encoded on the magnetic strip or stripe of a credit or debit card onto the magnetic strip or stripe of a different card without the permission of the cardholder from which the information is being reencoded and with the intent to defraud any person, the issuer, or a merchant.

2. Any person who knowingly violates this section is guilty of an infraction and any second or subsequent violation of this section is a class A misdemeanor.

3. It shall not be a violation of subdivision (1) of subsection 1 of this section if:

(1) The sole means of recording the credit card number or debit card number is by handwriting or, prior to January 1, 2005, by an imprint of the credit card or debit card; and

(2) For handwritten or imprinted copies of credit card or debit card receipts, only the merchant's copy of the receipt lists more than the last five digits of the account number.

4. This section shall become effective on January 1, 2003, and applies to any cash register or other machine or device that prints or imprints receipts of credit card or debit card transactions and which is placed into service on or after January 1, 2003. Any cash register or other machine or device that prints or imprints receipts on credit card or debit card transactions and which is placed in service prior to January 1, 2003, shall be subject to the provisions of this section on or after January 1, 2005.

(L. 2002 S.B. 895, A.L. 2003 H.B. 221 merged with S.B. 292 merged with S.B. 346)



Counterfeit credit cards, unlawful practices--defrauding issuer--authorization of acquirer.

407.434. 1. A person or employee of a person who is authorized by an acquirer to furnish money or merchandise upon presentation of a credit card by a cardholder and furnishes money or merchandise to the cardholder upon presentation of a credit card which such person knows to be a counterfeit credit card, expired credit card, revoked credit card, or a credit card used without the consent of the cardholder, and has furnished such money or merchandise to the cardholder with the intent to defraud the acquirer, has engaged in an unlawful practice.

2. A person who is authorized by an acquirer to furnish money or merchandise upon presentation of a credit card by a cardholder and, with intent to defraud the issuer, the acquirer, or the cardholder, fails to furnish money or merchandise which the person represents in writing to the issuer or the acquirer that he has furnished, has engaged in an unlawful practice.

3. A person who is authorized by an acquirer to furnish money or merchandise upon presentation of a credit card by a cardholder and, with the intent to defraud the issuer, the acquirer, or the cardholder, presents to the issuer or acquirer for payment, a credit card transaction record of a sale of merchandise, which such sale of merchandise was not made by the person or his agent or employee, has engaged in an unlawful practice.

4. A person who, without the acquirer's authorization, employs, solicits, or otherwise causes another person authorized by an acquirer to furnish money or merchandise upon presentation of a credit card by a cardholder, or employs, solicits, or otherwise causes, an agent or employee of such other authorized person to remit to the acquirer a credit card transaction record of a sale that was not made by such other authorized person or his agent or employee, has engaged in an unlawful practice.

(L. 1991 S.B. 112)



Penalties.

407.436. 1. Any person who willfully and knowingly, and with the intent to defraud, engages in any practice declared to be an unlawful practice in sections 407.430 to 407.436 of this credit user protection law shall be guilty of a class D felony.

2. The violation of any provision of sections 407.430 to 407.436 of this credit user protection law constitutes an unlawful practice pursuant to sections 407.010 to 407.130, and the violator shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.130. The attorney general shall have all powers, rights, and duties regarding violations of sections 407.430 to 407.436 as are provided in sections 407.010 to 407.130, in addition to rulemaking authority as provided in section 407.145.

(L. 1991 S.B. 112)



Short title.

407.450. Sections 407.450 to 407.478 shall be known and may be cited as the "Charitable Organizations and Solicitations Law".

(L. 1986 S.B. 685)

Effective 5-1-86

*No continuity with 407.450 as repealed by L. 1963 S.B. 2 10-102, effective 7-1-65.



Definitions.

407.453. As used in sections 407.450 to 407.478, the following terms shall mean:

(1) "Charitable organization", any person, as defined in section 407.010, who does business in this state or holds property in this state for any charitable purpose and who engages in the activity of soliciting funds or donations for, or purported to be for, any fraternal, benevolent, social, educational, alumni, historical or other charitable purpose;

(2) "Charitable purpose", any purpose which promotes, or purports to promote, directly or indirectly, the well-being of the public at large or any number of persons, whether such well-being is in general or limited to certain activities, endeavors or projects;

(3) "Educational institution", a school, college or other institution which has a defined curriculum, student body and faculty, and which conducts classes on a regular basis;

(4) "Professional fund-raiser", any person, as defined in section 407.010, who is retained under contract or otherwise compensated by or on behalf of a charitable organization primarily for the purpose of soliciting funds. The term "professional fund-raiser" shall not include any bona fide employee of a charitable organization who receives regular compensation and is not primarily employed for the purpose of soliciting funds;

(5) "Religious organization", any society, sect, persuasion, mission, church, parish, congregation, temple, convention or association of any of the foregoing, diocese or presbytery, or other organization, whether or not incorporated, or any employee thereof, no part of the net earnings of which inures to the benefit of any private party or individual associated with such organization, and that otherwise qualifies as an exempt organization under section 501(c)(3) of title 26, United States Code, as amended, that either:

(a) Meets at more or less regular intervals for worship of a supreme being or higher power, or for mutual support or edification in piety or with respect to the idea that a minimum standard of behavior from the standpoint of overall morality is to be observed; or

(b) Is, including but not limited to, any nursing, boarding, retirement, children's or orphan's home, or any foundation, commission, hospital, school, college, university, seminary, or other entity, which is owned, operated, controlled, supervised or principally supported by, or associated with through the sharing of common religious bonds and convictions, any organization which meets the requirements of this subdivision;

(6) "Solicitation", any request or appeal, either oral or written, or any endeavor to obtain, seek or plead for funds, property, financial assistance or other thing of value, including the promise or grant of any money or property of any kind or value for a charitable purpose, but excluding:

(a) Direct grants or allocation of funds received or solicited from any affiliated fund-raising organization by a member agency; and

(b) Unsolicited contributions received from any individual donor, foundation, trust, governmental agency or other source, unless such contributions are received in conjunction with a solicitation drive.

(L. 1986 S.B. 685)

Effective 5-1-86



Registration and reports, who shall file, exceptions.

407.456. 1. Except for charitable organizations which are exempted under subsection 2 of this section, no charitable organization shall solicit funds in this state, nor employ a professional fund-raiser to solicit funds in this state, for any charitable purpose unless it, and each professional fund-raiser employed by it, have filed all registrations and reports required by sections 407.450 to 407.478.

2. The provisions of sections 407.459 and 407.462, and subsection 1 of section 407.469 shall not apply to the following:

(1) Religious organizations;

(2) Educational institutions and their authorized and related foundations;

(3) Fraternal, benevolent, social, educational, alumni, and historical organizations, and any auxiliaries associated with any of such organizations, when solicitation of contributions is confined to the membership of such organizations or auxiliaries;

(4) Hospitals and auxiliaries of hospitals, provided all fund-raising activities and solicitations of contributions are carried on by employees of the hospital or members of the auxiliary and not by any professional fund-raiser who is employed as an independent contractor;

(5) Any solicitation for funds governed by chapter 130; and

(6) Any organization that has obtained an exemption from the payment of federal income taxes as provided in section 501(c)(3), 501(c)(7) or 501(c)(8) of Title 26, United States Code, as amended, if, in fact, no part of the net earnings of the organization inure to the benefit of any private party or individual associated with such organization.

3. Sections 407.450 to 407.478 shall apply regardless of any contrary provisions contained in any contract, agreement, instrument or other document.

(L. 1986 S.B. 685, A.L. 1988 H.B. 1760)



Register of documents, maintained by attorney general--public inspection, exception.

407.459. The attorney general shall establish and maintain a register of all documents filed by charitable organizations in accordance with the provisions of sections 407.450 to 407.478. Such register shall be open to public inspection; except that, the attorney general may withhold from public inspection documents or information obtained in the course of an investigation undertaken pursuant to the provisions of this chapter, or which otherwise may be withheld from public inspection by law.

(L. 1986 S.B. 685)

Effective 5-1-86



Registration and reports, required of soliciting organization, fee--form--exceptions.

407.462. 1. No charitable organization shall solicit funds in this state, nor employ a professional fund-raiser to solicit funds in this state, for any charitable purpose, unless it has filed with the office of the attorney general an initial registration, which shall be sworn to under oath and shall be in the form and manner prescribed by the attorney general, except that charitable organizations in existence and soliciting on May 1, 1986, may file such initial registration within one year of May 1, 1986. All initial registrations, and amendments thereto, shall be accompanied by a filing fee of fifteen dollars unless the attorney general, by rule, establishes a different filing fee. Amendments to initial registrations shall be filed as prescribed by the attorney general.

2. In addition to the documents required by subsection 1 of this section, every charitable organization shall, within seventy-five days of the close each of its fiscal years ending after the date on which the charitable organization files its initial registration under subsection 1 of this section, file an annual report. Each annual report shall be sworn to under oath, and shall be in the form and shall be filed in the manner prescribed by the attorney general. Each annual report shall be accompanied by a filing fee of fifteen dollars unless the attorney general, by rule, establishes a different filing fee. The provisions of this subsection shall not apply to:

(1) Any charitable organization which receives an allocation of money from an incorporated community chest or united fund, provided such community chest or united fund is complying with all provisions of this section relating to the filing of registrations, amendments to registrations and annual reports;

(2) Any charitable organization which does not actually raise or receive contributions in cash, goods or services valued in excess of the dollar amount established by the attorney general by rule, which amount shall not be less than ten thousand dollars, during the twelve-month period immediately preceding the date on which its annual report would otherwise be due under this subsection; or

(3) Any charitable organization which is a local affiliate of a statewide or national charitable organization if all local fund-raising expenses are paid by the statewide or national organization and the statewide or national organization files the annual report required by this subsection.

3. All fees collected pursuant to this section shall be credited to and deposited in the merchandising practices revolving fund.

(L. 1986 S.B. 685)

Effective 5-1-86



Registration by fund-raisers--form--oath--fees.

407.466. 1. No person shall act as a professional fund-raiser for any charitable organization unless he is registered with the attorney general and such registration has not expired or been cancelled. Applications for registration as a professional fund-raiser, and renewals thereof, shall be in the form and manner prescribed by the attorney general, and shall be sworn to under oath. All registrations issued to professional fund-raisers shall be effective for a period of one year.

2. All applications for registration as a professional fund-raiser, and renewals thereof, shall be accompanied by a fee of fifty dollars unless a different fee has been prescribed by the attorney general by rule. All fees collected pursuant to this subsection shall be credited to and deposited in the merchandising practices revolving fund.

(L. 1986 S.B. 685)

Effective 5-1-86



Disclosure of fund-raising costs and use of professional fund-raiser.

407.469. 1. All charitable organizations required to submit an annual report under section 407.462 shall, upon request, disclose the percentage of the funds solicited which were spent on the costs of fund raising in the last twelve-month period for which an annual report was filed under section 407.462. For purposes of this section, costs of fund raising shall include all money directly expended on fund raising and that portion of all administrative expenses and salaries of the charitable organization attributable to fund-raising activities. Any person who markets or collects funds on behalf of a charitable organization shall state on all literature soliciting such funds that a portion of the funds contributed are used for marketing expenses and paid to persons for marketing the charitable organization, if any such funds are so used.

2. Whenever a solicitation of funds on behalf of a charitable organization is undertaken by a professional fund-raiser, the professional fund-raiser shall disclose that fact to prospective contributors.

(L. 1986 S.B. 685, A.L. 1994 H.B. 1095)



Investigations by attorney general--investigative demand, how served--injunction, procedure.

407.472. 1. When it appears to the attorney general that a person has engaged in, is engaging in or is about to engage in any method, use, act or practice declared to be unlawful by sections 407.450 to 407.478, or when it appears that any funds solicited by or on behalf of any charitable organization are being used, or are about to be used, for any purpose in violation of this chapter or section 576.080, or when he or she believes it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in, is engaging in, or is about to engage in any such act or practice he or she may issue and cause to be served a civil investigative demand to assist in the investigation of the matter. The issuance and enforcement of each civil investigative demand shall be in compliance with all of the terms and provisions of sections 407.040 to 407.090.

2. Whenever it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in any method, use, act, or practice declared to be unlawful by sections 407.450 to 407.478, or when it appears that any funds solicited by or on behalf of any charitable organization are being used, or are about to be used, for any purpose in violation of this chapter or section 576.080, he or she may bring an action pursuant to section 407.100 for an injunction prohibiting such person from continuing such methods, uses, acts, or practices, or engaging therein, or doing anything in furtherance thereof. In any action brought by the attorney general pursuant to this subsection all of the provisions of sections 407.100 to 407.140 shall apply thereto.

(L. 1986 S.B. 685, A.L. 2002 S.B. 712)



Provisions of charitable organizations and solicitations law no bar to other civil actions.

407.478. Nothing in sections 407.450 to 407.478 shall be construed to preclude any person or group of persons from asserting any private cause of action they might have against a charitable organization.

(L. 1986 S.B. 685)

Effective 5-1-86



Unwanted household items, collection of deemed unfair business practice, when--receptacles, requirements.

407.485. 1. It shall be an unfair business practice in violation of section 407.020 for a for-profit entity or natural person to collect unwanted household items via a public receptacle and resell the deposited items for profit unless the deposited item receptacle prominently displays a statement in bold letters at least two inches high and two inches wide stating: "DEPOSITED ITEMS ARE NOT FOR CHARITABLE ORGANIZATIONS AND WILL BE RESOLD FOR PROFIT. DEPOSITED ITEMS ARE NOT TAX DEDUCTIBLE.".

2. It shall be an unfair business practice in violation of section 407.020 for a for-profit entity or natural person to collect donations of unwanted household items via a public receptacle and resell the donated items where some or all of the proceeds from the sale are directly given to a not-for-profit entity unless the donation receptacle prominently displays a statement in bold letters at least two inches high and two inches wide stating: "DONATIONS TO THE FOR-PROFIT COMPANY: (name of the company) ARE SOLD FOR PROFIT AND (% of proceeds donated to the not-for-profit) % OF ALL PROCEEDS ARE DONATED TO (name of the nonprofit beneficiary organization's name).".

3. It shall be an unfair business practice in violation of section 407.020 for a for-profit entity or natural person to collect donations of unwanted household items via a public receptacle and resell the donated items, where such for-profit entity is paid a flat fee, not contingent upon the proceeds generated by the sale of the collected goods, and one hundred percent of the proceeds from the sale of the items are given directly to the not-for-profit, unless the donation receptacle prominently displays a statement in bold letters at least two inches high and two inches wide stating: "THIS DONATION RECEPTACLE IS OPERATED BY THE FOR-PROFIT ENTITY: (name of the for-profit/individual) ON BEHALF OF (name of the nonprofit beneficiary organization's name).".

4. It shall be an unfair business practice in violation of section 407.020 for a not-for-profit entity to collect donations of unwanted household items via a public receptacle and resell the donated items unless the donation receptacle prominently displays a statement in bold letters at least two inches high and two inches wide stating: "THIS RECEPTACLE IS OWNED AND OPERATED BY THE NOT-FOR-PROFIT ENTITY: (name of the not-for-profit/charity) AND (% of proceeds donated to the not-for-profit) % OF THE PROCEEDS FROM THE SALE OF ANY DONATIONS SHALL BE USED FOR THE CHARITABLE MISSION OF (charity name/charitable cause).".

5. The term "bold letters" as used in subsections 1, 2, and 3 of this section shall mean a primary color on a white background so as to be clearly visible to the public.

6. Nothing in this section shall apply to paper, glass, or aluminum products that are donated for the purpose of being recycled in the manufacture of other products.

7. Any entity which, on or before June 1, 2009, has distributed one hundred or more separate public receptacles within the state of Missouri to which the provisions of subsection 2 or 3 of this section would apply shall be deemed in compliance with the signage requirements imposed by this section for the first six months after August 28, 2009, provided such entity has made or is making good faith efforts to bring all signage in compliance with the provisions of this section and all such signage is in complete compliance no later than six months after August 28, 2009.

8. All receptacles described in this section shall conspicuously display the name, address, and telephone number of the owner and operator of the receptacle. The owner or operator of the receptacle shall maintain permission to place the receptacle on the property from the property owner or his or her agent where the receptacle is located. Such permission shall be in writing and clearly identify the owner of the receptacle and property owner or his or her agent in addition to the nature of the collections and where proceeds will be accrued. Failure to secure such permission shall constitute an unfair business practice in addition to any other statutory conditions. Unless otherwise agreed upon in writing, the property owner or his or her agent may remove the receptacle. Any charges incurred in such removal shall be the responsibility of the owner of the receptacle. Unless the receptacle owner pays such charges within thirty calendar days of the sending of a written certified letter from the property owner stating his or her intent to remove the receptacle, the receptacle owner shall relinquish any right to the receptacle. If the receptacle does not conspicuously display the name, address, and telephone number of the owner and operator of the receptacle, the receptacle shall be considered abandoned property and may be destroyed or permanently possessed by the property owner or their agent.

*9. Any owner and operator of a receptacle that does not display the address of the owner and operator, but does display the website of the owner and operator, shall make the address easily accessible on such website for the property owner to send the letter specified in subsection 8 of this section. The provisions of this subsection shall expire on September 1, 2014.

(L. 2007 S.B. 384, A.L. 2009 H.B. 698, A.L. 2013 S.B. 157 and S.B. 102)

*Subsection 9 expires 9-01-14



No ordinance shall prohibit a nonprofit organization or veterans organization from reselling donated goods in an area with other retailers, limitation.

407.489. Notwithstanding any provision of section 89.020 to the contrary, the legislative body of all cities, towns, and villages is hereby prohibited from passing any zoning law, ordinance, or code that would prevent any entity organized pursuant to Section 501(c)(3) or Section 501(c)(19) of the Internal Revenue Code that owns or operates a retail business engaged in the practice of reselling donated goods from operating a business establishment within any area where any other business engaged in retail sales is permitted to operate; provided that at least eighty percent of all revenue generated by such entity is used to fund the charitable purpose of the organization.

(L. 2002 S.B. 810 1, A.L. 2012 S.B. 498)

Effective 5-30-12



Definitions.

407.511. As used in sections 407.511 to 407.556, unless the context clearly indicates otherwise, the following terms mean:

(1) "Mileage", the actual distance that a vehicle has traveled;

(2) "Odometer", an instrument for measuring and recording the actual distance a motor vehicle travels while in operation; but does not include any auxiliary odometer designed to be reset by the operator of the motor vehicle for the purpose of recording mileage on trips;

(3) "Person", any natural person, corporation, unincorporated association, partnership or any agent, corporate officer or partner acting in such capacity;

(4) "Repair and replacement", to restore to a sound working condition by replacing the odometer or any part thereof or by correcting what is inoperative;

(5) "Transfer", to change ownership by purchase, gift, or any other means;

(6) "Transferee", any person to whom ownership of a motor vehicle is transferred by purchase, gift, or any means other than by the creation of a security interest, and any person who, as agent, signs an odometer disclosure statement for the transferee; and

(7) "Transferor", any person who transfers his ownership in a motor vehicle by sale, gift, or any means other than by creation of a security interest, and any person who, as agent, signs an odometer disclosure statement for the transferor.

(L. 1983 S.B. 9, A.L. 1989 S.B. 327)



Odometer fraud, first degree, penalty.

407.516. 1. A person commits the crime of odometer fraud in the first degree if he advertises for sale, sells, installs or has installed any device which causes an odometer to register any mileage other than the true mileage driven.

2. For purposes of this section, the true mileage driven is that mileage driven by the vehicle as registered by the odometer within the manufacturer's designed tolerance.

3. Odometer fraud in the first degree is a class A misdemeanor.

(L. 1983 S.B. 9)

Effective 1-1-84



Odometer fraud, second degree, penalty.

407.521. 1. A person commits the crime of odometer fraud in the second degree if he, with the intent to defraud disconnects, resets, or alters the odometer of any motor vehicle with the intent to change the number of miles indicated thereon.

2. The disconnection, resetting, or altering of any odometer while in the possession of the person shall be prima facie evidence of intent to defraud.

3. Odometer fraud in the second degree is a class D felony.

(L. 1983 S.B. 9, A.L. 1986 S.B. 685)

Effective 5-1-86



Odometer fraud, third degree, penalty.

407.526. 1. A person commits the crime of odometer fraud in the third degree if, with the intent to defraud, he operates a motor vehicle less than ten years old on any street or highway knowing that the odometer of the motor vehicle is disconnected or not functioning.

2. Odometer fraud in the third degree is a class C misdemeanor.

(L. 1983 S.B. 9)

Effective 1-1-84



Repair or replacement--notice of alteration, how shown, removal prohibited, penalty.

407.531. 1. Nothing in sections 407.511 to 407.556 shall prevent the service, repair, or replacement of an odometer, provided the mileage indicated thereon remains the same as before the service, repair, or replacement occurred.

2. When the repaired or replaced odometer is incapable of registering the same mileage as before the service, repair, or replacement, the odometer shall be adjusted to read zero and a notice in writing shall be attached to the left door frame of the vehicle by the owner or his agent, specifying the mileage prior to repair or replacement of the odometer and the date on which it was repaired or replaced.

3. Removal or alteration of the notice required by subsection 2 of this section is an infraction.

(L. 1983 S.B. 9)

Effective 1-1-84



Odometer mileage to be shown on title, when--incorrect mileage on odometer, procedure--duties of director of revenue--liens on motor vehicle, release of, statement not required--penalties.

407.536. 1. Any person transferring ownership of a motor vehicle previously titled in this or any other state shall do so by assignment of title and shall place the mileage registered on the odometer at the time of transfer above the signature of the transferor. The signature of the transferor below the mileage shall constitute an odometer mileage statement. The transferee shall sign such odometer mileage statement before an application for certificate of ownership may be made. If the true mileage is known to the transferor to be different from the number of miles shown on the odometer or the true mileage is unknown, a statement from the transferor shall accompany the assignment of title which shall contain all facts known by the transferor concerning the true mileage of the motor vehicle. That statement shall become a part of the permanent record of the motor vehicle with the Missouri department of revenue. The department of revenue shall place on all new titles issued after September 28, 1977, a box titled "mileage at the time of transfer".

2. Any person transferring the ownership of a motor vehicle previously untitled in this or any other state to another person shall give an odometer mileage statement to the transferee. The statement shall include above the signature of the transferor and transferee the cumulative mileage registered on the odometer at the time of transfer. If the true mileage is known to the transferor to be different from the number of miles shown on the odometer or the true mileage is unknown, a statement from the transferor shall accompany the assignment of title which shall contain all facts known by the transferor concerning the true mileage of the motor vehicle. That statement shall become a permanent part of the records of the Missouri department of revenue.

3. If, upon receiving an application for registration or for a certificate of ownership of a motor vehicle, the director of revenue has credible evidence that the odometer reading provided by a transferor is materially inaccurate, he may place an asterisk on the face of the title document issued by the Missouri department of revenue, provided that the process required thereby does not interfere with his obligations under subdivision (2) of subsection 3 of section 301.190. The asterisk shall refer to a statement on the face and at the bottom of the title document which shall read as follows: "This may not be the true and accurate mileage of this motor vehicle. Consult the documents on file with the Missouri department of revenue for an explanation of the inaccuracy." Nothing in this section shall prevent any person from challenging the determination by the director of revenue in the circuit courts of the state of Missouri. The burden of proof shall be on the director of the department of revenue in all such proceedings.

4. The mileage disclosed by the odometer mileage statement for a new or used motor vehicle as described in subsections 1 and 2 of this section shall be placed by the transferor on any title or document evidencing ownership. Additional statements shall be placed on the title document as follows:

(1) If the transferor states that to the best of his knowledge the mileage disclosed is the actual mileage of the motor vehicle, an asterisk shall follow the mileage on the face of the title or document of ownership issued by the Missouri department of revenue. The asterisk shall reference to a statement on the face and bottom of the title document which shall read as follows: "Actual Mileage".

(2) Where the transferor has submitted an explanation why this mileage is incorrect, an asterisk shall follow the mileage on the face of the title or document of ownership issued by the Missouri department of revenue. The asterisk shall reference to a statement on the face and at the bottom of the title document which shall read as follows: "This is not the true and accurate mileage of this motor vehicle. Consult the documents on file with the Missouri department of revenue for an explanation of the inaccuracy." Further wording shall be included as follows:

(a) If the transferor states that the odometer reflects the amount of mileage in excess of the designed mechanical odometer limit, the above statement on the face of the title document shall be followed by the words: "Mileage exceeds the mechanical limits";

(b) If the transferor states that the odometer reading differs from the mileage and that the difference is greater than that caused by odometer calibration error and the odometer reading does not reflect the actual mileage and should not be relied upon, the above statement on the face of the title document shall be preceded by the words: "Warning Odometer Discrepancy".

5. The department of revenue shall notify all motor vehicle ownership transferees of the civil and criminal penalties involving odometer fraud.

6. Any person defacing or obscuring or otherwise falsifying any odometer reading on any document required by this section shall be guilty of a class D felony.

7. The granting or creation of a security interest or lien shall not be considered a change of ownership for the purpose of this section, and the grantor of such lien or security interest shall not be required to make an odometer mileage statement. The release of a lien by a mortgage holder shall not be considered a change of ownership of the motor vehicle for the purposes of this section. The mortgage holder or lienholder shall not be required to make an odometer disclosure statement or state the current odometer setting at the time of the release of the lien where there is no change of ownership.

8. For the purposes of the mileage disclosure requirements of this section, if a certificate of ownership is held by a lienholder, if the transferor makes application for a duplicate certificate of ownership, or as otherwise provided in the federal Motor Vehicle Information and Cost Savings Act and related federal regulations, the transferor may execute a written power of attorney authorizing a transfer of ownership. The person granted such power of attorney shall restate exactly on the assignment of title the actual mileage disclosed at the time of transfer. The power of attorney shall accompany the certificate of ownership and the original power of attorney and a copy of the certificate of ownership shall be returned to the issuing state in the manner prescribed by the director of revenue, unless otherwise provided by federal law, rule or regulation. The department of revenue may prescribe a secure document for use in executing a written power of attorney. The department shall collect a fee for each form issued, not to exceed the cost of procuring the form.

(L. 1977 S.B. 180, A.L. 1983 S.B. 9, A.L. 1988 H.B. 1581, A.L. 1989 S.B. 327, A.L. 1990 H.B. 1279, A.L. 1992 H.B. 884)

Effective 5-15-92



Attempt to commit odometer fraud in first or second degree, penalties.

407.542. 1. A person is guilty of attempt to commit odometer fraud in the first degree or odometer fraud in the second degree when, with the purpose of committing the offense, he does any act which is a substantial step towards the commission of the offense. A "substantial step" is conduct which is strongly corroborative of the firmness of the actor's purpose to complete the commission of the offense.

2. It is no defense to a prosecution under this section that the offense attempted was, under the actual attendant circumstances, factually or legally impossible of commission, if such offense could have been committed had the attendant circumstances been as the actor believed them to be.

3. An attempt to commit odometer fraud in the first or second degree is a class C misdemeanor.

(L. 1983 S.B. 9)

Effective 1-1-84



Conspiracy to commit odometer fraud in first or second degree, penalty.

407.543. 1. A person is guilty of conspiring with another person or persons to commit odometer fraud in the first or second degree if, with the purpose of promoting or facilitating its commission he agrees with such other person or persons that they or one or more of them will engage in conduct which constitutes such an offense.

2. The provisions of section 564.016 shall apply to this section and as is provided in that section conspiring to commit odometer fraud in the first or second degree is a class C misdemeanor.

(L. 1983 S.B. 9)

Effective 1-1-84



Prior convictions for odometer frauds, court may increase sentence, penalties.

407.544. Notwithstanding any provision of law to the contrary, a court may enhance the sentence for any person convicted of violating section 407.516, 407.521, 407.526, 407.536, 407.542 or 407.543 who has a prior conviction for any one of the aforegoing sections to a fine and to a time of imprisonment within the department of corrections and human resources for a term not to exceed that otherwise authorized by law for violation of a class D felony.

(L. 1983 S.B. 9, A.L. 1988 H.B. 1581)

Effective 7-1-89



Civil damages for odometer violations--venue.

407.546. 1. Any person who, with intent to defraud, violates any of the provisions of sections 407.511 to 407.556 shall be liable in civil damages to the purchaser or owner of the motor vehicle in an amount equal to three times the amount of actual damages sustained or two thousand five hundred dollars, whichever is the greater, and, in the case of any successful action to enforce the liability created by this section, the costs of the action together with reasonable attorney fees as determined by the court.

2. An action to enforce any liability created by subsection 1 of this section may be brought in the circuit court where the defendant resides or may be found or where the transfer of the ownership of the motor vehicle occurred, within two years from the date on which the liability arises.

3. Nothing contained in this section shall authorize a cause of action or damages against the seller of a motor vehicle, the odometer of which has been altered or tampered with by a previous owner, unless the seller knew or should have known of this alteration or tampering.

(L. 1983 S.B. 9, A.L. 1986 H.B. 1153, A.L. 1988 H.B. 1581)

Effective 7-1-89



Injunction--action may include suspension or revocation of license.

407.551. 1. The attorney general or any prosecuting attorney of this state may bring an action in any circuit court for injunctive relief to restrain any violation of sections 407.511 to 407.556.

2. Notwithstanding any other provision of chapter 536 or any other provision of law to the contrary, the attorney general or prosecuting attorney may after notice amend any such action to seek the revocation or suspension of any license issued by the department of revenue pursuant to chapter 301. The decision of the circuit court to revoke or suspend a license may be appealed as in any other civil matter.

3. The remedies available in this section are cumulative and in addition to any other remedies available.

(L. 1983 S.B. 9)

Effective 1-1-84



Attorney general or prosecutor to handle actions for violations, exception.

407.553. Notwithstanding other provisions of law to the contrary, the attorney general or the county prosecuting attorney shall have authority to file and prosecute any criminal or civil action authorized by sections 301.252 and 301.280 and sections 407.511 to 407.556 except for the civil action authorized by section 407.546.

(L. 1983 S.B. 9)

Effective 1-1-84



Dealer or manufacturer in violation subject to revocation or suspension of licenses--laws not applicable to certain motor vehicles.

407.556. 1. A violation of the provisions of sections 407.511 to 407.556 by any person licensed or registered as a manufacturer or dealer pursuant to the provisions of chapter 301, shall be considered a violation of the provisions of that chapter, subjecting that person to revocation or suspension of any license issued pursuant to the provisions of that chapter.

2. The provisions of sections 407.511 to 407.556 do not apply to the following motor vehicles:

(1) Any motor vehicle having a gross vehicle weight rating of more than sixteen thousand pounds;

(2) Any motor vehicle that is ten years old or older;

(3) Any motor vehicle sold directly by the manufacturer to any agency of the United States in conformity with contractual specifications; or

(4) Any new vehicle prior to its first transfer for purposes other than resale.

(L. 1983 S.B. 9, A.L. 1989 S.B. 327, A.L. 1990 H.B. 1279)

Effective 7-1-91



Private civil action against prohibited except if a commercial relationship existed--definition of commercial relationship.

407.558. Notwithstanding any other provision of law to the contrary, no person, as defined in section 407.010, may bring a private civil action seeking monetary damages or other relief against any licensed motor vehicle dealer with whom such person did not have a commercial relationship. For purposes of this section, "commercial relationship" shall mean a relationship between a person and a licensed motor vehicle dealer which thereby directly results in the retail sale or lease of a motor vehicle or other related merchandise from that motor vehicle dealer to the retail purchaser or lessee but shall not include any motor vehicle dealer in the chain of commerce with whom the purchaser or lessee did not directly and personally negotiate or communicate. No provision in this section shall prohibit a person from pursuing against a manufacturer or seller of a new or used automobile any claim not arising under this chapter.

(L. 2008 H.B. 1970 407.1373)



Definitions.

407.560. As used in sections 407.560 to 407.579, the following terms mean:

(1) "Collateral charges", those additional charges to a consumer not directly attributable to a manufacturer's suggested retail price label for the new motor vehicle. For the purposes of sections 407.560 to 407.579, "collateral charges" includes all sales tax, license fees, registration fees, title fees and motor vehicle inspections;

(2) "Comparable motor vehicle", an identical or reasonably equivalent motor vehicle;

(3) "Consumer", the purchaser, other than for the purposes of resale, of a new motor vehicle, primarily used for personal, family, or household purposes, and any person to whom such new motor vehicle is transferred for the same purposes during the duration of an express warranty applicable to such new motor vehicle, and any other person entitled by the terms of such warranty to enforce the obligations of the warranty;

(4) "Express warranty", any written affirmation of the fact or promise made by a manufacturer to a consumer in connection with the sale of new motor vehicles which relates to the nature of the material or workmanship or will meet a specified level of performance over a specified period of time;

(5) "Manufacturer", any person engaged in the manufacturing or assembling of new motor vehicles as a regular business;

(6) "New motor vehicle", any motor vehicle being transferred for the first time from a manufacturer, distributor or new vehicle dealer, which has not been registered or titled in this state or any other state and which is offered for sale, barter or exchange by a dealer who is franchised to sell, barter or exchange that particular make of new motor vehicle. The term "new motor vehicle" shall include only those vehicles propelled by power other than muscular power, but the term shall not include vehicles used as a commercial motor vehicle, off-road vehicles, mopeds, motorcycles or recreational motor vehicles as defined in section 301.010, except for the chassis, engine, powertrain and component parts of recreational motor vehicles. The term "new motor vehicle" shall also include demonstrators or lease-purchase vehicles as long as a manufacturer's warranty was issued as a condition of sale.

(L. 1984 H.B. 992 1)



Law applicable to breach of new motor vehicles warranties.

407.563. The provisions of sections 400.2-602 to 400.2-609 shall not apply to sales of new motor vehicles and such sales shall be governed by the provisions of sections 407.560 to 407.579.

(L. 1984 H.B. 992 2)



Report of nonconformity required, when--repairs, duty of manufacturer or agent, when.

407.565. For the purposes of sections 407.560 to 407.579, if a new motor vehicle does not conform to all applicable express warranties, and the consumer reports the nonconformity to the manufacturer, or its agent, during the term of such express warranties, or during the period of one year following the date of original delivery of the new motor vehicle to the consumer, whichever period expires earlier, the manufacturer, or its agent, shall make such repairs as are necessary to conform the new vehicle to such express warranties, notwithstanding the fact that such repairs are made after the expiration of such term or such one-year period.

(L. 1984 H.B. 992 3)



Replacement of motor vehicle or refund of purchase price, when--allowance deducted for consumer's use--reimbursement, when, application for.

407.567. 1. If the manufacturer, through its authorized dealer or its agent, cannot conform the new motor vehicle to any applicable express warranty by repairing or correcting any default or condition which impairs the use, market value, or safety of the new motor vehicle to the consumer after a reasonable number of attempts, the manufacturer shall, at its option, either replace the new motor vehicle with a comparable new vehicle acceptable to the consumer, or take title of the vehicle from the consumer and refund to the consumer the full purchase price, including all reasonably incurred collateral charges, less a reasonable allowance for the consumer's use of the vehicle. The subtraction of a reasonable allowance for use shall apply when either a replacement or refund of the new motor vehicle occurs.

2. Refunds shall be made to the consumer and lienholder of record, if any, as their interests may appear.

3. (1) Upon taking the title to a vehicle under this section, the manufacturer may apply to the department of revenue for a reimbursement equal to any amounts refunded to a consumer for any sales tax, license fees, registration fees, and title fees paid by the consumer as a result of purchasing the vehicle. Upon the receipt of a written request for a refund, accompanied by satisfactory proof that such sales tax and fees on the vehicle were paid when or after the vehicle was purchased and that the manufacturer has refunded such sales tax and fees to the consumer, lienholder, or lessor of the vehicle, the department of revenue shall refund to the manufacturer an amount equal to the amounts refunded to a consumer for such sales tax and fees paid by the consumer as a result of purchasing the vehicle.

(2) The manufacturer may, in lieu of applying to the department of revenue for a reimbursement under this subsection, direct the consumer to apply to the department of revenue for a refund of any sales tax, license fees, registration fees, and title fees paid by the consumer as a result of purchasing the vehicle. The manufacturer shall provide the consumer with the documentation required to prove that the consumer paid such sales tax and fees to the manufacturer. Upon the receipt of a written request by the consumer for a refund, accompanied by satisfactory proof that such sales tax and fees on the vehicle were paid when or after the vehicle was purchased, and a written statement from the manufacturer that such sales tax and fees were not refunded to the consumer, lienholder, or lessor of the vehicle, the department of revenue shall refund to the consumer an amount equal to the amounts for such sales tax and fees paid by the consumer as a result of purchasing the vehicle.

(L. 1984 H.B. 992 4 subsecs. 1, 2, A.L. 2004 S.B. 1233, et al.)



Affirmative defenses.

407.569. It shall be an affirmative defense to any claim under sections 407.560 to 407.579 that:

(1) An alleged nonconformity does not substantially impair the use, market value, or safety of the motor vehicle;

(2) A nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of a motor vehicle;

(3) A claim by a consumer was not filed in good faith; or

(4) Any other affirmative defense allowed by law.

(L. 1984 H.B. 992 4 subsec. 3)



Presumptions of nonconformity--exception.

407.571. It shall be presumed that a reasonable number of attempts have been undertaken to conform a new motor vehicle to the applicable express warranties if within the terms, conditions, or limitations of the express warranty, or during the period of one year following the date of original delivery of the new motor vehicle to a consumer, whichever expires earlier, either:

(1) The same nonconformity has been subject to repair four or more times by the manufacturer, or its agents, and such nonconformity continues to exist; or

(2) The new vehicle is out of service by reason of repair of the nonconformity by the manufacturer, through its authorized dealer or its agents, for a cumulative total of thirty or more working days, exclusive of down time for routine maintenance as prescribed by the manufacturer, since delivery of the new vehicle to the consumer. The thirty-day period may be extended by a period of time during which repair services are not available to the consumer because of conditions beyond the control of the manufacturer or its agents.

(L. 1984 H.B. 992 4 subsec. 4)



Warranty extension, when--complaint remedies information to be furnished--notice to manufacturer required--manufacturer's duties, time limitation.

407.573. 1. The terms, conditions, or limitations of the express warranty, or* the period of one year following the date of original delivery of the new motor vehicle to a consumer, whichever expires earlier, may be extended if the new motor vehicle warranty problem has been reported but has not been repaired by the manufacturer, or its agent, by the expiration of the applicable time period.

2. The manufacturer shall provide information for consumer complaint remedies with each new motor vehicle. It shall be the responsibility of the consumer, or his representative, prior to availing himself of the provisions of sections 407.560 to 407.579, to give written notification to the manufacturer of the need for the repair of the nonconformity, in order to allow the manufacturer an opportunity to cure the alleged defect. The manufacturer shall immediately notify the consumer of a reasonably accessible repair facility of a franchised new vehicle dealer to conform the new vehicle to the express warranty. After delivery of the new vehicle to an authorized repair facility by the consumer, the manufacturer shall have ten calendar days to conform the new motor vehicle to the express warranty. Upon notification from the consumer that the new vehicle has not been conformed to the express warranty, the manufacturer shall inform the consumer if an informal dispute settlement procedure has been established by the manufacturer in accordance with section 407.575. However, if prior notice by the manufacturer of an informal dispute settlement procedure has been given, no further notice is required.

3. Any action brought under sections 407.560 to 407.579 shall be commenced within six months following expiration of the terms, conditions, or limitations of the express warranty, or within eighteen months following the date of original delivery of the new motor vehicle to a consumer, whichever is earlier, or, in the event that a consumer resorts to an informal dispute settlement procedure as provided in sections 407.560 to 407.579, within ninety days following the final action of any panel established pursuant to such procedure.

(L. 1984 H.B. 992 5)

*Word "of" appears in original rolls.



Manufacturer with approved settlement procedure, consumer's duty.

407.575. If a manufacturer has established an informal dispute settlement procedure which complies in all respects with the provisions of the code of Federal Regulations, 16 CFR 703, provisions of sections 407.560 to 407.579 concerning refunds or replacements shall not apply to any consumer who has not first resorted to such procedure.

(L. 1984 H.B. 992 6)



Court action by consumer, costs, expenses, attorney's fees, how paid.

407.577. 1. If a consumer undertakes a court action after complying with the provisions of sections 407.560 to 407.579 and finally prevails in that action, he shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney's fees based on actual time expended, determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action.

2. If any claim by a consumer under sections 407.560 to 407.579 is found by a court to have been filed in bad faith, or solely for the purpose of harassment, or in the absence of a substantial justifiable issue of either law or fact raised by the consumer, or for which the final recovery is not at least ten percent greater than any settlement offer made by the manufacturer prior to the commencement of the court action, then the consumer shall be liable for all costs and reasonable attorney's fees incurred by the manufacturer, or its agent, as a direct result of the bad faith claim.

(L. 1984 H.B. 992 7)



Consumer's right to other remedies--law to apply, when.

407.579. 1. Except as provided in subdivision (1) of section 407.560, nothing in sections 407.560 to 407.579 shall in any way limit the rights or remedies which are otherwise available to a consumer at law or in equity.

2. Sections 407.560 to 407.579 shall apply to any new motor vehicle sold after January 1, 1985.

(L. 1984 H.B. 992 8, 9)



Purchase or trade of motor vehicles with certificates of title, requirements--resale of such vehicles, requirements--dealer liability, when--seller misrepresentation, liability.

407.581. 1. Notwithstanding the provisions of sections 301.200 and 301.210, any person licensed as a motor vehicle dealer under sections 301.550 to 301.573 shall be authorized to purchase or accept in trade any motor vehicle for which there has been issued a certificate of title, and to receive such vehicle subject to any existing liens thereon created and perfected under sections 301.600 to 301.660 provided the licensed dealer receives the following:

(1) A signed written contract between the licensed dealer and the owner of the vehicle; and

(2) Physical delivery of the vehicle to the licensed dealer; and

(3) A power of attorney from the owner to the licensed dealer, in accordance with subsection 4 of section 301.300, authorizing the licensed dealer to obtain a duplicate or replacement title in the owner's name and sign any title assignments on the owner's behalf.

2. If the dealer complies with the requirements of subsection 1 of this section, the sale or trade of the vehicle to the dealer shall be considered final.

3. If a licensed dealer complies with the requirements of subsection 1 of this section, the licensed dealer may sell such vehicle prior to receiving and assigning to the purchaser the certificate of title, provided such dealer complies with the following:

(1) All outstanding liens created on the vehicle pursuant to sections 301.600 to 301.660 have been paid in full, and the dealer provides a copy of proof or other evidence to the purchaser; and

(2) The dealer has obtained proof or other evidence from the department of revenue confirming that no outstanding child support liens exist upon the vehicle at the time of sale and provides a copy of said proof or other evidence to the purchaser; and

(3) The dealer has obtained proof or other evidence from the department of revenue confirming that all applicable state sales tax has been satisfied on the sale of the vehicle to the previous owner and provides a copy of said proof or other evidence to the purchaser; and

(4) The dealer has signed and submitted an application for duplicate or replacement title for the vehicle pursuant to subsection 4 of section 301.300 and provides a copy of the application to the purchaser, along with a copy of the power of attorney required under subsection 1 of this section.

4. Following a sale or other transaction in which a certificate of title has not been assigned from the owner to the dealer, a licensed dealer shall, within five business days, apply for a duplicate or replacement title. Upon receipt of a duplicate or replacement title applied for pursuant to subsection 4 of section 301.300, the dealer shall assign and deliver said certificate of title to the purchaser of the vehicle within five business days. The dealer shall maintain proof of the assignment and delivery of the certificate of title to the purchaser. For purposes of this subsection, a dealer shall be deemed to have delivered the certificate of title to the purchaser upon either:

(1) Physical delivery of the certificate of title to any of the purchasers identified in the contract with the dealer; or

(2) Mailing of the certificate, postage prepaid, return receipt requested, to any of the purchasers at any of their addresses identified in the contract with the dealer.

5. If a dealer fails to comply with subsection 3 of this section, and the purchaser of the vehicle is thereby damaged, then the dealer shall be liable to the purchaser of the vehicle for actual damages, plus court costs and reasonable attorney fees.

6. If a dealer fails to comply with subsection 4 of this section, and the purchaser of the vehicle is thereby damaged, then the dealer shall be liable to the purchaser of the vehicle for actual damages, plus court costs and reasonable attorney fees. If the dealer cannot be found by the purchaser after making reasonable attempts, and thereby fails to assign and deliver the duplicate or replacement certificate of title to the purchaser, as required by subsection 4 of this section, then the purchaser may deliver to the director a copy of the contract for sale of the vehicle, a copy of the application for duplicate title provided by the dealer to the purchaser, a copy of the secure power of attorney allowing the dealer to assign the duplicate title, and the proof or other evidence obtained by the purchaser from the dealer under subsection 3 of this section. Thereafter, the director shall mail by certified mail, return receipt requested, a notice to the dealer at the last address given to the department by that dealer. That notice shall inform the dealer that the director intends to cancel any prior certificate of title issued to the dealer on the vehicle and issue to the purchaser a certificate of title in the name of the purchaser, subject to any liens incurred by the purchaser in connection with the purchase of the vehicle, unless the dealer, within ten business days from the date of the director's notice, files with the director a written objection to the director taking such action. If the dealer does file a timely, written objection with the director, then the director shall not take any further action without an order from a court of competent jurisdiction. However, if the dealer does not file a timely, written objection with the director, then the director shall cancel the prior certificate of title issued to the dealer on the vehicle and issue a certificate of title to the purchaser of the vehicle, subject to any liens incurred by the purchaser in connection with the purchase of the vehicle and subject to the purchaser satisfying all applicable taxes and fees associated with registering the vehicle.

7. If a seller fraudulently misrepresents to a dealer that the seller is the owner of a vehicle and the dealer or any subsequent purchaser is thereby damaged, then the seller shall be liable to the dealer and any subsequent purchaser for actual damages, plus court costs and reasonable attorney fees.

8. When a lienholder is damaged as a result of acts or omissions by the dealer to the lienholder or any party covered by subsections 5, 6, and 7 of this section, or by any combination of claims under this subsection, then the dealer shall be liable to the lienholder for actual damages, plus court costs and reasonable attorney fees.

9. No court costs or attorney fees shall be awarded under this section unless, prior to filing any such action, the following conditions have been met:

(1) The aggrieved party seeking damages has delivered an itemized written demand of the party's actual damages to the party from whom damages are sought; and

(2) The party from whom damages are sought has not satisfied the written demand within thirty days after receipt of the written demand.

(L. 2005 H.B. 487 301.894)



Warranty repairs, labor cost compensation to dealer.

407.583. When a dealer makes repairs to any motor vehicle or vessel pursuant to any warranty provision, the dealer shall receive from the manufacturer or distributor giving the warranty, reasonable compensation for labor at a rate no less than that posted by the dealer for labor not under warranty.

(L. 1987 H.B. 232 1, A.L. 1990 H.B. 1279)



Definitions.

407.585. As used in sections 407.585 to 407.592, the following terms mean:

(1) "Collateral charges", those additional charges to a consumer not directly attributable to a manufacturer's suggested retail price label for farm machinery;

(2) "Comparable farm machinery", an identical or reasonably equivalent piece of farm machinery;

(3) "Consumer", the purchaser, other than for the purposes of resale, of new farm machinery, primarily used for agricultural purposes, and any person to whom such new farm machinery is transferred for the same purposes during the duration of an express warranty applicable to such new farm machinery, and any other person entitled by the terms of such warranty to enforce the obligations of the warranty;

(4) "Express warranty", any written affirmation of fact or promise made by a manufacturer to a consumer in connection with the sale of new farm machinery which relates to the nature of the material or workmanship or will meet a specified level of performance over a specified period of time. For the purposes of sections 407.585 to 407.592, express warranties do not include implied warranties;

(5) "Farm machinery", any self-propelled equipment or machinery used for agricultural purposes being transferred for the first time from a manufacturer, distributor or new farm machinery dealer, which has not been registered or titled in this state or any other state and which is offered for sale, barter or exchange by a dealer who is franchised to sell, barter or exchange that particular make of new farm machinery; "new farm machinery" as defined in sections 407.585 to 407.592 shall include farm machinery propelled by power other than muscular power, but the term shall not include off-road vehicles other than self-propelled equipment and machinery used for agricultural purposes;

(6) "Manufacturer", any person engaged in the manufacturing or assembling of new farm machinery as a regular business;

(7) "Nonconformity", any condition of the farm machinery that makes it impossible to use for the purpose for which it was intended;

(8) "Reasonable allowance for consumer use":

(a) That amount attributable to use by the consumer prior to the consumer's first report of the nonconformity to the manufacturer or its authorized dealers;

(b) That amount attributable to use by the consumer during any period subsequent to such report when the farm machinery is not out of service by reason of repair of the reported nonconformity; and

(c) That amount attributable to use by the consumer of the farm machinery provided by the manufacturer or its authorized dealer. While the machine is out of service by reason of repair of the reported nonconformity, but in any event not less than the fair rental value of the farm machinery.

(L. 1987 H.B. 76 1)



Law applicable to breach of new farm machinery warranties--report of nonconformity required, when--repairs, duty of manufacturer or agent, when.

407.586. 1. The provisions of sections 400.2-602 to 400.2-609* shall not apply to sales of new farm machinery and such sales shall be governed by the provisions of sections 407.585 to 407.592.

2. For the purposes of sections 407.585 to 407.592, if new farm machinery does not conform to all applicable express warranties, and the consumer reports the nonconformity to the manufacturer, or its agent during the term of such express warranties, or during the period of one year following the date of original delivery of the new farm machinery to the consumer, whichever period expires earlier, the manufacturer, or its agent, shall make such repairs as are necessary to conform the new machinery to such express warranties, notwithstanding the fact that such repairs are made after the expiration of such term or such one-year period.

(L. 1987 H.B. 76 2, 3)

*"400.609" appears in original rolls, an apparent typographical error.



Replacement of farm machinery or refund of purchase price, when--allowance deducted for consumer's use--refund made to whom.

407.588. 1. If the manufacturer, or its agent, cannot conform the new farm machinery to any applicable express warranty by repairing or correcting any default or condition which substantially impairs the use or market value of the new farm machinery to the consumer after a reasonable number of attempts, the manufacturer shall give the consumer the option of having the manufacturer either replace the new farm machinery with a comparable new farm machinery acceptable to the consumer, or take title of the machine from the consumer and refund to the consumer the full purchase price, including all reasonably incurred collateral charges, less a reasonable allowance for the consumer's use of the machine. The subtraction of a reasonable allowance for use shall apply when either a replacement or refund of the new farm machinery occurs.

2. Refunds shall be made to the consumer and lienholder of record, if any, as their interests may appear.

(L. 1987 H.B. 76 4 subsecs. 1, 2)



Affirmative defenses.

407.589. 1. It shall be an affirmative defense to any claim under sections 407.585 to 407.592 that:

(1) An alleged nonconformity does not substantially impair the use, market value, or safety of the farm machinery;

(2) A nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of a farm machinery by a consumer;

(3) A claim by a consumer was not filed in good faith; or

(4) Any other affirmative defense allowed by law.

2. It shall be presumed that a reasonable number of attempts have been undertaken to conform a new farm machine to the applicable express warranties if within the terms, conditions, or limitations of the express warranty, or during the period of one year following the date of original delivery of the new farm machinery to a consumer, whichever expires earlier, either:

(1) The same nonconformity has been subject to repair five or more times by the manufacturer, or its agents, and such nonconformity continues to exist; or

(2) The new farm machinery is out of service by reason of repair of the nonconformity by the manufacturer, or its agents, for a cumulative total of thirty or more working days, exclusive of down time for routine maintenance as prescribed by the manufacturer, since delivery of the new farm machinery to the consumer. The thirty-day period may be extended by a period of time during which repair services are not available to the consumer because of conditions beyond the control of the manufacturer or its agents.

(L. 1987 H.B. 76 4 subsecs. 3, 4)



Information on remedies to be furnished consumer--notice of complaint to manufacturer required--manufacturer's duties, time limitation--farm machinery furnished to consumer, when--costs to dealer to be reimbursed, actions brought when.

407.590. 1. The manufacturer shall provide information for consumer complaint remedies with each new farm machinery. It shall be the responsibility of the consumer, or his representative, prior to availing himself of the provisions of sections 407.585 to 407.592, to give written notification to the manufacturer of the need for the repair of the nonconformity, in order to allow the manufacturer an opportunity to cure the alleged defect. The manufacturer shall immediately notify the consumer of a reasonably accessible repair facility of a franchised new farm machinery dealer to conform the new farm machinery to the express warranty. After delivery of the new farm machinery to an authorized repair facility by the consumer, the manufacturer shall have thirty calendar days to conform the new farm machinery to the express warranty in appropriate seasonable use times, and sixty days in other times. The department of agriculture shall designate appropriate seasonal use times for all machinery covered by the provisions of sections 407.585 to 407.592. Upon notification from the consumer that the new farm machinery has not been conformed to the express warranty, the manufacturer shall inform the consumer if an informal dispute settlement procedure has been established by the manufacturer. However, if prior notice by the manufacturer of an informal dispute settlement procedure has been given, no further notice is required. In the event any repairs which may be required under any warranty takes more than fourteen working days to complete, then said manufacturer shall supply at no cost a like piece of farm machinery for use by the consumer if requested by the consumer during said time of repair. Any costs incurred by a dealer under the provisions of sections 407.585 to 407.592 shall be reimbursed to the dealer by the manufacturer.

2. Any action brought under sections 407.585 to 407.592 shall be commenced within six months following expiration of the terms, conditions, or limitations of the express warranty, or within eighteen months following the date of original delivery of the new farm machinery to a consumer, whichever is earlier, or, in the event that a consumer resorts to an informal dispute settlement procedure as provided in sections 407.585 to 407.592, within ninety days following the final action of any panel established pursuant to such procedure. In the event an action is brought under the provisions of sections 407.585 to 407.592 the prevailing party shall be allowed to recover any court costs and reasonable attorneys fees.

(L. 1987 H.B. 76 5)



Law applicable to machinery sold after January 1, 1988, not to affect prior contracts--dealers reimbursed for labor, rate.

407.592. Sections 407.585 to 407.592 shall apply to any new farm machinery sold after January 1, 1988, but no provision of sections 407.585 to 407.592 shall operate or be construed to invalidate, impair, or otherwise infringe upon the specific requirements of any contract between a dealer and a manufacturer entered into prior to September 28, 1987, and which is in effect on September 28, 1987; provided, however, that in any case wherein warranty repair work is performed for a consumer by a farm equipment dealer under the provisions of a manufacturer's express warranty, the manufacturer shall reimburse the dealer at an hourly labor rate that is the same or greater than the hourly labor rate the dealer currently charges consumers for nonwarranty repair work. The dealer may accept the manufacturer's reimbursement terms and conditions in lieu of the above.

(L. 1987 H.B. 76 6, A.L. 2002 H.B. 1348)



Definitions.

407.600. As used in sections 407.600 to 407.630, the following terms shall mean:

(1) "Accommodations", any apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or any other private or commercial structure which is situated on real property and designed for occupancy by one or more individuals, which is made available to the purchasers of a time-share plan;

(2) "Enrolled", paid membership in an exchange program or membership in an exchange program evidenced by written acceptance or confirmation of membership;

(3) "Exchange company", the person operating an exchange program;

(4) "Exchange program", any opportunity or procedure for the assignment or exchange of time-share periods among purchasers in the same or other time-share plans;

(5) "Facilities", any structure, service, improvement, campground, recreational vehicle park or real property, improved or unimproved, which is made available to the purchasers of a time-share plan;

(6) "Person", any natural person or his legal representative, partnership, domestic or foreign corporation, company, trust, business entity or association, and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee or cestui que trust thereof;

(7) "Promotion", any advertisement, whether by mail, radio, television or personal sales, in which a time-share property is offered for sale by use of a sweepstakes;

(8) "Sweepstakes", a method of promoting the sale of time-share plans which involves the offering, giving, or awarding of prizes which have odds associated with the actual delivery of the prize or gift;

(9) "Time-share periods", all periods of time when a purchaser of a time-share plan is entitled to the possession and use of the accommodations or facilities, or both, of a time-share plan regardless of whether such periods are designated as one or more specific days, weeks or months;

(10) "Time-share developments", a single specific parcel of real property from which only time-share plans are offered for sale or sold;

(11) "Time-share plan", any arrangement, plan, scheme or similar device, other than an exchange program, whether by membership, agreement, tenancy in common, sale, lease, deed, rental agreement, license, right-to-use agreement or any other means, whereby a purchaser, in exchange for a consideration, receives one or more time-share periods, or any type of interval or joint ownership in, or a right-to-use, any accommodation or facility for a period of time which is less than a full continuous and uninterrupted year during any given year, and which extends for a period of more than three years, as to each individual time-share development subject to the purchase;

(12) "Time-share unit", an accommodation or facility of a time-share plan which is divided into time-share periods, or is otherwise subject to interval or joint ownership or use by the purchaser of the time-share plans;

(13) "Prize/gift", any merchandise offered in any time-share promotional device, sweepstakes, drawing or display booth which is used to induce or encourage the attendance of any time-share sales solicitation or presentation.

(L. 1985 H.B. 96, et al., A.L. 1988 H.B. 988)



Promotion program, notice to attorney general, requirements--unlawful practices--failure to comply, penalty.

407.610. 1. Any person who intends to use any promotional device or promotional program, including any sweepstakes, gift award, drawing or display booth, or any other such award or prize inducement items, to advertise, solicit sales or sell any time-share period, time-share plan, or time-share property in the state of Missouri or sell any tourist-related services as defined pursuant to subsection 9 of this section where a consumer is required to provide any consideration other than monetary for such tourist-related services, shall notify the Missouri attorney general in writing of this intention not less than fourteen days prior to release of such materials to the public. Included with such notice shall be an exact copy of each promotional device and promotional program to be used. Each promotional device, promotional program, and the notice thereof shall include the following information:

(1) A statement that the promotional device or promotional program is being used for the purpose of soliciting sales of a time-share period, time-share plan or time-share property;

(2) The date by which all such awards or other prize inducement items will be awarded;

(3) The method by which all such items will be awarded;

(4) The odds of being awarded such items;

(5) The manufacturer's suggested retail price of such items; and

(6) The names and addresses of each time-share plan or business entity participating in the promotional device or promotional program.

2. In the case of any promotional device or promotional program to advertise, solicit sales, or sell any time-share period, time-share plan, or time-share property in this state, the information required under subsection 1 of this section for each promotional device or promotional program, and the notice thereof, shall be provided in writing or electronically to the prospective purchaser at least once within a reasonable time period before a scheduled sales presentation to ensure that the prospective purchaser receives the information prior to attending such presentation. The required information need not be included in every advertisement or other written, oral or electronic communication provided or made to a prospective purchaser before a scheduled sales presentation.

3. Any material change in a promotional device or promotional program previously submitted to the attorney general shall constitute a new promotional device or promotional program and shall be resubmitted to the attorney general with the notice thereof.

4. It shall be a violation of section 407.020 for any person to:

(1) Fail to comply with the provisions of the notice requirements of this section;

(2) Provide to the attorney general in the notice required by this section any information that is false or misleading in a material manner;

(3) Represent to any person that the filing of the notice of the promotional device or the promotional program constitute an endorsement or approval of the promotional device or promotional program by the attorney general;

(4) Engage in any act or practice declared to be unlawful by section 407.020 in connection with the use of any promotional device or promotional program or any advertisement, or sale of time-share plans, time-share periods or time-share property.

5. At least one of each prize featured in a promotional program shall be awarded by the day and year specified in the promotion. When a promotion promises the award of a certain number of each prize, such number of prizes shall be awarded by the date and year specified in the promotion. A record shall be maintained containing the names and addresses of winners of the prizes and the record shall be made available, upon request, to the public, upon the payment of reasonable reproduction costs. If a seller for any reason does not provide, at the time of a site visitation or visitation to a time-share sales office, the inducement gift which was promised, the seller shall deliver the gift, or an acceptable substitute therefor agreed upon in writing, to the prospective purchaser or purchaser no later than ten days following such visitation, or shall deliver instead of such gift cash in an amount equal to the retail value of the gift.

6. If a prospective purchaser or purchaser does not receive the gift or the cash as provided in subsection 5 of this section, he may bring an action under the provisions of section 407.025. For purposes of actions brought pursuant to this section, the term "actual damages", as used in section 407.025, shall mean at least five times the cash retail value of the most expensive gift offered, but shall not exceed one thousand dollars, in addition to such other actual damages as may be determined by the evidence.

7. The provisions of sections 407.600 to 407.630 shall not apply to a person who has acquired a time-share period for his own occupancy and later offers it for resale.

8. If the sale of a time-share plan or of time-share property is subject to the provisions of sections 407.600 to 407.630, such sale shall not be subject to the provisions of chapter 339.

9. For the purposes of this section, the term "tourist-related services" includes, but is not limited to, selling or entering into contracts or other arrangements under which a purchaser receives a premium, coupon or contract for car rentals, lodging, transfers, entertainment, sightseeing or any service reasonably related to air, sea, rail, motor coach or other medium of transportation directly to the consumer.

(L. 1985 H.B. 96, et al., A.L. 1988 H.B. 988, A.L. 2002 H.B. 1041, A.L. 2007 S.B. 166)



Cancellation of purchase--printed notice of right to cancel to be given purchaser--form requirements.

407.620. In addition to any other remedy by which such an agreement may be rescinded or otherwise voided, a purchaser of a time-share plan or time-share property has five days after the day of purchase to cancel the purchase. Printed notice of this right to cancel shall be given to the purchaser in writing with the use of 18-point boldface type in the following manner: NOTICE YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHIN FIVE DAYS AFTER THE DATE OF THIS AGREEMENT. CANCELLATION MUST BE IN WRITING AND IF SENT BY MAIL, ADDRESSED TO THE OTHER CONTRACTING PARTY AS SHOWN ON THIS AGREEMENT, CANCELLATION WILL BE ACCOMPLISHED AT THE MOMENT THE LETTER IS POSTMARKED. IF SENT BY MAIL, THE LETTER MAY BE CERTIFIED WITH A RETURN RECEIPT REQUESTED. YOUR RIGHT TO CANCEL CANNOT BE WAIVED.

(L. 1985 H.B. 96, et al.)

Effective 5-31-85



Exchange program--information required to be furnished purchaser--exchange companies to file certain information annually--failure to comply, penalty.

407.625. 1. If a purchaser is offered the opportunity to subscribe to any exchange program, the developer shall, except as provided in subsection 2 of this section, deliver to the purchaser, prior to the execution of any contract between the purchaser and the exchange company and the sales contract, at least the following information regarding such exchange program, and the purchaser shall certify, in writing, to the receipt of such written information:

(1) The name and address of the exchange company;

(2) The names of all officers, directors, and shareholders owning five percent or more of the outstanding stock of the exchange company;

(3) Whether the exchange company or any of its officers or directors has any legal or beneficial interest in any developer or managing agent for any time-share plan participating in the exchange program and, if so, the name and location of the time-share plan and the nature of the interest;

(4) Unless the exchange company is also the developer or an affiliate, a statement that the purchaser's contract with the exchange company is a contract separate and distinct from the sales contract;

(5) Whether the purchaser's participation in the exchange program is dependent upon the continued affiliation of the time-share plan with the exchange program;

(6) Whether the purchaser's membership or participation, or both, in the exchange program is voluntary or mandatory;

(7) A complete and accurate description of the terms and conditions of the purchaser's contractual relationship with the exchange company and the procedure by which changes thereto may be made;

(8) A complete and accurate description of the procedure to qualify for and effectuate exchanges;

(9) A complete and accurate description of all limitations, restrictions, or priorities employed in the operation of the exchange program, including, but not limited to, limitations on exchanges based on seasonality, unit size, or levels of occupancy, expressed in boldfaced type, and, in the event that such limitations, restrictions, or priorities are not uniformly applied by the exchange program, a clear description of the manner in which they are applied;

(10) Whether exchanges are arranged on a space available basis and whether any guarantees of fulfillment of specific requests for exchanges are made by the exchange program;

(11) Whether and under what circumstances an owner, in dealing with the exchange company, may lose the use and occupancy of his time-share in any properly applied for exchange without his being provided with substitute accommodations by the exchange company;

(12) The fees or range of fees for participation by owners in the exchange program, a statement whether any such fees may be altered by the exchange company, and the circumstances under which alterations may be made;

(13) The name and address of the site of each time-share property, accommodation or facility which is participating in the exchange program;

(14) The number of units in each property participating in the exchange program which are available for occupancy and which qualify for participation in the exchange program, expressed within the following numerical groupings: 1-5, 6-10, 11-20, 21-50, and 51 and over;

(15) The number of owners with respect to each time-share plan or other property which are eligible to participate in the exchange program expressed within the following numerical groupings: 1-100, 101-249, 250-499, 500-999, and 1,000 and over; and a statement of the criteria used to determine those owners who are currently eligible to participate in the exchange program;

(16) The disposition made by the exchange company of time-shares deposited with the exchange program by owners eligible to participate in the exchange program and not used by the exchange company in effecting exchanges;

(17) The following information, which, except as provided in subsection 2 of this section, shall be independently audited by a certified public accountant or accounting firm in accordance with the standards of the Accounting Standards Board of the American Institute of Certified Public Accountants and reported for each year no later than July first of the succeeding year, beginning no later than July 1, 1986:

(a) The number of owners enrolled in the exchange program. Such numbers shall disclose the relationship between the exchange company and owners as being either fee paying or gratuitous in nature;

(b) The number of time-share properties, accommodations or facilities eligible to participate in the exchange program categorized by those having a contractual relationship between the developer or the association and the exchange company and those having solely a contractual relationship between the exchange company and owners directly;

(c) The percentage of confirmed exchanges, which shall be the number of exchanges confirmed by the exchange company divided by the number of exchanges properly applied for, together with a complete and accurate statement of the criteria used to determine whether an exchange request was properly applied for;

(d) The number of time-shares for which the exchange company has an outstanding obligation to provide an exchange to an owner who relinquished a time-share during the year in exchange for a time-share in any future year;

(e) The number of exchanges confirmed by the exchange company during the year;

(18) A statement in boldfaced type to the effect that the percentage described in paragraph (c) of subdivision (17) of this subsection is a summary of the exchange requests entered with the exchange company in the period reported and that the percentage does not indicate a purchaser's/owner's probabilities of being confirmed to any specific choice or range of choices, since availability at individual locations may vary.

2. The information required by subsection 1 of this section shall be accurate as of a date which is no more than thirty days prior to the date on which the information is delivered to the purchaser; except that, the information required by subdivisions (2), (3), (13), (14), (15) and (17) of subsection 1 of this section shall be accurate as of December thirty-first of the preceding year if the information is delivered between July first and December thirty-first of any year; information delivered between January first and June thirtieth of any year shall be accurate as of December thirty-first of the year prior to the preceding year. At no time shall such information be accurate as of a date which is more than eighteen months prior to the date of delivery. All references in this subsection to the word "year" shall mean calendar year.

3. In the event an exchange company offers an exchange program directly to the purchaser or owner, the exchange company shall deliver to each purchaser or owner, simultaneously with such offering and prior to the execution of any contract between the purchaser or owner and the exchange company, the information set forth in subsection 1 of this section. The requirements of this subsection shall not apply to any renewal of a contract between an owner and an exchange company.

4. Each exchange company shall include the statement set forth in subdivision (18) of subsection 1 of this section on all promotional brochures, pamphlets, advertisements, or other materials disseminated by the exchange company which also contain the percentage of confirmed exchanges described in paragraph (c) of subdivision (17) of subsection 1 of this section.

5. An exchange company shall, on or before July first of each year, file with the attorney general and secretary of the association for the time-share plan in which the time-shares are offered or disposed, the information required by subsection 1 of this section with respect to the preceding year. If the attorney general determines that any of the information supplied fails to meet the requirements of this section, the attorney general may undertake enforcement action against the exchange company in accordance with the provisions of sections 407.600 to 407.630. No developer shall have any liability arising out of the use, delivery or publication by the developer of written information provided to it by the exchange company pursuant to this section. Except for written information provided to the developer by the exchange company, no exchange company shall have any liability with respect to any representation made by the developer relating to the exchange program or exchange company; or the use, delivery or publication by the developer of any information relating to the exchange program or exchange company. The failure of the exchange company to observe the requirements of this section, or the use by it of any unfair or deceptive act or practice in connection with the operation of the exchange program, shall be a violation of sections 407.600 to 407.630.

6. The offering of an exchange program in this state in conjunction with the offer or sale of time-shares in this state shall not constitute a security under the laws of this state.

(L. 1985 H.B. 96, et al.)

Effective 5-31-85



Violation of regulations--penalty.

407.630. 1. A time-share plan or time-share property is merchandise under the provisions of this chapter and the sale or offering for sale of such plans or property shall be subject to the provisions of sections 407.010 to 407.140, unless otherwise specifically provided in sections 407.600 to 407.630.

2. Violation of any provision of sections 407.600 to 407.620 is a class A misdemeanor.

(L. 1985 H.B. 96, et al.)

Effective 5-31-85



Definitions.

407.635. As used in sections 407.635 to 407.644, the following words and phrases shall mean:

(1) "Buyer", an individual who is solicited to purchase or who purchases the services of a credit services organization;

(2) "Consumer reporting agency" has the meaning assigned by section 603(f) of the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681a(f);

(3) "Extension of credit", the right to defer payment of debt or to incur debt and defer its payment offered or granted primarily for personal family or household purposes.

(L. 1991 S.B. 112 1)



Credit service organization--exemptions.

407.637. 1. A credit services organization is a person who, with respect to the extension of credit by others and in return for the payment of money or other valuable consideration, provides or represents that the person can or will provide any of the following services:

(1) Improving the buyer's credit record, history or rating;

(2) Obtaining an extension of credit for a buyer; or

(3) Providing advice or assistance to a buyer with regard to subdivision (1) or (2) of this subsection.

2. The following are exempt from the provisions of sections 407.635 to 407.644:

(1) A person authorized to make loans or extensions of credit under the laws of this state or the United States who is subject to regulation and supervision by this state or the United States, or a lender approved by the United States Secretary of Housing and Urban Development for participation in a mortgage insurance program under the federal National Housing Act, 12 U.S.C. Section 1701, et seq.;

(2) A bank or savings and loan association whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation, or a subsidiary of such a bank or savings and loan association;

(3) A credit union doing business in this state;

(4) A nonprofit organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code;

(5) A person licensed as a real estate broker or salesperson pursuant to chapter 339 acting within the course and scope of that license;

(6) A person licensed to practice law in this state acting within the course and scope of the person's practice as an attorney;

(7) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;

(8) A consumer reporting agency;

(9) A person whose primary business is making loans secured by liens on real property;

(10) A person who is licensed as a certified public accountant pursuant to chapter 326 acting within the course and scope of that license; or an individual who is enrolled to practice before the Internal Revenue Service; or an accountant, who is accredited by the Accreditation Council for Accountancy.

(L. 1991 S.B. 112 2)



Prohibited activities.

407.638. A credit services organization, a salesperson, agent or representative of a credit services organization, or an independent contractor who sells or attempts to sell the services of a credit services organization may not:

(1) Charge a buyer or receive from a buyer money or other valuable consideration before completing performance of all services the credit services organization has agreed to perform for the buyer, unless the credit services organization has obtained in accordance with section 407.639 a surety bond in the amount required by subsection 4 of section 407.639, issued by a surety company authorized to do business in this state, or has established and maintained a surety account at a federally insured bank or savings and loan association located in this state in which the amount required by subsection 5 of section 407.639 is held in trust as required by section 407.639;

(2) Charge a buyer or receive from a buyer money or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer if the credit that is or will be extended to the buyer is substantially the same as that available to the general public;

(3) Make or use a false or misleading representation in the offer or sale of the services of a credit services organization, including:

(a) Guaranteeing to "erase bad credit" or words to that effect unless the representation clearly discloses that this can be done only if the credit history is inaccurate or obsolete; and

(b) Guaranteeing an extension of credit regardless of the person's previous credit problem or credit history unless the representation clearly discloses the eligibility requirements for obtaining an extension of credit;

(4) Engage, directly or indirectly, in a fraudulent or deceptive act, practice or course of business in connection with the offer or sale of the services of a credit services organization;

(5) Make, or advise a buyer to make, a statement with respect to a buyer's credit worthiness, credit standing, or credit capacity that is false or misleading or that should be known by the exercise of reasonable care to be false or misleading, to a consumer reporting agency or to a person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit;

(6) Advertise or cause to be advertised, in any manner whatsoever, the services of a credit services organization without filing a registration statement with the director of finance, unless otherwise provided by this chapter.

(L. 1991 S.B. 112 3)



Copy of bond to be filed with director of finance--purpose of bond--amount of bond--statement by director of finance.

407.639. 1. This section applies to a credit services organization required by subdivision (1) of section 407.638 to obtain a surety bond or establish a surety account.

2. If a bond is obtained, a copy of it shall be filed with the director of finance. If a surety account is established, notification of the depository, the trustee and the account number shall be filed with the director of finance.

3. The bond or surety account required shall be in favor of the state for the benefit of any person who is damaged by any violation of sections 407.635 to 407.644. The bond or surety account shall also be in favor of any person damaged by such a violation.

4. Any person claiming against the bond or surety account for a violation of sections 407.635 to 407.644 may maintain an action at law against the credit services organization and against the surety or trustee. The surety or trustee shall be liable only for damages awarded under subdivision (1) of subsection 1 of section 407.644 and not the punitive damages permitted under that section. The aggregate liability of the surety or trustee to all persons damaged by a credit services organization's violation of this chapter may not exceed the amount of the surety account or bond.

5. The bond or the surety account shall be in the amount of ten thousand dollars.

6. A depository holding money in a surety account under sections 407.635 to 407.644 shall not convey money in the account to the credit services organization that established the account or a representative of the credit services organization unless the credit services organization or representative presents a statement issued by the director of finance indicating that section 407.640* has been satisfied in relation to the credit services organization. The director of finance may conduct investigations and require submission of information as is necessary to enforce this section.

7. The bond or surety account shall be maintained until two years after the date that the credit services organization ceases operations.

(L. 1991 S.B. 112 4)

*Original rolls contain reference to "subsection 6 of section 5" (407.640), an apparent typographical error since section 407.640 does not contain a subsection 6. All of section 407.640 seems germane to the original reference.



Registration statements, filing, contents.

407.640. 1. A credit services organization shall file a registration statement with the director of finance before conducting business in this state. The registration statement must contain:

(1) The name and address of the credit services organization; and

(2) The name and address of any person who directly or indirectly owns or controls ten percent or more of the outstanding shares of stock in the credit services organization.

2. The registration statement must also contain either:

(1) A full and complete disclosure of any litigation or unresolved complaint filed by or with a governmental authority of this state relating to the operation of the credit services organization; or

(2) A notarized statement that states that there has been no litigation or unresolved complaint filed by or with a governmental authority of this state relating to the operation of the credit services organization.

3. The credit services organization shall update the statement not later than the ninetieth day after the date on which a change in the information required in the statement occurs.

4. Each credit services organization registering under this section shall maintain a copy of the registration statement in the office of the credit services organization. The credit services organization shall allow a buyer to inspect the registration statement on request.

5. The director of finance may charge each credit services organization that files a registration statement with the director of finance a reasonable fee not to exceed one hundred dollars to cover the cost of filing. The director of finance may not require a credit services organization to provide information other than that provided in the registration statement as part of the registration process.

(L. 1991 S.B. 112 5)



Contract, writing, contents.

407.641. 1. Before executing a contract or agreement with a buyer or receiving money or other valuable consideration, a credit services organization shall provide the buyer with a statement in writing, containing:

(1) A complete and detailed description of the services to be performed by the credit services organization for the buyer and the total cost of the services;

(2) A statement explaining the buyer's right to proceed against the bond or surety account required by subdivision (1) of section 407.638;

(3) The name and address of the surety company that issued the bond, or the name and address of the depository and the trustee, and the account number of the surety account;

(4) A complete and accurate statement of the buyer's right to review any file on the buyer maintained by a consumer reporting agency, as provided by the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681, et seq.;

(5) A statement that the buyer's file is available for review at no charge on request made to the consumer reporting agency within thirty days after the date of receipt of notice that credit has been denied, and that the buyer's file is available for a minimal charge at any other time;

(6) A complete and accurate statement of the buyer's right to dispute directly with the consumer reporting agency the completeness or accuracy of any item contained in a file on the buyer maintained by that consumer reporting agency;

(7) A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency;

(8) A complete and accurate statement of when consumer information becomes obsolete and of when consumer reporting agencies are prevented from issuing reports containing obsolete information; and

(9) A complete and accurate statement of the availability of nonprofit credit counseling services.

2. The credit services organization shall maintain on file, for a period of two years after the date the statement is provided, an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.

(L. 1991 S.B. 112 6)



Contract requirements, cancellation clause.

407.642. 1. Each contract between the buyer and a credit services organization for the purchase of the services of the credit services organization must be in writing, dated, signed by the buyer and must include:

(1) A statement in type that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous, in immediate proximity to the space reserved for the signature of the buyer, as follows: "YOU, THE BUYER, MAY CANCEL THIS CONTRACT AT ANY TIME BEFORE MIDNIGHT OF THE THIRD DAY AFTER THE DATE OF THE TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT";

(2) The terms and conditions of payment, including the total of all payments to be made by the buyer, whether to the credit services organization or to another person;

(3) A full and detailed description of the services to be performed by the credit services organization for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated length of time, not to exceed one hundred eighty days, for performing the services; and

(4) The address of the credit services organization's principal place of business and the name and address of its registered agent in the state authorized to receive service of process.

2. The contract must have attached two easily detachable copies of a notice of cancellation. The notice must be in boldfaced type and in the following form:

"NOTICE OF CANCELLATION YOU MAY CANCEL THIS CONTRACT, WITHOUT ANY PENALTY OR

OBLIGATION, WITHIN THREE DAYS AFTER THE DATE THE CONTRACT IS SIGNED. IF YOU CANCEL, ANY PAYMENT MADE BY YOU UNDER THIS CONTRACT WILL BE RETURNED WITHIN TEN DAYS AFTER THE DATE OF RECEIPT BY THE SELLER OF YOUR CANCELLATION NOTICE. TO CANCEL THIS CONTRACT, MAIL OR DELIVER A SIGNED DATED COPY OF THIS CANCELLATION NOTICE, OR OTHER WRITTEN NOTICE TO:

(NAME OF SELLER) AT (ADDRESS OF SELLER) (PLACE OF

BUSINESS) NOT LATER THAN MIDNIGHT (DATE). I HEREBY CANCEL THIS TRANSACTION.

DATE: ..............................

BUYER'S SIGNATURE: ......................................."

3. The credit services organization shall give to the buyer a copy of the completed contract and all other documents the credit services organization requires the buyer to sign at the time they are signed.

4. The breach by a credit services organization of a contract under this section, or of any obligation arising from a contract under this section, is a violation of sections 407.635 to 407.644.

(L. 1991 S.B. 112 7)



Waiver of buyer's rights void.

407.643. 1. A credit services organization may not attempt to cause a buyer to waive a right under sections 407.635 to 407.644.

2. A waiver by a buyer of any part of sections 407.635 to 407.644 is void.

(L. 1991 S.B. 112 8)



Actions--damages--penalties.

407.644. 1. (1) A buyer injured by a violation of sections 407.635 to 407.644 may bring an action for recovery of damages. The damages awarded may not be less than the amount paid by the buyer to the credit services organization, plus reasonable attorney's fees and court costs.

(2) The buyer may also be awarded punitive damages.

2. The attorney general or a buyer may bring an action in a court of competent jurisdiction to enjoin a violation of sections 407.635 to 407.644.

3. A violation of sections 407.635 to 407.644 is an unlawful practice pursuant to sections 407.010 to 407.130, and the violator shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.130.

4. An action may not be brought under subsection 1 or 3 of this section after four years after the date of the execution of the contract for services to which the action relates.

5. A person who violates any provision of sections 407.635 to 407.644 is guilty of a class B misdemeanor.

6. In an action under this section the burden of proving an exemption under section 407.637 is on the person claiming the exemption.

7. The remedies provided by sections 407.635 to 407.644 are in addition to other remedies provided by law.

(L. 1991 S.B. 112 9 to 15)



Citation of law.

407.660. Sections 407.660 to 407.665 shall be known and may be cited as the "Rental-Purchase Agreement Law".

(L. 1988 H.B. 988)



Definitions.

407.661. As used in sections 407.660 to 407.665 the following terms shall mean:

(1) "Advertisement", the attempt by publication, dissemination, solicitation, circulation, or any other means to induce, directly or indirectly, any person to enter into any obligation or acquire any title or interest in any merchandise, or any commercial message in any medium that directly or indirectly promotes or assists a rental-purchase agreement;

(2) "Cash price", the price for which the merchant would have sold the merchandise to the consumer for cash on the date of the rental-purchase agreement;

(3) "Consumer", an individual who leases personal property under a rental-purchase agreement;

(4) "Merchandise", the personal property that is the subject of a rental-purchase agreement;

(5) "Merchant", a person who, in the ordinary course of business, regularly leases, offers to lease, or arranges for the leasing of merchandise under a rental-purchase agreement;

(6) "Rental-purchase agreement", an agreement between a merchant and a consumer for the use of merchandise by the consumer for personal, family, or household purposes, for an initial period of four months or less that is automatically renewable with each payment after the initial period, and that permits the consumer to become the owner of the merchandise. A rental-purchase agreement shall not be construed to be nor be governed by any of the following:

(a) A lease or agreement which constitutes a credit sale as defined in 12 CFR 226.2(a)(16) and section 1602(g) of the Truth-in-Lending Act, 15 U.S.C. 1601 et seq.;

(b) A lease which constitutes a consumer lease as defined in 12 CFR 213.2(a)(6);

(c) Any lease for agricultural, business, or commercial purposes;

(d) Any lease made to an organization;

(e) A lease or agreement which constitutes a retail time contract or retail time transaction as defined in subdivisions (14) and (15) of section 408.250;

(f) A security interest as defined in subdivision (37) of section 400.1-201; or

(g) A home solicitation sale as that term is defined in section 407.700;

(7) "Period", a day, week, month, or other subdivision of a year.

(L. 1988 H.B. 988)



Rental-purchase agreements, in writing--prohibited provisions--required provisions.

407.662. 1. A rental-purchase agreement shall be in the form of a written statement and shall constitute the entire agreement between the merchant and consumer. All amounts shall be stated in numerical figures.

2. A rental-purchase agreement may not contain a provision:

(1) Requiring a confession of judgment;

(2) Authorizing a merchant or an agent of the merchant to commit a breach of the peace in the repossession of merchandise;

(3) Waiving a defense, counterclaim, or right the consumer may have against the merchant or an agent of the merchant;

(4) Requiring the purchase of insurance from the merchant to cover the merchandise;

(5) Requiring the payment of a late charge greater than five dollars for each payment in default;

(6) Requiring a payment at the end of the scheduled rental-purchase term in excess of, or in addition to, a regular periodic payment in order to acquire ownership of the merchandise; or

(7) Requiring the consumer to pay rental payments greater than the total amount to be paid to acquire ownership.

3. A rental-purchase agreement must disclose in 10-point boldface type:

(1) Whether the merchandise is new or used;

(2) The cash price of the merchandise;

(3) The total amount and number of payments necessary to acquire ownership of the merchandise;

(4) The amount and timing of payments;

(5) That the consumer does not acquire ownership rights in the merchandise until all payments have been made under the ownership terms of the agreement;

(6) The amount and purpose of any payment, charge, or fee in addition to the regular periodic payments;

(7) Whether the consumer is liable for loss or damage to the merchandise, provided that the consumer's liability for loss or damage to the merchandise shall be no greater than the disclosed cash price plus any costs allowed by law;

(8) A statement of the conditions under which the lessee may terminate the lease;

(9) A statement of whether any part of a manufacturer's warranty continues to cover the rental property at the time the consumer assumes ownership of the property;

(10) Notice of the right to reinstate an agreement; and

(11) A statement of the reinstatement rights provided for in section 407.664.

(L. 1988 H.B. 988)



Advertisements, requirements.

407.663. An advertisement for a rental-purchase agreement that refers to or states the amount of the payment or the right to acquire ownership of any one particular item under the agreement must clearly and conspicuously state:

(1) That the transaction advertised is a rental-purchase agreement;

(2) The total amount and number of payments necessary to acquire ownership of the merchandise; and

(3) That the consumer does not acquire ownership rights in the merchandise until all payments have been made under the terms of the agreement.

(L. 1988 H.B. 988)



Reinstatement of agreement, when, conditions.

407.664. 1. A consumer who fails to make timely rental payments has the right to reinstate the original rental-purchase agreement without losing any rights or options previously acquired under the rental-purchase agreement within three rental terms after the expiration of the last rental term for which the consumer made a timely payment if the consumer surrenders the rental property to the merchant when the merchant or its agent requests him to surrender the rental property.

2. Before reinstating a rental-purchase agreement, a merchant may require a consumer to pay any unpaid rental payments, delinquency charges, a reasonable reinstatement fee of not more than five dollars, and a delivery charge if redelivery of the rental property is necessary.

3. If reinstatement occurs pursuant to this section, the merchant shall provide the consumer with either the same property leased by the consumer prior to reinstatement or substitute property that is of comparable quality and condition.

(L. 1988 H.B. 988)



Violations, penalties--correction of violation--penalty not a bar to civil action.

407.665. 1. A violation of any provision or requirement of sections 407.660 to 407.664 shall be deemed a violation of section 407.020 and any person violating such provisions shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.145. The attorney general shall have all powers, rights and duties regarding violations of sections 407.660 to 407.665 as are provided in sections 407.010 to 407.145.

2. Notwithstanding subsection 1 of this section, any failure to comply with any provision or requirement of sections 407.660 to 407.665 may be corrected within ten days after the date of execution of the rental-purchase agreement by the merchant, and, if so corrected, neither the merchant or any holder of the executed rental-purchase agreement is subjected to any penalty under the provisions of this chapter.

3. The provisions of sections 407.660 to 407.665 are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with other applicable provisions of law nor shall such provisions bar any civil claim against any person who has acquired any moneys or property, real or personal, by means of any practice declared unlawful by any provision of sections 407.660 to 407.665.

(L. 1988 H.B. 988)



Citation of law.

407.670. Sections 407.670 to 407.679 shall be known and may be cited as the "Buyers Club Law".

(L. 1988 H.B. 988)



Definitions.

407.671. As used in sections 407.670 to 407.679, the following terms shall mean:

(1) "Business day", any day other than a Saturday, Sunday, or legal holiday;

(2) "Buying service", "buying club", or "club", any person, corporation, partnership, unincorporated association or other business enterprise operating for profit within the state of Missouri, the primary purpose of which is to provide benefits to members from the cooperative purchase of services or merchandise;

(3) "Buyer" or "member", any status by which any natural person is entitled to any of the benefits of a discount buying organization;

(4) "Contract", any written agreement by which one becomes a member of a club;

(5) "Prepayment", any payment greater than fifty dollars for service, merchandise or membership made before any service or merchandise is rendered. Money received by a club from a financial institution upon assignment of a contract shall be considered prepayment when and to the extent the member is required to make prepayments to the financial institution pursuant to the contract.

(L. 1988 H.B. 988)



Cancellation of membership.

407.672. 1. Any person who has elected to become a member of a club may cancel such membership by giving written notice any time before midnight of the third business day following the date on which membership was attained. Such cancellation shall be without liability on the part of the member and shall entitle the member to a refund of the entire consideration paid for the contract.

2. Notice of cancellation shall be in writing and delivered personally or by mail. If given by mail, the notice is effective upon deposit in a mailbox, properly addressed and postage paid. Notice of cancellation need not take a particular form and is sufficient if it indicates, by any form of written expression, the intention of the member not to be bound by the contract. If delivered personally, the notice is to be accepted by any agent or employee of the club, and a receipt for the notice must be given by that agent or employee to the person cancelling.

3. The entitled refund shall be delivered to the member within fourteen days after notice of cancellation is given.

4. Rights of cancellation may not be waived or otherwise surrendered.

5. Cancellation shall not relieve the member from paying for any merchandise or services received prior to the date of cancellation.

(L. 1988 H.B. 988)



Contract, requirements, right to cancel.

407.673. 1. A fully completed copy of every contract shall be delivered to the member at the time the contract is signed. Every contract shall constitute the entire agreement between seller and member, shall be in writing, shall be signed by the member, shall designate the date on which the member signed the contract and shall state, clearly and conspicuously, in boldface type of minimum size of 14-points, in immediate proximity to the space reserved for the signature of the buyer, the following: MEMBER'S RIGHT TO CANCEL If you wish to cancel this contract, you may cancel by delivering or mailing a written notice to the company. Certified mail would provide greater protection than first-class mail, but is not necessary. If you deliver the notice personally, you are entitled to a receipt. Your notice must make known that you do not wish to be bound by the contract. If the notice is delivered or mailed before midnight of the third business day after you sign this contract, you are entitled to a refund of the entire consideration paid for the contract. The notice must be delivered or mailed to ................................................................. ........................................... . (Insert name and mailing address of company).

If you cancel, the club is required to return, within fourteen days of the date on which you give notice of cancellation, any payments you have made.

2. Until the buying club has complied with this section, the member may cancel the contract by notifying the buying club, in any manner and by any means, of his intention to cancel and is then entitled to a refund of the entire consideration paid for the contract.

(L. 1988 H.B. 988)



Delivery date of goods, exception--savings claims, requirements--contracts not in compliance, unenforceable.

407.674. 1. Every contract shall provide that if any goods, except furniture or custom manufactured goods, ordered by the member from the buying club, are not delivered to the member or available for pick-up by the member at the location where the order was placed within six weeks from the date the member placed an order for such goods, then any payment by the member for such goods in advance of delivery shall, upon the member's request, be fully refunded, unless a predetermined delivery date has been furnished to the member in writing at the time he or she ordered such goods and the goods are delivered to the member or available for pick-up by that date. Every contract shall disclose that delivery dates for furniture or custom manufactured goods cannot be predicted, if such is the case.

2. Every contract shall provide that all savings claims made by the buying club are based on price comparisons with retailers doing business in the trade area who sell or offer for sale the same or comparable goods and at the prices the goods are actually sold or offered for sale by such retailers.

3. Any contract which does not comply with subsections 1 and 2 of this section shall be void and unenforceable.

(L. 1988 H.B. 988)



Duration of contract, renewal, terms and limitations.

407.675. No contract shall be valid for a term longer than twenty-four months from the date upon which the contract is signed. However, a club may allow a member to convert his contract into a contract for a period longer than twenty-four months after the member has been a member of the club for a period of at least six months. The duration of the contract shall be clearly and conspicuously disclosed in the contract in boldface type of a minimum size of 14-points. No contract shall contain an automatic renewal clause; provided, however, that such an agreement may provide for the buyer to exercise a renewal.

(L. 1988 H.B. 988)



Law not applicable, when.

407.676. Sections 407.670 to 407.679 shall not apply to:

(1) Any buyers club in which the total consideration paid by each buyer in any manner whatsoever for discount buying services does not exceed fifty dollars over the expected life of the contract;

(2) Any buyers club in which persons receive discount buyer services incidentally as part of a package of services provided to or available to such individual on account of his membership in such organization, which is not organized for the profit of any person or corporation or which does not have as one of its primary purposes or businesses the provisions of discount buying services; and

(3) Any buyers club which files with the office of the attorney general a declaration, executed under penalty of perjury by the owner or manager of such club, stating that the club does not require, or in the ordinary course of business, receive prepayment.

(L. 1988 H.B. 988)



Unlawful practices.

407.677. 1. It shall be a violation of section 407.020 for any buyers club to fail to disclose to a prospective member in writing, prior to the sale of any contract for discount buying services:

(1) That goods or services can only be bought through catalogs with no opportunity to inspect samples;

(2) The buyers club's policies regarding warranties or guarantees on goods ordered, return of ordered goods by buyers, procedures for cancellation of merchandise orders by the buyer, and refunds of deposits for the cancellation of orders;

(3) Any incidental charges, such as estimated freight costs, handling fees, credit life or disability insurance, suppliers' and buyers clubs' markup, and other costs incidental to the purchase of goods through the buyers club and which are to be paid by the buyer;

(4) A list of the categories of merchandise which are available to the buyers from cooperating suppliers. If the list includes savings claims based on price comparisons, the savings claims must be based on price comparisons with retailers doing business in the trade who sell or offer for sale the same or comparable goods and at the prices the goods are sold or offered for sale by such retailers;

(5) The percentage of the purchase price required as a down payment on merchandise orders of any nature. This subdivision shall apply in all cases where rebates are offered, regardless of whether such promised rebates are contingent upon the seller's ability to enroll the referred persons into the buyers club.

2. In addition, it shall be a violation of section 407.020 for a buying club to:

(1) Represent that it is affiliated with any other buyers club organization or showroom unless an affiliation in fact exists and unless the prospective buyer would be legally entitled to services from the allegedly affiliated organization as a result of being a buyer of the buyers club. If such an affiliation is claimed by the representative of the buyers club, written proof of such a binding legal right must be made available to the prospective buyer, including a description of the services available from the affiliated club, before the signing of any contract for discount buying services or application;

(2) Represent that the prospective buyer will be entitled to a particular benefit unless that benefit is currently available from the buyers club on a regular basis;

(3) Offer any gifts or consideration of any nature to a prospective buyer as a solicitation for said persons to attend a buyers club sales presentation or to sign a membership application or a contract for discount buying services where the club fails to honor or deliver the gift or consideration in accordance with the term of its promise;

(4) Represent or suggest in any manner that it offers its buyers the lowest prices, excluding freight and service charges, available on all categories of merchandise handled by the club, unless such is true;

(5) Represent that merchandise is available to its buyer from any particular supplier unless such is true at the time the representation is made. Reference to unavailable suppliers or manufacturers may be made only for purposes of allowing prospective buyers to compare merchandise costs against those manufacturers which are available through the club. No buyers club may represent to a prospective buyer, unless it is true, that the club can purchase any item of merchandise at supplier's cost if the buyer provides the club with the necessary model number for the item.

(L. 1988 H.B. 988)



Waivers, unenforceable.

407.678. Any waiver by the member of the provisions of sections 407.670 to 407.679 shall be deemed contrary to public policy and shall be void and unenforceable.

(L. 1988 H.B. 988)



Violations, penalty--penalty not a bar to civil action.

407.679. 1. A violation of any provisions or requirement of sections 407.670 to 407.678 shall be deemed a violation of section 407.020 and any person violating such provisions shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.145. The attorney general shall have all powers, rights and duties regarding violations of sections 407.670 to 407.679 as are provided in sections 407.010 to 407.145.

2. The provisions of sections 407.670 to 407.679 are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with all other applicable provisions of law nor shall such provisions bar any civil claim against any person who has acquired any moneys or property, real or personal, by means of any practice declared unlawful by any provision of sections 407.670 to 407.679.

(L. 1988 H.B. 988)



Home solicitation sale defined.

407.700. "Home solicitation sale" means a consumer credit sale of goods, or services, except the sale of real property or interest therein, or the sale of personal property which is incident to the sale of real property or interest therein, in which the seller or a person acting for him engages in a personal solicitation of the sale at a residence of the buyer and the buyer's agreement or offer to purchase is there given to the seller or a person acting for him. It does not include a sale made pursuant to a preexisting revolving charge account, or a sale made pursuant to prior negotiations between both parties present at a business establishment at a fixed location where goods or services are offered or exhibited for sale.

(L. 1973 H.B. 61 & 367 1)



Cancellation, notice of, how given--cancellation prohibited, when--business day defined.

407.705. 1. Except as provided in subsection 3 of this section, in addition to any right otherwise to revoke an offer, the buyer has the right to cancel a home solicitation sale until midnight of the third business day after the day on which the buyer signs an agreement or offer to purchase which complies with sections 407.700 to 407.720. For the purposes of this section, the term "business day" shall mean any day except Saturday, Sunday, and legal holidays.

2. Cancellation occurs when the buyer gives written notice of cancellation to the seller at the address stated in the agreement or offer to purchase. Notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid. Notice of cancellation given by the buyer need not take a particular form and is sufficient if it indicates by any form of written expression the intention of the buyer not to be bound by the home solicitation sale.

3. The buyer may not cancel a home solicitation sale if:

(1) The buyer requests the seller to provide goods or services without delay because of an emergency; and

(2) The seller in good faith makes a substantial beginning of performance of the contract before the buyer gives notice of cancellation; and

(3) In the case of goods, the goods cannot be returned to the seller in substantially as good condition as when received by the buyer.

(L. 1973 H.B. 61 & 367 2, A.L. 1986 S.B. 685)

Effective 5-1-86



Agreement of sale, required statement, exception.

407.710. 1. In a home solicitation sale, unless the buyer requests the seller to provide goods or services without delay in an emergency, the seller must present to the buyer and obtain his signature to a written agreement or offer to purchase which designates as the date of the transaction the date on which the buyer actually signs and contains a statement of the buyer's rights which complies with subsection 2.

2. The statement must

(1) Contain in 10-point boldface type the following information and statements; "NOTICE OF CANCELLATION" ( ................................................................. .......................................... )

Date of transaction must be filled in at time of sale by seller; and

If this agreement was solicited at your residence and you do not want the goods or services, you may cancel, without further obligation, this agreement by mailing a notice to the seller at the address as shown below, within 3 business days following the above date. You shall return the goods to seller in substantially the same condition as when you obtained them. Seller will then cancel all contracts and negotiable instruments executed by you and return any property given by you to seller within 10 days from date of transaction. If seller does not pick up the purchased goods within 20 days from date of your cancellation, you may retain or dispose of the goods without any further obligation. The notice must be mailed to: (..........) Name and mailing address of seller must be filled in at time of sale.

(2) A home solicitation sales contract which contains the notice of cancellation forms and content provided in the Federal Trade Commission's trade regulation rule providing a cooling-off period for door-to-door sales shall be deemed as complying with the requirements of subsection 2 herein so long as the Federal Trade Commission language provides at least equal information to the consumer concerning his right to cancel as is required by sections 407.700 to 407.720.

3. Until the seller has complied with this section the buyer may cancel the home solicitation sale by notifying the seller in any manner and by any means of his intention to cancel.

(L. 1973 H.B. 61 & 367 3)



Duties of seller after cancellation.

407.715. 1. Except as provided in this section, within ten days after a home solicitation sale has been cancelled the seller must tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness with the word "cancelled" stamped conspicuously on the face.

2. If the down payment includes goods traded in, the goods must be tendered in substantially as good condition as when received by the seller. If the seller fails to tender the goods as provided by this section, the buyer may elect to recover an amount equal to the trade-in allowance stated in the agreement.

3. Until the seller has complied with the obligations imposed by this section the buyer may retain possession of goods delivered to him by the seller and has a lien on the goods in his possession or control for any recovery to which he is entitled.

(L. 1973 H.B. 61 & 367 4)



Duties of seller after cancellation--lien of buyer, when.

407.720. 1. Except as provided by the provision of section 407.715, within a reasonable time after a home solicitation sale has been cancelled the buyer upon demand must tender to the seller any goods delivered by the seller pursuant to the sale but he is not obligated to tender at any place other than his residence. If the seller fails to demand possession of goods within a reasonable time after cancellation the goods become the property of the buyer without obligation to pay for them. For the purpose of this section, twenty days is presumed to be a reasonable time.

2. The buyer has a duty to take reasonable care of the goods in his possession before cancellation or revocation and for a reasonable time thereafter, during which time the goods are otherwise at the seller's risk.

3. If the seller has performed any services pursuant to a home solicitation sale prior to its cancellation, the seller is entitled to no compensation.

(L. 1973 H.B. 61 & 367 5)



Work and services for insured persons, contractors not to induce sales--cancellation of contracts, requirements, contractor duties--violations, penalty.

407.725. 1. As used in this section, the following terms mean:

(1) "Residential contractor", a person or entity in the business of contracting or offering to contract with an owner or possessor of residential real estate to repair or replace roof systems or perform any other exterior repair, replacement, construction, or reconstruction work on residential real estate;

(2) "Residential real estate", a new or existing building constructed for habitation by one to four families, including detached garages;

(3) "Roof system", includes roof coverings, roof sheathing, roof weatherproofing, and insulation.

2. A residential contractor shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services. As used in this section, a promise to pay or rebate includes granting any allowance or offering any discount against the fees to be charged or paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason.

3. A person who has entered into a written contract with a residential contractor to provide goods or services to be paid under a property and casualty insurance policy may cancel the contract prior to midnight on the fifth business day after the insured party has received written notice from the insurer that all or any part of the claim or contract is not a covered loss under the insurance policy. Cancellation shall be evidenced by the insured party giving written notice of cancellation to the residential contractor at the address stated in the contract. Notice of cancellation, if given by mail, shall be effective upon deposit into the United States mail, postage prepaid and properly addressed to the residential contractor. Notice of cancellation need not take a particular form and shall be sufficient if it indicates, by any form of written expression, the intention of the insured party not to be bound by the contract.

4. Before entering a contract referred to in subsection 3 of this section, the residential contractor shall:

(1) Furnish the insured party a statement in boldface type of a minimum size of ten points, in substantially the following form:

You may cancel this contract at any time before midnight on the fifth business day after you have received written notification from your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy. See attached notice of cancellation form for an explanation of this right.; and

(2) Furnish each insured a fully completed form in duplicate, captioned "NOTICE OF CANCELLATION", which shall be attached to the contract but easily detachable, and which shall contain, in boldface type of a minimum size of ten points, the following statement:

NOTICE OF CANCELLATION If you are notified by your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy, you may cancel the contract by mailing or delivering a signed and dated copy of this cancellation notice or any other written notice to (name of contractor) at (address of contractor's place of business) at any time prior to midnight on the fifth business day after you have received such notice from your insurer. If you cancel, any payments made by you under the contract, except for certain emergency work already performed by the contractor, will be returned to you within ten business days following receipt by the contractor of your cancellation notice.

I HEREBY CANCEL THIS TRANSACTION

____________________________

(date) ____________________________

(insured's signature).

5. Within ten days after a contract referred to in subsection 3 of this section has been cancelled, the contractor shall tender to the owner or possessor of residential real estate any payments, partial payments, or deposits made and any note or other evidence of indebtedness. If, however, the contractor has performed any emergency services, acknowledged by the insured in writing to be necessary to prevent damage to the premises, the contractor shall be entitled to the reasonable value of such services. Any provision in a contract referred to in subsection 3 of this section that requires the payment of any fee for anything except emergency services shall not be enforceable against the owner or possessor of residential real estate who has cancelled a contract pursuant to this section.

6. A residential contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of roof systems, or the performance of any other exterior repair, replacement, construction, or reconstruction work.

7. Any violation of this section by a residential contractor shall be considered an unfair practice pursuant to the Missouri merchandising practices act as codified in this chapter.

(L. 2011 S.B. 101)



Definitions.

407.730. As used in sections 407.730 to 407.748, the following terms mean:

(1) "Advertisement", oral, written, graphic or pictorial statements made in the course of solicitation of business including, without limitation, any statement or representation made in a newspaper, magazine, the car rental company's proprietary website, or other publication, or contained in any notice, sign, poster, display, circular, pamphlet, or letter which may collectively be called "print advertisements", or on radio or television, which may be referred to as "broadcast commercials";

(2) "Authorized driver":

(a) The renter;

(b) The renter's spouse if the spouse is a licensed driver and satisfies the car rental company's minimum age requirement;

(c) The renter's employee or co-worker if they are engaged in business activity with the person to whom the vehicle is rented, are licensed drivers, and satisfy the rental company's minimum age requirements;

(d) Any person who operates the vehicle during an emergency situation; and

(e) Any person expressly listed by the car rental company on the renter's contract as an authorized driver;

(3) "Blackout date", any date on which an advertised price is totally unavailable to the public;

(4) "Car rental company", any person or entity in the business of renting private passenger vehicles to the public;

(5) "Car rental insurance", products and services that are offered in connection with and incidental to the rental of a motor vehicle under subdivision (10) of subsection 1 of section 375.786. This definition of optional car rental insurance or any other definition of insurance shall not include collision damage waiver;

(6) "Clear and conspicuous", that the statement, representation or term being disclosed is of such size, color contrast, and audibility and is so presented as to be readily noticed and understood by the person to whom it is being disclosed. All language and terms should be used in accordance with their common or ordinary usage and meaning;

(7) "Collision damage waiver", any product a consumer purchases from a car rental company in order to waive all or part of his responsibility for damages, or loss of, a rental vehicle;

(8) "Limited time availability", that the advertised rental price is only available for a specific period of time or that the price is not available during certain blackout periods;

(9) "Mandatory charge", any charge, fee, or surcharge consumers must generally pay in order to obtain or operate a rental vehicle;

(10) "Master rental agreement", those documents used by a car rental company for expedited service to members in a program sponsored by the car rental company in which renters establish a profile and select preferences for rental needs which establish the terms and conditions governing the use of a rental car rented by a car rental company by a participant in a master rental agreement;

(11) "Material restriction", a restriction, limitation or other requirement which significantly affects the price of, use of, or a consumer's financial responsibility for a rental car;

(12) "Rental agreement", any document or combination of documents, which, when read together and incorporated by reference to each other, relate to and establish the terms and conditions of the rental of a motor vehicle by an individual; or when such a combination of documents is entered into as part of any written master, corporate, group or individual agreement setting forth the terms and conditions governing the use of a rental car rented by a car rental company;

(13) "Vehicle license fees", charges that may be imposed upon any transaction originating in the state of Missouri to recoup costs incurred by a car rental company to license, title, inspect, register, plate, and pay personal property taxes on rental vehicles.

(L. 1989 H.B. 893 1, A.L. 2004 H.B. 1285 merged with S.B. 1233, et al., A.L. 2007 S.B. 82)



Advertising, restrictions, requirements--prices advertised, quantity to be sufficient--surcharge fees--other terms, clearly disclosed.

407.732. 1. Any advertisement shall be nondeceptive and in plain language. Deception may result not only from a direct statement in the advertisement and from reasonable inferences therefrom, but also from omitting or obscuring a material restriction or fact.

2. Print advertisements that include prices for car rentals shall make clear and conspicuous disclosure of the following applicable restrictions:

(1) The expiration date of the price offered if it is available for less than thirty days after the last date of publication of the advertisement;

(2) The existence of any geographical limitations on use;

(3) The extent of any advance reservation or advance payment requirements;

(4) Airport access fee disclosure;

(5) The existence of any penalties or higher rates that may apply for early or late returns for weekly or weekend rentals;

(6) Existence of additional driver fee;

(7) The existence of blackout dates or specific blackout dates for location specific advertisements;

(8) Nonavailability of offer at all locations;

(9) Disclosure of mileage caps and charges;

(10) Disclosure of collision damage waiver costs.

Print advertisements that include prices for car rentals, where mileage fees apply to the advertised price, shall prominently disclose this extraordinary material restriction. Print advertisements that include prices for car rentals, where a company sells collision damage waiver to the public and does not include this cost in the advertised rate, shall prominently disclose the price for collision damage waiver.

3. Broadcast commercials that include prices shall indicate whether substantial restrictions apply and shall include:

(1) The expiration date of the price offered if the advertised price is available for less than thirty days;

(2) Nonavailability of the advertised price in certain locations if that is the case;

(3) Mileage limitations and charges, if any;

(4) Price or price range for collision damage waiver.

4. Any advertised price shall be available in sufficient quantity to meet reasonably expected public demand for the rental cars advertised for the entire advertised period, beginning on the day on which the advertisement appears and continuing at least thirty days thereafter, unless the advertisement clearly and conspicuously discloses a shorter or longer expiration date for the offer, and in that event, through the expiration date. Prices may be advertised although less cars are available than would be required to meet the expected demand, as long as this limitation is clearly and conspicuously set forth in the advertisement and a reasonable number of cars are made available at the advertised price.

5. The existence of each additional fee, charge, or surcharge that a consumer must pay and which may be imposed as a separately stated charge on a rental transaction including, but in no way to be construed as limited to, airport fees and vehicle license fees shall be disclosed any time a price is advertised and each fee, charge, or surcharge shall be clearly and conspicuously disclosed on the rental agreement.

6. A photograph of a rental car shall not be used in a price advertisement unless the advertisement clearly and conspicuously discloses, in immediate proximity to the photograph, the cost to rent the car depicted. A photograph of a rental car shall not be used in an advertisement if the advertisement states directly or by implication that the automobile depicted may be rented under certain conditions and that is not the case.

7. Any price advertised as a "daily price" or "price per day" shall be available for rentals of a single day or more, and any price advertised as a "weekly" rate shall be available for the first week and for subsequent weeks of the same rental. A rental company shall not charge more than a weekly price which was advertised if a customer on a weekly rental returns the car earlier than seven days. A price advertised as a "weekend rate" shall be available on both Saturday and Sunday.

8. Any car rental advertising promotion which extends a free offer or promises a gift or other incentive shall clearly and conspicuously disclose all the terms and conditions for receiving the offer, gift or incentive. A gift, incentive, or other merchandise or service shall not be advertised as free if the cost of the item, in whole or in part, is included in the advertised rental rate. If the gift or offer is provided by a third party, the car rental company shall be fully responsible for providing the gift or offer under the terms and conditions disclosed.

9. A rental car shall not be advertised using the words "unlimited mileage" or other terms that suggest there are absolutely no mileage restrictions on the use of the rental vehicle only unless there are no geographical restrictions on the use of the vehicle.

10. At the time of the car rental transaction, the car rental company shall disclose the following:

(1) The total cost, including any airport access fees;

(2) Geographical limitations;

(3) Advance reservation or payment requirements;

(4) Penalties or higher rates that may apply for early or late returns for weekly or weekend rentals;

(5) Cost of additional driver fee;

(6) Blackout dates.

(L. 1989 H.B. 893 2, A.L. 2007 S.B. 82)



Business practices, nondeceptive--collision damage waiver, terms, conditions, notice required--damages, estimates, how made--remedies.

407.735. 1. Any business practices utilized by car rental companies in furtherance of their business of renting vehicles to the public shall be nondeceptive, fair and shall not be unconscionable.

2. Any collision damage waiver product offered for sale to the public shall not contain any provisions that are deceptive, unfair or unconscionable. It is deceptive, unfair, and unconscionable to require a consumer to assume absolute liability for damage or loss up to the total value of a rental vehicle regardless of fault as a condition of the rental agreement, and then not include as part of any collision damage waiver product, a waiver of liability for any damage or loss which occurs as a result of the consumer's ordinary negligence, except where:

(1) The damage is caused intentionally by an authorized driver or as a result of his willful and wanton misconduct;

(2) The damage arises out of the authorized driver's operation of the vehicle while intoxicated or under the influence of any illegal or unauthorized drug;

(3) The rental transaction is based on fraudulent information supplied by the renter;

(4) The damage arises out of the use of the vehicle while committing or otherwise engaged in a criminal act in which the automobile usage is substantially related to the nature of the criminal activity;

(5) The damage arises out of the use of the vehicle to carry persons or property for hire;

(6) The damage occurs while the vehicle is operated by a person other than an authorized driver as defined in section 407.730;

(7) The damage arises out of the use of the vehicle outside of the United States unless such use is specifically authorized by the rental agreement;

(8) Towing or pushing anything or if operation of the vehicle on an unpaved road has resulted in damage or loss which is a direct result of the road or driving conditions;

(9) Loss due to the theft of the rental vehicle. However, the renter shall be presumed to have no liability for any loss due to theft if:

(a) An authorized driver has possession of the ignition key furnished by the rental company or an authorized driver establishes that the ignition key furnished by the car rental company was not in the vehicle at the time of the theft; and

(b) An authorized driver files an official report of the theft with the police or other law enforcement agency within twenty-four hours of learning of the theft and reasonably cooperates with the car rental company and the police or other law enforcement agency in providing information concerning the theft.

The presumption set forth in this paragraph is a presumption affecting the burden of proof which the car rental company may rebut by establishing that an authorized driver committed, or aided and abetted the commission of, the theft.

3. Any claim resulting from damage to or loss of a rental vehicle shall be reasonably and rationally related to the actual loss incurred. The car rental company shall not assert or collect any claim for physical or mechanical damage to or loss of a rental vehicle which exceeds: the actual cash value of the vehicle immediately before the loss less any proceeds from the vehicle's disposal after the loss, or the actual cost to repair the damaged vehicle including all discounts or price reductions, whichever is less. Such claim shall be based on an estimate of damage or repair invoice made by an independent appraisal company, an insurance company, or a repair facility that completed or would complete the repairs. A car rental company's charge for loss of use shall not exceed a reasonable estimate of the actual income lost.

4. It is a deceptive and unfair practice for a car rental company or employee to knowingly and intentionally misrepresent any material element of a rental agreement transaction including the sale of collision damage waiver and car rental insurance. The company shall disclose in the rental agreement the extent of the consumer's liability for the vehicle and applicable mileage limitations and charges. When the consumer elects the collision damage waiver or car rental insurance, the price for collision damage waiver and car rental insurance shall appear on the rental agreement. A car rental company shall not require the purchase of collision damage waiver or car rental insurance. No car rental company shall sell to a consumer or offer to sell a consumer a collision damage waiver or car rental insurance as a part of the rental agreement unless the car rental company provides the consumer with the following written notice:

COLLISION DAMAGE WAIVER AND CAR RENTAL INSURANCE NOTICE: OUR CONTRACT OFFERS FOR AN ADDITIONAL CHARGE COLLISION DAMAGE WAIVER AND CAR RENTAL INSURANCE PRODUCTS. BEFORE DECIDING WHETHER TO PURCHASE ANY OF THESE OPTIONAL PRODUCTS, YOU MAY WISH TO DETERMINE WHETHER YOUR PERSONAL INSURANCE OR CREDIT CARD PROVIDES YOU COVERAGE DURING THE RENTAL PERIOD. THE PURCHASE OF ANY OF THESE OPTIONAL PRODUCTS IS NOT REQUIRED TO RENT A VEHICLE.

Such notice shall be made on the face of the rental agreement as part of the written contract and shall be set apart in boldface type and in no smaller print than ten-point type, and shall include a space for the consumer to acknowledge his receipt of this notice. This notice requirement shall be deemed satisfied if this written notice appears in materials furnished to a consumer during the enrollment process into a master rental agreement. This notice provision is deemed complied with for all consumers who have previously enrolled into a master rental agreement prior to August 28, 2004, and no further notice shall be required.

5. The car rental company shall provide a notice at the rental office in the form of a sign, placard, or brochure that informs the consumer of the following:

(1) The availability of collision damage waiver;

(2) The availability of car rental insurance;

(3) A statement that the purchase of collision damage waiver and/or car rental insurance is not required in order to rent.

The following language may be used to comply with the requirements of this section, but shall not be considered the exclusive language that may be used:

COLLISION DAMAGE WAIVER AND CAR RENTAL INSURANCE NOTICE:

Our contract offers for an additional charge optional products which provide you protection during your rental, including:

1. Collision Damage Waiver: You are responsible for all damages to or loss of the rental vehicle. A Collision Damage Waiver will relieve you of responsibility for all or part of the damage to the rental vehicle that may occur during the rental period.

2. Personal Accident Insurance: Personal Accident Insurance provides accidental death and accident medical insurance that protects you during the rental period in or out of the rental vehicle and your passengers while in the rental vehicle.

3. Personal Effects Coverage: Personal Effects Coverage protects your possessions from loss or damage during the rental period.

4. Liability Insurance: Liability Insurance provides protection to cover injuries or death to third parties or damage to a third party's property if you are at fault in an accident with the rental vehicle during the rental period.

Before deciding to purchase any of these optional products, you may wish to determine whether your personal insurance or credit card provides you coverage during the rental period.

The purchase of any of these products is not required to rent a vehicle.

6. Car rental companies shall not place a hold against a consumer's credit limit or charge a consumer's credit card in a deceptive or unfair manner, and without full and complete disclosure of such practice.

7. The remedies for any violation by a car rental company of any provision of sections 407.730 to 407.735, or for any conduct, act, or practice prescribed by any provisions of sections 407.730 to 407.735, shall be injunctive relief and monetary damages in an amount not to exceed fifty dollars for each violation. The aggregate amount of monetary damages which may be assessed against a car rental company for violations of any provisions of sections 407.730 to 407.735, or for any conduct, act, or practice prescribed by any provisions of sections 407.730 to 407.735, shall not exceed the sum of one hundred thousand dollars in the aggregate during any calendar year.

(L. 1989 H.B. 893 3, A.L. 2003 S.B. 207, A.L. 2004 H.B. 1285 merged with S.B. 1233, et al.)



Actions, unlawful subleasing, who may bring--definitions.

407.738. 1. Any one or more of the following persons who suffers any damage proximately resulting from one or more acts of unlawful motor vehicle subleasing, as described in section 407.742 may bring an action in the circuit court in the county in which the defendant resides, has his principal place of business, or where an act of unlawful motor vehicle subleasing occurred against the person who has engaged in those acts:

(1) A seller or other secured party under a conditional sale contract or a security agreement;

(2) A lender under a direct loan agreement;

(3) A lessor under a lease contract;

(4) A buyer under a conditional sale contract;

(5) A purchaser under a direct loan agreement, an agreement which provides for a security interest, or an agreement which is equivalent to these types of agreements;

(6) A lessee under a lease contract;

(7) An actual or purported transferee or assignee of any right or interest of a buyer, a purchaser, or a lessee.

2. The circuit court in an action under subsection 1 of this section may award, in its discretion, actual damages; punitive damages; reasonable attorney's fees and costs to the prevailing party; equitable relief, including, but not limited to, an injunction and restitution of money and property; and any other equitable relief which the court deems proper.

3. As used in sections 407.738 to 407.745, the following terms have the following meanings:

(1) "Buyer" has the meaning set forth in subdivision (9) of section 365.010;

(2) "Conditional sale contract" means:

(a) Any contract for the sale of a motor vehicle between a buyer and a seller, with or without accessories, under which possession is delivered to the buyer but the title vests in the buyer thereafter only upon the payment of all or part of the price, or upon the performance of any other condition; or

(b) Any contract for the bailment or leasing of a motor vehicle between a buyer and a seller, with or without accessories, by which the bailee or lessee agrees to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the vehicle and its accessories, if any, at the time the contract is executed, and by which it is agreed that the bailee or lessee will become, or for no other consideration or for a nominal consideration has the option of becoming, the owner of the vehicle upon full compliance with the terms of the contract; or

(c) Any contract for the sale of a motor vehicle between a buyer and a seller, with or without accessories, under which possession is delivered to the buyer, and a lien on the property is to vest in the seller as security for the payment of part or all of the price, or for the performance of any other condition;

(d) Conditional sale contract includes any contract for the sale or bailment of a motor vehicle between a buyer and a seller primarily for business or commercial purposes;

(3) "Direct loan agreement" means an agreement between a lender and a purchaser whereby the lender has advanced funds pursuant to a loan secured by the motor vehicle which the purchaser has purchased;

(4) "Lease contract" means a lease contract between a lessor or bailor and a lessee or bailee including a lease for business or commercial purposes;

(5) "Motor vehicle" means any vehicle required to be registered pursuant to chapter 301;

(6) "Person" has the meaning set forth in subdivision (5) of section 407.010;

(7) "Purchaser", has the meaning set forth in subdivision (33) of section 400.1-201;

(8) "Security agreement" and "secured party" have the meanings set forth, respectively, in paragraphs (h) and (i) of subdivision (1) of section 400.9-105. "Security interest" has the meaning set forth in subdivision (37) of section 400.1-201;

(9) "Seller" has the meaning set forth in subdivision (12) of section 365.020 and includes the present holder of the conditional sale contract.

4. The rights and remedies provided in sections 407.738 to 407.745 are in addition to any other rights and remedies provided by law.

(L. 1989 H.B. 893 4)



Penalty, unlawful subleasing--prosecuting attorney, attorney general, duty to commence action, when.

407.740. 1. Any person who willfully and knowingly engages in unlawful subleasing of a motor vehicle, as defined in section 407.742, shall be guilty of a class D felony. It shall be the duty of each prosecuting attorney and circuit attorney in their respective jurisdictions to commence any criminal actions under sections 407.738 to 407.745, and the attorney general shall have concurrent original jurisdiction to commence such criminal actions throughout the state where such violations have occurred.

2. Whenever it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in unlawful subleasing of a motor vehicle, he may bring an action pursuant to section 407.100 for an injunction prohibiting such person from continuing such methods, uses, acts, or practices, or engaging therein, or doing anything in furtherance thereof. In any action brought by the attorney general under this subsection, all of the provisions of sections 407.100 to 407.140 shall apply thereto.

(L. 1989 H.B. 893 5)



Unlawful subleasing, elements of crime.

407.742. A person engages in an act of unlawful subleasing of a motor vehicle if all of the following conditions are met:

(1) The motor vehicle is subject to a lease contract, conditional sale contract, or security agreement the terms of which prohibit the transfer or assignment of any right of interest in the motor vehicle or under the lease contract, conditional sale contract, or security agreement;

(2) The person is not a party to the original lease contract, conditional sale contract, or security agreement;

(3) The person transfers or assigns, or purports to transfer or assign, or assists, causes, or arranges an actual or purported transfer or assignment of any right or interest in the motor vehicle or under the lease contract, conditional sale contract, or security agreement, to any person who is not a party to the original lease contract, conditional sale contract, or security agreement;

(4) The person does not obtain, prior to the transfer or assignment described in subdivision (3) of this section, written consent to the transfer or assignment from the motor vehicle's lessor, seller, or secured party;

(5) The person receives compensation or some other consideration for the transfer or assignment described in subdivision (3) of this section.

(L. 1989 H.B. 893 6)



Assignment or transfer of motor vehicle, not unlawful subleasing, when.

407.745. 1. The actual or purported transfer or assignment, or the assisting, causing, or arranging of an actual or purported transfer or assignment, of any right or interest in a motor vehicle or under a lease contract, conditional sale contract, or security agreement, by an individual who is a party to the original lease contract, conditional sale contract, or security agreement is not an act of unlawful subleasing of a motor vehicle and is not subject to prosecution.

2. Sections 407.730 to 407.748 shall not affect the enforceability of any provision of any lease contract, conditional sale contract, security agreement, or direct loan agreement by any party thereto.

(L. 1989 H.B. 893 7)



Violations are unlawful merchandising practices--remedies not exclusive.

407.748. 1. Violation of any provision of sections 407.730 to 407.748 shall be deemed an unlawful practice under sections 407.010 to 407.130, and shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.130. The attorney general shall have all powers, rights and duties regarding violations of sections 407.730 to 407.748 as are provided in sections 407.010 to 407.130, in addition to rulemaking authority as provided in section 407.145.

2. The provisions of sections 407.730 to 407.748 are not exclusive. The remedy specified in sections 407.730 to 407.748 for violation of any section of sections 407.730 to 407.748 or for conduct described by any section of sections 407.730 to 407.748 shall be in addition to any other procedures or remedies for any violation or conduct provided for in any other law. Nothing in sections 407.730 to 407.748 shall limit any other statutory or any common law rights of the attorney general, any circuit attorney or prosecuting attorney, or any other person. If any act or practice prescribed by sections 407.730 to 407.748 is also the basis for a cause of action in common law or a violation of another statute, the purchaser may assert the common law or statutory cause of action under the procedures and with the remedies applicable thereto.

3. If any provision of sections 407.730 to 407.748 or any rule or regulation made thereunder, or the application thereof to any person or circumstances is held invalid by the court of competent jurisdiction, the remainder of sections 407.730 to 407.748, rule or regulation and the application of such provision to other persons or circumstances shall not be affected thereby.

(L. 1989 H.B. 893 8)



Manufacturer, wholesaler or distributor not to terminate contract except for good cause--good cause, how established.

407.753. 1. Any manufacturer, wholesaler or distributor of industrial, maintenance and construction power equipment used for industrial, maintenance and construction applications and repair parts therefor, who enters into a written or parol contract with any person, firm, or corporation engaged in the business of selling and repairing industrial, maintenance and construction power equipment used for industrial, maintenance and construction applications and repair parts therefor, whereby such retailer agrees to maintain a stock of parts or complete or whole machines or attachments, shall not terminate, cancel, or fail to renew any such contract without good cause. "Good cause" means failure by the retailer to substantially comply with essential and reasonable requirements imposed upon the retailer by the contract if such requirements are not different from those requirements imposed on other similarly situated retailers either by their terms or in the manner of their enforcement. In addition, good cause shall exist whenever:

(1) The retailer has transferred an interest in the retailer business without the manufacturer's, wholesaler's or distributor's written consent, or there has been a withdrawal from the retailer's business of an individual proprietor, partner, major shareholder, or the manager of the retailer's business, or there has been a substantial reduction in interest of a partner or major stockholder without the written consent of the manufacturer, wholesaler, or distributor;

(2) The retailer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing, or there has been a closeout or sale of a substantial part of the retailer's assets related to the retailer's business or there has been a commencement or dissolution or liquidation of the retailer's business;

(3) There has been a change, without the prior written approval of the manufacturer, wholesaler, or distributor, in the location of the retailer's principal place of business under the retailer's agreement with the manufacturer, wholesaler, or distributor;

(4) The retailer has defaulted under any chattel mortgage or other security agreement between the retailer and the manufacturer, wholesaler, or distributor, or there has been a revocation or discontinuance of any guarantee of the retailer's present or future obligations to the manufacturer, wholesaler, or distributor;

(5) The retailer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned his business, except for reasonable and customary closures of business;

(6) The retailer has pleaded guilty to or has been convicted of a felony affecting the relationship between the retailer and the manufacturer, wholesaler, or distributor;

(7) The retailer has engaged in conduct which is injurious or detrimental to the retailer's customers or the public welfare;

(8) The retailer has consistently failed to meet the manufacturer's, wholesaler's or distributor's requirements for reasonable market penetration based on the manufacturer's, wholesaler's, or distributor's experience in other comparable marketing areas.

2. Except as otherwise provided in this section, a supplier shall provide a retailer at least ninety-days prior written notice of termination, cancellation, or nonrenewal of the contract. The notice shall state all reasons constituting good cause for termination, cancellation or nonrenewal and shall provide that the dealer has sixty days in which to cure any claimed deficiency. If the deficiency is rectified within sixty days the notice shall be void. The notice and right-to-cure provisions under this section shall not apply if the reason for termination, cancellation or nonrenewal is for any reason set forth in subdivisions (1) to (8) of this section.

(L. 1991 S.B. 241 4)



How to apply to successors in interest--successor in interest defined.

407.754. The obligations of any wholesaler, manufacturer or distributor created by the provisions of sections 407.750 to 407.754 apply to any successor in interest or assignee of that wholesaler, manufacturer, or distributor. A "successor in interest" includes any purchaser of substantially all of the assets or over fifty percent of the stock, any surviving corporation resulting from a merger or liquidation, any receiver, or any trustee of the original wholesaler, manufacturer or distributor.

(L. 1991 S.B. 241 5)



Action for damages and costs by retailer for violations--remedy not exclusive.

407.755. If a manufacturer, wholesaler or distributor violates any provisions of sections 407.753 and 407.754, a retailer may bring an action against such manufacturer, wholesaler, or distributor in any court of competent jurisdiction for damages sustained by the retailer as a consequence of the violation, together with the actual costs of the action, including reasonable attorney's fees. The court may award court costs and reasonable attorney fees to the prevailing party. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

(L. 1991 S.B. 241 6)



Law, applicability to existing and future contracts.

407.756. The provisions of sections 407.750 to 407.756 shall apply to all continuing or nonrenewable contracts and all other contracts entered into, amended, or renewed after August 28, 1991. Any contract in force and effect on August 28, 1991, which, by its terms, will terminate on a date subsequent thereto, is governed by the law as it existed before August 28, 1991.

(L. 1991 S.B. 241 7)



Going-out-of-business sales, requirements, limitations, extension--exceptions.

407.800. Any person, except a licensed auctioneer as defined in section 343.010, who advertises or conducts a going-out-of-business sale or any sale of merchandise which indicates the person conducting the sale is terminating or liquidating the person's trade, commerce or business for any reason shall inform the attorney general, in writing, not less than ten days prior to the sale of the duration of the sale by indicating the first and last days of the sale. Any person who informs the attorney general that the person is going to conduct a going-out-of-business sale shall submit to the attorney general information regarding the items which will be offered for sale during the going-out-of-business sale. The inventory shall not be supplemented after the beginning of such sale. The going-out-of-business sale shall not exceed a period of sixty days unless an extension has been registered with the attorney general's office by affidavit. Such affidavit shall indicate the duration of such extension and the reasons therefor, and the time extension shall not exceed a reasonable time period as determined by the attorney general based upon the information provided to the attorney general by the person conducting the sale. Any affidavit supporting the request for an extension shall describe the efforts made by the person and the person's plan to dispose of such sale items, and shall state why the items remain unsold, and shall contain any other information requested by the attorney general. A violation of this section shall be considered a violation of section 407.020 and shall be remedied pursuant to section 407.100. If the attorney general fails to take action within one hundred twenty days after a violation of this section occurs, the prosecuting attorney or circuit attorney of the appropriate jurisdiction may take action as provided in sections 407.020 and 407.100.

(L. 1980 H.B. 993, A.L. 1986 S.B. 685, A.L. 1995 H.B. 558)



Citation of law.

407.810. Sections 407.810 to 407.835 shall be known and may be cited as the "Motor Vehicle Franchise Practices Act" or the "MVFP Act".

(L. 1980 H.B. 1600 1, A.L. 2010 H.B. 2198)



Public policy statement.

407.811. It is declared to be the public policy of the state to provide for fair and impartial regulation of those persons engaged in the manufacturing, distributing, importing, or selling of motor vehicles. The provisions of the MVFP act shall be administered in such a manner that will promote fair dealing and honesty in the motor vehicle industry and among those engaged therein without unfair or unreasonable discrimination or undue preference or advantage. It is further declared to be the policy of the state to protect the public interest in the purchase and trade of motor vehicles so as to ensure protection against irresponsible vendors and dishonest or fraudulent sales practices and to assist, provide, and secure a stable, efficient, enforceable, and verifiable method for the distribution of motor vehicles to consumers in the state.

(L. 2010 H.B. 2198)



Compliance with act required--applicability of act.

407.812. 1. Any franchisor obtaining or renewing its license after August 28, 2010, shall be bound by the provisions of the MVFP act and shall comply with it, and no franchise agreement made, entered, modified, or renewed after August 28, 2010, shall avoid the requirements of the MVFP act, or violate its provisions, and no franchise agreement shall be performed after the date the franchisor's license is issued or renewed in such a manner that the franchisor avoids or otherwise does not conform or comply with the requirements of the MVFP act. Notwithstanding the effective date of any franchise agreement, all franchisor licenses and renewals thereof are issued subject to all provisions of the MVFP act and chapter 301 and any regulations in effect upon the date of issuance, as well as all future provisions of the MVFP act and chapter 301 and any regulations which may become effective during the term of the license.

2. The provisions of the MVFP act shall apply to each franchise that a franchisor, manufacturer, importer, or distributor has with a franchisee and all agreements between a franchisee and a common entity or any person that is controlled by a franchisor.

(L. 2010 H.B. 2198)



Definitions.

407.815. As used in sections 407.810 to 407.835, unless the context otherwise requires, the following terms mean:

(1) "Administrative hearing commission", the body established in chapter 621 to conduct administrative hearings;

(2) "All-terrain vehicle", any motorized vehicle manufactured and used exclusively for off-highway use which is fifty inches or less in width, with an unladen dry weight of six hundred pounds or less, traveling on three, four or more low pressure tires, with a seat designed to be straddled by the operator, and handlebars for steering control;

(3) "Coerce", to compel or attempt to compel a person to act in a given manner by pressure, intimidation, or threat of harm, damage, or breach of contract, but shall not include the following:

(a) Good faith recommendations, exposition, argument, persuasion or attempts at persuasion without unreasonable conditions;

(b) Notice given in good faith to any franchisee of such franchisee's violation of terms or provisions of such franchise or contractual agreement; or

(c) Any conduct set forth in sections 407.810 to 407.835 that is permitted of the franchisor;

(4) "Common entity", a person:

(a) Who is either controlled or owned, beneficially or of record, by one or more persons who also control or own more than forty percent of the voting equity interest of a franchisor; or

(b) Who shares directors or officers or partners with a franchisor;

(5) "Control", to possess, directly or indirectly, the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract, or otherwise; except that "control" does not include the relationship between a franchisor and a franchisee under a franchise agreement;

(6) "Dealer-operator", the individual who works at the established place of business of a dealer and who is responsible for and in charge of day-to-day operations of that place of business;

(7) "Distributor", a person, resident or nonresident, who, in whole or in part, sells or distributes new motor vehicles to motor vehicle dealers in this state;

(8) "Franchise" or "franchise agreement", a written arrangement or contract for a definite or indefinite period, in which a person grants to another person a license to use, or the right to grant to others a license to use, a trade name, trademark, service mark, or related characteristics, in which there is a community of interest in the marketing of goods or services, or both, at wholesale or retail, by agreement, lease or otherwise, and in which the operation of the franchisee's business with respect to such franchise is substantially reliant on the franchisor for the continued supply of franchised new motor vehicles, parts and accessories for sale at wholesale or retail. The franchise includes all portions of all agreements between a franchisor and a franchisee, including but not limited to a contract, new motor vehicle franchise, sales and service agreement, or dealer agreement, regardless of the terminology used to describe the agreement or relationship between the franchisor and franchisee, and also includes all provisions, schedules, attachments, exhibits and agreements incorporated by reference therein;

(9) "Franchisee", a person to whom a franchise is granted;

(10) "Franchisor", a person who grants a franchise to another person;

(11) "Good faith", the duty of each party to any franchise and all officers, employees, or agents thereof, to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or threat of coercion or intimidation from the other party;

(12) "Importer", a person who has written authorization from a foreign manufacturer of a line-make of motor vehicles to grant a franchise to a motor vehicle dealer in this state with respect to that line-make;

(13) "Line-make", a collection of models, series, or groups of motor vehicles manufactured by or for a particular manufacturer, distributor or importer offered for sale, lease or distribution pursuant to a common brand name or mark; provided, however:

(a) Multiple brand names or marks may constitute a single line-make, but only when included in a common dealer agreement and the manufacturer, distributor or importer offers such vehicles bearing the multiple names or marks together only, and not separately, to its authorized dealers; and

(b) Motor vehicles bearing a common brand name or mark may constitute separate line-makes when pertaining to motor vehicles subject to separate dealer agreements or when such vehicles are intended for different types of use;

(14) "Manufacturer", any person, whether a resident or nonresident of this state, who manufactures or assembles motor vehicles or who manufactures or installs on previously assembled truck chassis special bodies or equipment which, when installed, form an integral part of the motor vehicle and which constitute a major manufacturing alteration. The term "manufacturer" includes a central or principal sales corporation or other entity, other than a franchisee, through which, by contractual agreement or otherwise, it distributes its products;

(15) "Motor vehicle", for the purposes of sections 407.810 to 407.835, any motor-driven vehicle required to be registered pursuant to the provisions of chapter 301, except that, motorcycles and all-terrain vehicles as defined in section 301.010 shall not be included. The term "motor vehicle" shall also include any engine, transmission, or rear axle, regardless of whether attached to a vehicle chassis, that is manufactured for the installation in any motor-driven vehicle with a gross vehicle weight rating of more than sixteen thousand pounds that is registered for the operations on the highways of this state under chapter 301;

(16) "New", when referring to motor vehicles or parts, means those motor vehicles or parts which have not been held except as inventory, as that term is defined in subdivision (4) of section 400.9-109;

(17) "Person", a natural person, sole proprietor, partnership, corporation, or any other form of business entity or organization;

(18) "Principal investor", the owner of the majority interest of any franchisee;

(19) "Reasonable", shall be based on the circumstances of a franchisee in the market served by the franchisee;

(20) "Require", to impose upon a franchisee a provision not required by law or previously agreed to by a franchisee in a franchise agreement;

(21) "Successor manufacturer", any manufacturer that succeeds, or assumes any part of the business of, another manufacturer, referred to as the "predecessor manufacturer", as the result of:

(a) A change in ownership, operation, or control of the predecessor manufacturer by sale or transfer of assets, corporate stock, or other equity interest, assignment, merger, consolidation, combination, joint venture, redemption, court-approved sale, operation of law, or otherwise;

(b) The termination, suspension or cessation of a part or all of the business operations of the predecessor manufacturer;

(c) The noncontinuation of the sale of the product line; or

(d) A change in distribution system by the predecessor manufacturer, whether through a change in distributor or the predecessor manufacturer's decision to cease conducting business through a distributor altogether.

(L. 1980 H.B. 1600 2, A.L. 1997 H.B. 516, A.L. 1998 H.B. 1055, A.L. 2001 H.B. 575, A.L. 2007 S.B. 82, A.L. 2010 H.B. 2198)



Motor driven vehicle, defined for section 407.815--exemption for recreational vehicle dealers or manufacturers.

407.816. 1. As used in subdivision (7) of section 407.815, the term "motor vehicle" shall not include "trailer" as such term is defined in subdivision (58) of section 301.010.

2. Prior to August 1, 2002, the provisions of section 407.817, subdivisions (13), (17) and (18) of section 407.825 and section 407.826 shall not apply to recreational vehicle dealers or manufacturers.

3. As of August 1, 2002, the term "motor vehicle" as used in sections 407.810 to 407.835 shall not apply to recreational vehicles as defined in section 407.1320.

(L. 1997 H.B. 207 1, A.L. 2001 H.B. 575)



Establishment or transfer of an existing franchise, procedures for franchisor.

407.817. 1. Notwithstanding any provision of a franchise to the contrary, for purposes of the MVFP act, "relevant market area" means:

(1) For a proposed new motor vehicle dealer or a new motor vehicle dealer who plans to locate or relocate his or her place of business in a county having a population which is greater than one hundred thousand, the area within a radius of eight miles of the intended site of the proposed or relocated dealer. The eight-mile distance shall be determined by measuring the distance between the nearest surveyed boundary of the existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business; or

(2) For a proposed new motor vehicle dealer or a new motor vehicle dealer who plans to locate or relocate his or her place of business in a county having a population which is not greater than one hundred thousand, the area within a radius of fifteen miles of the intended site of the proposed or relocated dealer. The fifteen-mile distance shall be determined by measuring the distance between the nearest surveyed boundary line of the existing new motor vehicle dealer's principal place of business and the nearest surveyed boundary line of the proposed or relocated new motor vehicle dealer's principal place of business.

2. As used in this section, "relocate" and "relocation" shall not include the relocation of a new motor vehicle dealer within two miles of its established place of business.

3. Before a franchisor enters into a franchise establishing an additional franchise, reopening a previously existing franchise, or relocating an existing franchise within a relevant market area where the same line-make is represented, the franchisor shall give written notice to each franchisee of the same line-make in the relevant market area of its intention to establish an additional franchise, reopen a previously existing franchise, or relocate an existing franchise within that relevant market area. Such notice shall state:

(1) The specific location at which the additional, reopened, or relocated franchise will be established; and

(2) The date on or after which the franchisor intends to be engaged in business with the additional, reopened, or relocated franchise at the proposed location.

4. Within thirty days after receiving the notice provided for in subsection 3 of this section, or within thirty days after the end of any appeal procedure provided by the franchisor, a franchisee to whom notice was required in subsection 3 of this section may bring an action pursuant to section 407.822 to determine whether good cause exists for establishing an additional franchise, reopening a previously existing franchise, or relocating an existing franchise.

5. This section shall not apply to the reopening or replacement in a relevant market area of a closed franchise that has been closed within the preceding year, if the established place of business of the reopened or replacement franchise is within two miles of the established place of business of the closed franchise and only if the reopened or replaced franchise is offered to the franchisee who had previously operated the closed franchise within the preceding year if that franchise had not been terminated under the provisions of the MVFP act or had not voluntarily closed the franchise.

6. In determining whether good cause exists for establishing an additional franchise, reopening a previously existing franchise, or relocating a franchise for the same line-make, the administrative hearing commission shall take into consideration all relevant circumstances, including, but not limited to, the following:

(1) The size and permanency of the investment and obligations incurred by the existing franchisees of the same line-make in the relevant market area; and any damage that such existing franchisees may suffer from the establishment, reopening, or relocation of a franchise into the relevant market area;

(2) The effect on the retail motor vehicle business and the consuming public in the relevant market area;

(3) Whether it is injurious or beneficial to the public welfare;

(4) Whether the existing franchisees of the same line-make in that relevant market area are providing adequate competition and convenient consumer care for the motor vehicles of that line-make in the relevant market area, including the adequacy of motor vehicle sales and qualified service personnel;

(5) Whether the establishment, reopening, or relocation of a franchise would promote competition; and whether the benefits to the public and the franchisor from any such increased competition outweigh the harm to the existing franchisees in the relevant market area;

(6) Growth or decline of the population and the number of new motor vehicle registrations in the relevant market area; and

(7) The effect on the reopening or relocating franchisee of a denial of its relocation into the relevant market area.

7. The remedies and relief available pursuant to this section are not exclusive and are in addition to those provided in section 407.835 or otherwise permitted by law or equity.

(L. 2001 H.B. 575, A.L. 2010 H.B. 2198)

(2009) Section is sole and exclusive authority for challenging the establishment of a new motor vehicle dealership under the Motor Vehicle Franchise Practices Act. Parktown Imports v. Audi of America, 278 S.W.3d 670 (Mo.banc).



License required.

407.818. No franchisor shall engage in business in this state without a license therefor as provided in sections 301.550 to 301.573. No motor vehicle, foreign or domestic, may be sold, leased, or offered for sale or lease in this state unless the franchisor, which issues a franchise to a franchisee in this state, is licensed under sections 301.550 to 301.573. No franchisor shall modify the area of responsibility to avoid the requirements of section 407.817 or 407.833, or any other section of the MVFP act. Each franchisor shall renew its license annually by the date specified by the department of revenue.

(L. 2010 H.B. 2198)



Successor manufacturer, restrictions on line-make franchise offers--fair market value calculation.

407.819. 1. Notwithstanding any provision in a franchise to the contrary, no successor manufacturer shall, for a period of two years from the date of acquisition of control by that successor manufacturer of a line-make from a predecessor manufacturer, offer a franchise to any person for a line-make of a predecessor manufacturer in any portion of the relevant market area in which the predecessor manufacturer previously cancelled, terminated, noncontinued, failed to renew, or otherwise ended a franchise agreement with a franchisee who had a franchise facility in that relevant market area without first offering the franchise to the former franchisee at no cost, unless:

(1) Within sixty days of the former franchisee's cancellation, termination, noncontinuance, or nonrenewal, the predecessor manufacturer had consolidated the line-make with another of its line-makes for which the predecessor manufacturer had a franchisee with a then-existing franchise facility in that relevant market area;

(2) The successor manufacturer has paid the former franchisee the fair market value of the former franchisee's motor vehicle dealership in accordance with this section;

(3) The predecessor manufacturer successfully terminated the former franchisee under subdivision (5) of section 407.825.

2. For purposes of this section, the fair market value of a former franchisee's motor vehicle dealership shall be calculated as of the date of the following that yields the highest fair market value: the date the predecessor manufacturer announced the action that resulted in the cancellation, termination, noncontinuance, or nonrenewal; the date the action that resulted in cancellation, termination, noncontinuance, or nonrenewal became final; or the date twelve months prior to the date that the predecessor manufacturer announced the action that resulted in the cancellation, termination, noncontinuance, or nonrenewal.

(L. 2010 H.B. 2198)



Franchisor subject to jurisdiction of Missouri courts and administrative agencies, when--service of process.

407.820. Any person who is engaged or engages directly or indirectly in purposeful contacts within the state of Missouri in connection with the offering, advertising, purchasing, selling, or contracting to purchase or to sell new motor vehicles, or who, being a motor vehicle franchisor, is transacting or transacts any business with a motor vehicle franchisee who maintains a place of business within the state and with whom he or she has a franchise, shall be subject to the jurisdiction of the courts and administrative agencies of the state of Missouri, upon service of process in accordance with the provisions of section 506.510, irrespective of whether such person is a manufacturer, importer, distributor or dealer in new motor vehicles.

(L. 1980 H.B. 1600 3, A.L. 2001 H.B. 575 merged with H.B. 693)



Complaint with administrative hearing commission, filing, when--time and place of hearing--notice to parties--final order, when--petition for review of final order--franchisee's right to file complaint, when--notice to franchisee, when, exceptions--statement required in franchisor's notice--consolidation of applications--burden of proof--mediation, when.

407.822. 1. Any party seeking relief pursuant to the provisions of sections 407.810 to 407.835 may file a complaint with the administrative hearing commission within the time periods specified in this section. The complaint shall comply with the requirements for a request for agency action set forth in chapter 536. Simultaneously, with the filing of the complaint with the administrative hearing commission, the petitioner shall send by certified mail, return receipt requested, a copy of the complaint to the party or parties against whom relief is sought. Upon receiving a timely complaint, the administrative hearing commission shall enter an order fixing a date, time and place for a hearing on the record. The administrative hearing commission shall send by certified mail, return receipt requested, a copy of the order to the party seeking relief and a copy of the order and complaint to the party or parties against whom relief is sought. The order shall also state that the party against whom relief is sought shall not proceed with the initiation of its activity or activities until the administrative hearing commission issues its final decision or order, and the party against whom relief is sought shall, within thirty days of such order, file an answer or other responsive pleading directed to each claim for relief set forth in the complaint. Failure to answer or otherwise respond within such time frame may be deemed by the administrative hearing commission as an admission of the grounds for relief set forth in the complaint.

2. Unless otherwise expressly provided in sections 407.810 to 407.835, the provisions of chapter 536 shall govern hearings and prehearing procedures conducted pursuant to the authority of this section. Any party may obtain discovery in the same manner, and under the same conditions and requirements, as is or may hereafter be provided for with respect to discovery in civil actions by rule of the supreme court of Missouri for use in the circuit courts, and the administrative hearing commission may enforce discovery by the same methods as provided by supreme court rule for use in civil cases. The administrative hearing commission shall issue a final decision or order, in proceedings arising pursuant to the provisions of sections 407.810 to 407.835, within ninety days from the conclusion of the hearing. In any proceeding initiated pursuant to sections 407.810 to 407.835 involving a matter requiring a franchisor to show good cause for any intended action being protested by a franchisee, the franchisor shall refrain from taking the protested action if, after a hearing on the matter before the administrative hearing commission, the administrative hearing commission determines that good cause does not exist for the franchisor to take such action. The franchisee may, if necessary, seek enforcement of the decision of the administrative hearing commission pursuant to the provisions of section 407.835. Venue for such proceedings shall be in the circuit court of Cole County, Missouri, or in the circuit court of the county in which the franchisee resides or operates the franchise business. In determining any relief necessary for enforcement of the decision of the administrative hearing commission, the court shall defer to the commission's factual findings, and review shall be limited to a determination of whether the commission's decision was authorized by law and whether the commission abused its discretion. Any final decisions of the administrative hearing commission shall be subject to review pursuant to a petition for review to be filed in the court of appeals in the district in which the hearing, or any part of the hearing, is held and by delivery of copies of the petition to each party of record, within thirty days after the mailing or delivery of the final decision and notice of the final decision in such a case. Appeal of the administrative hearing commission's decision pursuant to this section shall not preclude any action authorized by section 407.835, brought in a court of competent jurisdiction, requesting an award of legal or equitable relief, provided that if such an action is brought solely for the purpose of enforcing a decision of the administrative hearing commission which is on appeal pursuant to this subsection, the court in which such action is pending may hold in abeyance its judgment pending issuance of a decision by the court of appeals. Review pursuant to this section shall be exclusive and decisions of the administrative hearing commission reviewable pursuant to this section shall not be reviewable in any other proceeding, and no other official or court shall have power to review any such decision by an action in the nature of mandamus or otherwise, except pursuant to the provisions of this section. The party seeking review shall be responsible for the filing of the transcript and record of all proceedings before the administrative hearing commission with the appropriate court of appeals.

3. Any franchisee receiving a notice from a franchisor pursuant to the provisions of sections 407.810 to 407.835, or any franchisee adversely affected by a franchisor's acts or proposed acts described in the provisions of sections 407.810 to 407.835, shall be entitled to file a complaint before the administrative hearing commission for a determination as to whether the franchisor has good cause for its acts or proposed acts.

4. Not less than sixty days before the effective date of the initiation of any enumerated act pursuant to subdivisions (5), (6), (7) and (14) of section 407.825, a franchisor shall give written notice to the affected franchisee or franchisees, by certified mail, return receipt requested, except as follows:

(1) Upon the initiation of an act pursuant to subdivision (5) of section 407.825, such notice shall be given not less than fifteen days before the effective date of such act only if the grounds for the notice include the following:

(a) Transfer of any ownership or interest in the franchised dealership without the consent of the motor vehicle franchisor;

(b) Material misrepresentation by the motor vehicle franchisee in applying for the franchise that substantially and adversely affects the franchisor;

(c) Insolvency of the motor vehicle franchisee or the filing of any petition by or against the motor vehicle franchisee under any bankruptcy or receivership law that is not vacated within twenty days from the institution thereof;

(d) Any unfair business practice by the motor vehicle franchisee after the motor vehicle franchisor has issued a written thirty-day warning to the motor vehicle franchisee to desist from such practice and the franchisee has failed to desist from the practice after having received the written thirty-day warning;

(e) Conviction of the motor vehicle franchisee of a crime which is a felony;

(f) Failure of the motor vehicle franchisee to conduct customary sales and service operations during customary business hours for at least seven consecutive business days unless such closing is due to an act of God, strike or labor difficulty or other cause over which the motor vehicle franchisee has no control; or

(g) Revocation of the motor vehicle franchisee's license;

(2) Upon initiation of an act pursuant to subdivision (7) of section 407.825, such notice shall be given within sixty days of the franchisor's receipt of a written proposal to consummate such sale or transfer and the receipt of all necessary information and documents generally used by the franchisor to conduct its review. The franchisor shall acknowledge in writing to the applicant the receipt of the information and documents and if the franchisor requires additional information or documents to complete its review, the franchisor shall notify the applicant within fifteen days of the receipt of the information and documents. If the franchisor fails to request additional information and documents from the applicant within fifteen days after receipt of the initial forms, the sixty-day time period for approval shall be deemed to run from the initial receipt date. Otherwise, the sixty-day time period for approval shall run from receipt of the supplemental requested information. In no event shall the total time period for approval exceed ninety days from the date of the receipt of the written proposal. The franchisor's notice of disapproval shall also specify the reasonable standard which the franchisor contends is not satisfied and the reason the franchisor contends such standard is not satisfied. Failure on the part of the franchisor to provide such notice shall be conclusively deemed an approval by the franchisor of the proposed sale or transfer to the proposed transferee. A franchisee's application for a hearing shall be filed with the administrative hearing commission within twenty days from receipt of such franchisor's notice;

(3) Pursuant to paragraphs (a) and (b) of subdivision (14) of section 407.825, such notice shall be given within sixty days of the franchisor's receipt of a deceased or incapacitated franchisee's designated family member's intention to succeed to the franchise or franchises or of the franchisor's receipt of the personal and financial data of the designated family member, whichever is later.

5. A franchisor's notice to a franchisee or franchisees pursuant to subdivisions (5), (6), (7) and (14) of section 407.825 shall contain a statement of the particular grounds supporting the intended action or activity which shall include any reasonable standards which were not satisfied. The notice is not effective unless it also contains, on the first page thereof, a conspicuous statement which reads as follows: "NOTICE TO FRANCHISEE: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE MISSOURI ADMINISTRATIVE HEARING COMMISSION IN JEFFERSON CITY, MISSOURI, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE CONTENTS OF THIS NOTICE. ANY ACTION MUST BE FILED WITHIN THIRTY DAYS FROM RECEIPT OF THIS NOTICE. YOU ALSO HAVE THE RIGHT TO DEMAND NONBINDING MEDIATION. YOUR DEMAND FOR MEDIATION MAY BE MAILED TO THE ADDRESS SHOWN ON THIS NOTICE. FOR FURTHER INFORMATION, CONTACT YOUR ATTORNEY AND REFER TO SECTIONS 407.810 TO 407.835, RSMO.".

6. When more than one complaint is filed with the administrative hearing commission, the administrative hearing commission may consolidate the applications into one proceeding to expedite the disposition of all relevant issues.

7. Unless otherwise specifically required by another provision of the MVFP act, in all proceedings pursuant to sections 407.810 to 407.835, the franchisor shall have the burden of proving by a preponderance of the evidence that it has acted in good faith, that all required notices were given, and that good cause exists for its actions.

8. If a franchisee prevails in an action against a franchisor under any provision of sections 407.810 to 407.835, then the franchisee shall also have a cause of action against the franchisor for damages and reasonable expenses of litigation, including, but not limited to, depositions, transcripts, expert witnesses, and attorney fees.

9. A franchisee may mail a demand for mediation to its franchisor at any time after it receives any notice from a franchisor as required by any provision of the MVFP act. In addition, prior to, contemporaneous with, or after the filing of a complaint with the administrative hearing commission, a franchisee may mail a demand for mediation to its franchisor for any violation by the franchisor of any provision of the MVFP act. The mailing of the demand for mediation is effective when mailed to the address shown on the notice from the franchisor, the address shown on the franchise agreement, the address of the franchisor shown on its license with the department of revenue, the address of the franchisor's registered agent in this state, or the address of its attorney in a proceeding pending at the administrative hearing commission concerning the subject of the demand for mediation. The demand for mediation shall contain a short statement of the dispute and the relief sought by the franchisee; however, the contents of the demand are not jurisdictional.

10. The mailing of a demand for mediation stays any time period for the franchisee to initiate any action under the MVFP act that is the subject of the dispute described in the demand for mediation. If the parties fail to resolve the matter in dispute after meeting with the mediator, then the time period for filing any action with the administrative hearing commission shall start on the first business day after the date of the last date of any meeting with the mediator.

11. If a proceeding is pending before the administrative hearing commission concerning the subject of the demand for mediation, the franchisee shall also file a copy of the demand for mediation with the administrative hearing commission. The filing of a copy of the demand for mediation with the administrative hearing commission shall stay any further action by the administrative hearing commission, other than the issuance of the order required of the administrative hearing commission under subsection 1 of this section informing the franchisor that it shall not proceed with the initiation of its activity or activities until the administrative hearing commission issues its final decision or order. If the matter is not resolved after the meeting with the mediator, then either party may inform the administrative hearing commission that the matter is not resolved and the administrative hearing commission shall issue its order terminating the stay of its proceeding.

12. Within five business days after the date of receipt of the demand for mediation, the franchisor shall contact the franchisee or its legal representative reflected in the demand for mediation to exchange suggested lists of mediators. The parties shall mutually accept a mediator within two business days after the date of exchanging suggested lists of mediators. If the parties cannot agree on a mediator, then the presiding judge in Cole County or in the circuit court for the county in which the franchisee does business shall appoint the mediator. Within twenty days after the receipt of the demand for mediation, the parties shall meet with the mediator for the purpose of attempting to resolve the dispute. The meeting shall take place in this state at a location designated by the mediator. The mediator may extend the date of the meeting upon the agreement of the parties or upon good cause shown by either party.

13. The director of revenue shall require each franchisor to establish and maintain a panel of mediators who may serve as mediators for disputes that may arise in this state with its franchisees.

(L. 1997 H.B. 516, A.L. 2001 H.B. 693, A.L. 2001 H.B. 575, A.L. 2010 H.B. 2198)



Unlawful practices.

407.825. Notwithstanding the terms of any franchise agreement to the contrary, the performance, whether by act or omission, by a motor vehicle franchisor, whether directly or indirectly through an agent, employee, affiliate, common entity, or representative, or through an entity controlled by a franchisor, of any or all of the following acts enumerated in this section are hereby defined as unlawful practices, the remedies for which are set forth in section 407.835:

(1) To engage in any conduct which is capricious or not in good faith or unconscionable and which causes damage to a motor vehicle franchisee or to the public; provided, that good faith conduct engaged in by motor vehicle franchisors as sellers of new motor vehicles or parts or as holders of security interest therein, in pursuit of rights or remedies accorded to sellers of goods or to holders of security interests pursuant to the provisions of chapter 400, uniform commercial code, shall not constitute unfair practices pursuant to sections 407.810 to 407.835;

(2) To coerce, attempt to coerce, require or attempt to require any motor vehicle franchisee to accept delivery of any new motor vehicle or vehicles, equipment, tools, parts or accessories therefor, or any other commodity or commodities which such motor vehicle franchisee has not ordered after such motor vehicle franchisee has rejected such commodity or commodities, or which is not required by law or the franchise agreement. It shall not be deemed a violation of this section for a motor vehicle franchisor to require a motor vehicle franchisee to have an inventory of parts, tools, and equipment reasonably necessary to service the motor vehicles sold by a motor vehicle franchisor; or new motor vehicles reasonably necessary to meet the demands of dealers or the public or to display to the public the full line of a motor vehicle franchisor's product line;

(3) To withhold, reduce, delay, or refuse to deliver in reasonable quantities and within a reasonable time after receipt of orders for new motor vehicles, such motor vehicles as are so ordered and as are covered by such franchise and as are specifically publicly advertised by such motor vehicle franchisor to be available for immediate delivery; provided, however, the failure to deliver any motor vehicle shall not be considered a violation of sections 407.810 to 407.835 if such failure is due to an act of God, work stoppage, or delay due to a strike or labor difficulty, shortage of products or materials, freight delays, embargo or other causes of which such motor vehicle franchisor shall have no control;

(4) To coerce, attempt to coerce, require or attempt to require any motor vehicle franchisee to enter into any agreement with such motor vehicle franchisor or its agent, employee, affiliate, or representative, or a person controlled by the franchisor or to do any other act prejudicial to such motor vehicle franchisee;

(5) To terminate, cancel, refuse to continue, or refuse to renew any franchise without good cause, unless such new motor vehicle franchisee, without good cause, substantially defaults in the performance of such franchisee's reasonable, lawful, and material obligations under such franchisee's franchise. In determining whether good cause exists, the administrative hearing commission shall take into consideration all relevant circumstances, including, but not limited to, the following factors:

(a) The amount of business transacted by the franchisee;

(b) The investments necessarily made and obligations incurred by the franchisee, including but not limited to goodwill, in the performance of its duties under the franchise agreement, together with the duration and permanency of such investments and obligations;

(c) The potential for harm and inconvenience to consumers as a result of disruption of the business of the franchisee;

(d) The franchisee's failure to provide adequate service facilities, equipment, parts, and qualified service personnel;

(e) The franchisee's failure to perform warranty work on behalf of the manufacturer, subject to reimbursement by the manufacturer;

(f) The franchisee's failure to substantially comply, in good faith, with requirements of the franchise that are determined to be reasonable, lawful, and material;

(g) The franchisor's failure to honor its requirements under the franchise;

(h) The potential harm to the area that the franchisee serves;

(i) The demographic and geographic characteristics of the area the franchisee serves; and

(j) The harm to the franchisor;

(6) To prevent by contract or otherwise, any motor vehicle franchisee from changing the capital structure of the franchisee's franchise or the means by or through which the franchisee finances the operation of the franchisee's franchise, provided the motor vehicle franchisee at all times meets any reasonable capital standards agreed to between the motor vehicle franchisee and the motor vehicle franchisor and grants to the motor vehicle franchisor a purchase money security interest in the new motor vehicles, new parts and accessories purchased from the motor vehicle franchisor;

(7) (a) To prevent, by contract or otherwise, any sale or transfer of a franchisee's franchise or interest or management thereof; provided, if the franchise specifically permits the franchisor to approve or disapprove any such proposed sale or transfer, a franchisor shall only be allowed to disapprove a proposed sale or transfer if the interest being sold or transferred when added to any other interest owned by the transferee constitutes fifty percent or more of the ownership interest in the franchise and if the proposed transferee fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to its entering into a franchise, and which relate to the qualification, capitalization, integrity or character of the proposed transferee and which are reasonable. A franchisee or proposed franchisee may request, at any time, that the franchisor provide a copy of the standards which are normally relied upon by the franchisor to evaluate a proposed sale or transfer and a proposed transferee;

(b) The franchisee and the prospective franchisee shall cooperate with the franchisor in providing information relating to the prospective transferee's qualifications, capitalization, integrity and character;

(c) In the event of a proposed sale or transfer of a franchise, the franchisor shall be permitted to exercise a right of first refusal to acquire the franchisee's assets or ownership if:

a. The franchise agreement permits the franchisor to exercise a right of first refusal to acquire the franchisee's assets or ownership in the event of a proposed sale or transfer;

b. Such sale or transfer is conditioned upon the franchisor or franchisee entering a franchise agreement with the proposed transferee;

c. The exercise of the right of first refusal shall result in the franchisee and the franchisee's owners receiving the same or greater consideration and the same terms and conditions as contracted to receive in connection with the proposed sale or transfer;

d. The sale or transfer does not involve the sale or transfer to an immediate member or members of the family of one or more franchisee owners, defined as a spouse, child, grandchild, spouse of a child or grandchild, brother, sister or parent of the franchisee owner, or to the qualified manager, defined as an individual who has been employed by the franchisee for at least two years and who otherwise qualifies as a franchisee operator, or a partnership or corporation controlled by such persons; and

e. The franchisor agrees to pay the reasonable expenses, including attorney's fees which do not exceed the usual, customary and reasonable fees charged for similar work done for other clients, incurred by the proposed transferee prior to the franchisor's exercise of its right of first refusal in negotiating and implementing the contract for the proposed sale or transfer of the franchise or the franchisee's assets. Notwithstanding the foregoing, no payment of such expenses and attorney's fees shall be required if the franchisee has not submitted or caused to be submitted an accounting of those expenses within fourteen days of the franchisee's receipt of the franchisor's written request for such an accounting. Such accounting may be requested by a franchisor before exercising its right of first refusal;

(d) For determining whether good cause exists for the purposes of this subdivision, the administrative hearing commission shall take into consideration all relevant circumstances, including, but not limited to, the following factors:

a. Whether the franchise agreement specifically permits the franchisor to approve or disapprove any proposed sale or transfer;

b. Whether the interest to be sold or transferred when added to any other interest owned by the proposed transferee constitutes fifty percent or more of the ownership interest in the franchise;

c. Whether the proposed transferee fails to satisfy the standards of the franchisor which are in fact normally relied upon by the franchisor prior to its entering into a franchise, and which related to the qualification, capitalization, integrity or character of the proposed transferee and which are lawful and reasonable;

d. The amount of business transacted by the franchisee;

e. The investments and obligations incurred by the franchisee, including but not limited to goodwill, in the performance of its duties under the franchise agreement, together with the duration and permanency of such investments and obligations;

f. The investments and obligations that the proposed transferee is prepared to make in the business;

g. The potential for harm and inconvenience to consumers as a result of the franchisor's decision;

h. The franchisor's failure to honor its requirements under the franchise;

i. The potential harm to the area that the franchisee serves;

j. The ability or willingness of the franchisee to continue in the business if the proposed transfer is not permitted;

k. The demographic and geographic characteristics of the area the franchisee serves; and

l. The harm to the franchisor;

(8) To prevent by contract or otherwise any motor vehicle franchisee from changing the executive management of the motor vehicle franchisee's business, unless the motor vehicle franchisor demonstrates that such change in executive management will be detrimental to the distribution of the motor vehicle franchisor's motor vehicles;

(9) To impose unreasonable standards of performance upon a motor vehicle franchisee or to require, attempt to require, coerce or attempt to coerce a franchisee to adhere to performance standards that are not applied uniformly to other similarly situated franchisees;

(10) To require, attempt to require, coerce, or attempt to coerce a motor vehicle franchisee at the time of entering into a franchise or any other arrangement to assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by sections 407.810 to 407.835;

(11) To prohibit directly or indirectly the right of free association among motor vehicle franchisees for any lawful purpose;

(12) To provide any term or condition in any lease or other agreement ancillary or collateral to a franchise, including, but not limited to, any agreement with a common entity or any person required by the franchisor or controlled by or affiliated with the franchisor, which term or condition directly or indirectly violates the provisions of sections 407.810 to 407.835;

(13) Upon any termination, cancellation, refusal to continue, or refusal to renew any franchise or any discontinuation of any line-make or parts or products related to such line-make, failing to pay reasonable compensation to a franchisee as follows:

(a) The franchisee's net acquisition cost for any new, undamaged and unsold vehicle in the franchisee's inventory of either the current model year or one year-prior model year purchased from the franchisor or another franchisee of the same line-make in the ordinary course of business prior to receipt of a notice of termination or nonrenewal, provided the vehicle has less than seven hundred fifty miles registered on the odometer, including mileage incurred in delivery from the franchisor or in transporting the vehicle between dealers for sale;

(b) The franchisee's cost of each new, unused, undamaged and unsold part or accessory if the part or accessory is in the current parts catalog, less applicable allowances. In the case of sheet metal, a comparable substitute for the original package may be used. Reconditioned or core parts shall be valued at their core value, the price listed in the current parts catalog or the amount paid for expedited return of core parts, whichever is higher. If the part or accessory was purchased by the franchisee from an outgoing authorized franchisee, the franchisor shall purchase the part or accessory for the price in the current parts catalog. In the case of parts or accessories which no longer appear in the current parts catalog, the franchisor shall purchase the parts or accessories for the price in the last version of the parts catalog in which the part or accessory appeared;

(c) The fair market value of each undamaged sign owned by the franchisee which bears a trademark or trade name used or claimed by the franchisor if the sign was purchased from, or purchased at the request of, the franchisor. During the first seven years after its purchase, the fair market value of each sign shall be the franchisee's costs of purchasing the sign, less depreciation, using straight-line depreciation and a seven-year life of the asset;

(d) The fair market value of all equipment, tools, data processing programs and equipment and automotive service equipment owned by the franchisee which were recommended in writing and designated as equipment, tools, data processing programs and equipment, and automotive service equipment and purchased from, or purchased at the request of, the franchisor, if the equipment, tools, programs and equipment are in usable and good condition, except for reasonable wear and tear. During the first seven years after their purchase, the fair market value of each item of equipment, tools, and automotive service equipment shall be the franchisee's costs of purchasing the item, less depreciation, using straight-line depreciation and a seven-year life of the asset. During the first three years after its purchase, the fair market value of each item of required data processing programs and equipment shall be the franchisee's cost of purchasing the item, less depreciation, using straight-line depreciation and a three-year life of the asset;

(e) In addition to the costs referenced in paragraphs (a) to (d) of this subdivision, the franchisor shall pay the franchisee an additional five percent for handling, packing, storing and loading of any property subject to repurchase pursuant to this section, and the franchisor shall pay the shipper for shipping the property subject to repurchase from the location of the franchisee to the location directed by the franchisor;

(f) The amount remaining to be paid on any equipment or service contracts required by or leased from the franchisor or a subsidiary or company affiliated with or controlled or recommended by the franchisor. However, if the franchise agreement is voluntarily terminated by the franchisee, without coercion by the franchisor, then:

a. If the amount remaining to be paid on any equipment or service contract is owed to the franchisor, the franchisor shall cancel the obligation rather than paying the amount to the franchisee; and

b. If the amount remaining to be paid on any equipment or service contract is owed to a subsidiary or a company affiliated with or controlled or recommended by the franchisor, the franchisor may pay such amount to the subsidiary or the company affiliated with or controlled by the franchisor, but if the franchisor does not pay such amount to the subsidiary or the company affiliated with or controlled by the franchisor, such amount may be paid to the franchisee by the subsidiary or company affiliated with or controlled by the franchisor;

(g) If the dealer leases the dealership facilities, then the franchisor shall be liable for twelve months' payment of the gross rent or the remainder of the term of the lease, whichever is less. If the dealership facilities are not leased, then the franchisor shall be liable for the equivalent of twelve months' payment of gross rent. This paragraph shall not apply when the termination, cancellation, or nonrenewed line was under good cause related to a conviction and imprisonment for a felony involving moral turpitude that is substantially related to the qualifications, function, or duties of a franchisee as well as fraud and voluntary terminations of a franchise. Gross rent is the monthly rent plus the monthly cost of insurance and taxes. Such reasonable rent shall be paid only to the extent that the dealership premises are recognized in the franchise and only if they are used solely for performance in accordance with the franchise and not substantially in excess of those facilities recommended by the manufacturer or distributor. If the facility is used for the operations of more than one franchise, the gross rent compensation shall be adjusted based on the planning volume and facility requirements of the manufacturers, distributors, or branch or division thereof;

(h) The franchisor shall pay to the franchisee the amount remaining to be paid on any leases of computer hardware or software that is used to manage and report data to the manufacturer or distributor for financial reporting requirements and the amount remaining to be paid on any manufacturer or distributor required equipment leases, service contracts, and sign leases. The franchisor's obligation shall not exceed one year on any such lease. However, if the franchise agreement is voluntarily terminated by the franchisee, without coercion by the franchisor, then:

a. If the amount remaining to be paid is owed to the franchisor, the franchisor shall cancel the obligation rather than paying the amount to the franchisee; and

b. If the amount remaining to be paid is owed to a subsidiary or a company affiliated with or controlled or recommended by the franchisor, the franchisor may pay such amount to the subsidiary or the company affiliated with or controlled by the franchisor, subject to the limit of the franchisor's one-year obligation, but if the franchisor does not pay such amount to the subsidiary or the company affiliated with or controlled by the franchisor, such amount may be paid to the franchisee by the subsidiary or company affiliated with or controlled by the franchisor, subject to the limit of the franchisor's one-year obligation;

(i) In addition to the other payments set forth in this section, if a termination, cancellation, or nonrenewal is premised upon the franchisor discontinuing the sale in this state of a line-make that was the subject of the franchise, then the franchisor shall also be liable to the franchisee for an amount at least equivalent to the fair market value of the franchisee's goodwill for the discontinued line-makes of the motor vehicle franchise on the date immediately preceding the date the franchisor announces the action which results in termination, cancellation, or nonrenewal, whichever amount is higher. At the franchisee's option, the franchisor may avoid paying fair market value of the motor vehicle franchise to the franchisee under this paragraph if the franchisor, or another motor vehicle franchisor under an agreement with the franchisor, offers the franchisee a replacement motor vehicle franchise with terms substantially similar to that offered to other same line-make dealers;

(j) The franchisor shall pay the franchisee all amounts incurred by the franchisee to upgrade its facilities that were required by the franchisor within twelve months prior to receipt of a notice of termination or nonrenewal; however, a franchisee shall not receive any benefits under this subdivision if it was terminated for the grounds set forth in subdivision (1) of subsection 4 of section 407.822. However, if the franchise agreement is voluntarily terminated by the franchisee, without coercion by the franchisor, and for a reason other than the death or incapacitation of the dealer principal, then the franchisor shall have no obligation under this paragraph; and

(k) The franchisor shall pay the franchisee the amounts specified in this subdivision along with any other amounts that may be due to the franchisee under the franchise agreement within sixty days after the tender of the property subject to the franchisee providing evidence of good and clear title upon return of the property to the franchisor. The franchisor shall remove the property within sixty days after the tender of the property from the franchisee's property. Unless previous arrangements have been made and agreed upon, the franchisee is under no obligation to provide insurance for the property left after sixty days;

(l) This subdivision shall not apply to a termination, cancellation or nonrenewal due to a sale of the assets or stock of the motor vehicle dealership;

(14) To prevent or refuse to honor the succession to a franchise or franchises by any legal heir or devisee under the will of a franchisee, under any written instrument filed with the franchisor designating any person as the person's successor franchisee, or pursuant to the laws of descent and distribution of this state; provided:

(a) Any designated family member of a deceased or incapacitated franchisee shall become the succeeding franchisee of such deceased or incapacitated franchisee if such designated family member gives the franchisor written notice of such family member's intention to succeed to the franchise or franchises within one hundred twenty days after the death or incapacity of the franchisee, and agrees to be bound by all of the lawful terms and conditions of the current franchise agreement, and the designated family member meets the current lawful and reasonable criteria generally applied by the franchisor in qualifying franchisees. In order for the franchisor to claim that any such reasonable criteria are generally applied by the franchisor in qualifying franchisees, it shall have previously provided a copy to the proposed successor franchisee within ten days after receiving the proposed successor franchisee's notice. A franchisee may request, at any time, that the franchisor provide a copy of such criteria generally applied by the franchisor in qualifying franchisees;

(b) The franchisor may request from a designated family member such personal and financial data as is reasonably necessary to determine whether the existing franchise agreement should be honored. The designated family member shall supply the personal and financial data promptly upon the request;

(c) If the designated family member does not meet the reasonable and lawful criteria generally applied by the franchisor in qualifying franchisees, the discontinuance of the current franchise agreement shall take effect not less than ninety days after the date the franchisor serves the required notice on the designated family member pursuant to subsection 4 of section 407.822;

(d) The provisions of this subdivision shall not preclude a franchisee from designating any person as the person's successor by written instrument filed with the franchisor, and if such an instrument is filed, it alone shall determine the succession rights to the management and operation of the franchise; and

(e) For determining whether good cause exists, the administrative hearing commission shall take into consideration all circumstances, including, but not limited to, the following factors:

a. Whether the franchise agreement specifically permits the franchisor to approve or disapprove any successor;

b. Whether the proposed successor substantially fails to satisfy the material standards of the franchisor which are in fact normally relied upon by the franchisor prior to the successor entering into a franchise, and which relate to the proposed management or ownership of the franchise operation or to the qualification, capitalization, integrity or character of the proposed successor and which are lawful and reasonable;

c. The amount of the business transacted by the franchisee;

d. The investments in and the obligations incurred by the franchisee, including but not limited to goodwill in the performance of its duties under the franchise agreement, together with the duration and permanency of such investments and obligations;

e. The investments and obligations that the proposed successor franchisee is prepared to make in the business;

f. The potential for harm and inconvenience to consumers as a result of the franchisor's decision;

g. The franchisor's failure to honor its requirements under the franchise;

h. The potential harm and injury to the public welfare in the area that the franchisee serves;

i. The ability or willingness of the franchisee to continue in the business if the proposed transfer is not permitted;

j. The demographic and geographic characteristics of the area the franchisee serves; and

k. The harm to the franchisor;

(15) To coerce, attempt to coerce, require, or attempt to require a franchisee under any condition affecting or related to a franchise agreement, to waive, limit or disclaim a right that the franchisee may have pursuant to the provisions of sections 407.810 to 407.835. Any contracts or agreements which contain such provisions shall be deemed against the public policy of the state of Missouri and are void and unenforceable. Nothing in this section shall prohibit voluntary settlement agreements that specifically identify* the provisions of sections 407.810 to 407.835 that the franchisee is waiving, limiting, or disclaiming;

(16) To initiate any act enumerated in this section on grounds that it has advised a franchisee of its intention to discontinue representation at the time of a franchisee change or require any franchisee to enter into a site control agreement as a condition to initiating any act enumerated in this section. Such condition shall not be construed to nullify an existing site control agreement for a franchisee's property;

(17) To require, attempt to require, coerce, or attempt to coerce any franchisee in this state to refrain from, or to terminate, cancel, or refuse to continue any franchise based upon participation by the franchisee in the management of, investment in or the acquisition of a franchise for the sale of any other line of new vehicle or related products in the same or separate facilities as those of the franchisor. This subdivision does not apply unless the franchisee maintains a reasonable line of credit for each make or line of new vehicle, the franchisee remains in compliance with the franchise and any reasonable facilities requirements of the franchisor, and no change is made in the principal management of the franchisee. The reasonable facilities requirement shall not include any requirement that a franchisee establish or maintain exclusive facilities, personnel, or display space, when such requirements would not otherwise be justified by reasonable business considerations. Before the addition of a line-make to the dealership facilities the franchisee shall first request consent of the franchisor, if required by the franchise agreement. Any decision of the franchisor with regard to dualing of two or more franchises shall be granted or denied within sixty days of a written request from the franchisee. The franchisor's failure to respond timely to a dualing request shall be deemed to be approval of the franchisee's request;

(18) To fail or refuse to offer to sell to all franchisees for a line-make reasonable quantities of every motor vehicle sold or offered for sale to any franchisee of that line-make; however, the failure to deliver any such motor vehicle shall not be considered a violation of this section if the failure is due to a cause over which the franchisor has no control. A franchisor may impose reasonable requirements on the franchisee including, but not limited to, the purchase of reasonable quantities of advertising materials, the purchase of special tools required to properly service a motor vehicle, the undertaking of sales person or service person training related to the motor vehicle, the meeting of reasonable display and facility requirements as a condition of receiving a motor vehicle, or other reasonable requirements; provided, that if a franchisor requires a franchisee to purchase essential service tools with a purchase price in the aggregate of more than seventy-five hundred dollars in order to receive a particular model of new motor vehicle, the franchisor shall upon written request provide such franchisee with a good faith estimate in writing of the number of vehicles of that particular model that the franchisee will be allocated during that model year in which the tools are required to be purchased;

(19) To directly or indirectly condition the awarding of a franchise to a prospective franchisee, the addition of a line-make or franchise to an existing franchisee, the renewal of a franchise of an existing franchisee, the approval of the relocation of an existing franchisee's facility, or the approval of the sale or transfer of the ownership of a franchise on the willingness of a franchisee, proposed franchisee, or owner of an interest in the dealership facility to enter into a site control agreement or exclusive use agreement. For purposes of this subdivision, the terms "site control agreement" and "exclusive use agreement" include any agreement that has the effect of either requiring that the franchisee establish or maintain exclusive dealership facilities or restricting the ability of the franchisee, or the ability of the franchisee's lessor in the event the dealership facility is being leased, to transfer, sell, lease, or change the use of the dealership premises, whether by sublease, lease, collateral pledge of lease, right of first refusal to purchase or lease, option to purchase, option to lease, or other similar agreement, regardless of the parties to such agreement. Any provision contained in any agreement entered into on or after August 28, 2010, that is inconsistent with the provisions of this subdivision shall be voidable at the election of the affected franchisee, prospective franchisee, or owner of an interest in the dealership facility, provided this subdivision shall not apply to a voluntary agreement where separate, adequate, and reasonable consideration have been offered and accepted;

(20) Except for the grounds listed in subdivision (1) of subsection 4 of section 407.822, prior to the issuance of any notice of intent to terminate a franchise agreement under the MVFP act for unsatisfactory sales or service performance, the franchisor shall provide the franchisee with no less than one hundred twenty days written notice of the specific asserted grounds for termination. Thereafter, the franchisee shall have one hundred twenty days to cure the asserted grounds for termination, provided the grounds are both reasonable and of material significance to the franchise relationship. If the franchisee fails to cure the asserted grounds for termination by the end of the cure period, then the franchisor may give the sixty-day notice required by subsection 4 of section 407.822 if it intends to terminate the franchise;

(21) To require, attempt to require, coerce, or attempt to coerce a franchisee, by franchise agreement or otherwise, or as a condition to the renewal or continuation of a franchise agreement, to:

(a) Exclude from the use of the franchisee's facilities a line-make for which the franchisee has a franchise agreement to utilize the facilities; or

(b) Materially change the franchisee's facilities or method of conducting business if the change would impose substantial or unreasonable financial hardship on the business of the franchisee;

(22) To fail to perform or cause to be performed any written warranties made with respect to any motor vehicle or parts thereof;

(23) To withhold, reduce, or delay unreasonably or without just cause services contracted for by franchisees;

(24) To coerce, attempt to coerce, require, or attempt to require any franchisee to provide installment financing with a specified financial institution;

(25) To require, attempt to require, coerce, or attempt to coerce any franchisee to close or change the location of the franchisee, or to make any substantial alterations to the franchise premises or facilities when doing so would be unreasonable under the current market and economic conditions. Prior to suggesting the need for any such action, the franchisor shall provide the franchisee with a written good faith estimate of the minimum number of the models of new motor vehicles that the franchisor will supply to the franchisee during a reasonable time period, not less than three years, so the franchisee may determine if it is a sufficient supply of motor vehicles so as to justify such changes, in light of the current market and reasonably foreseeable projected and economic conditions. A franchisor or its common entity or an entity controlled by or affiliated with the franchisor may not take or threaten to take any action that is unfair or adverse to a franchisee who does not enter into an agreement with the franchisor under this subdivision. This subdivision does not affect any contract between a franchisor and any of its franchisees regarding relocation, expansion, improvement, remodeling, renovation, or alteration which exists on August 28, 2010;

(26) To authorize or permit a person to perform warranty service repairs on motor vehicles unless the person is a franchisee with whom the manufacturer has entered into a franchise agreement for the sale and service of the manufacturer's motor vehicles unless for emergency repairs when a franchisee is not available or repairs pursuant to a fleet contract as long as all parts and labor to perform the repairs are less than one thousand five hundred dollars at retail per repaired vehicle;

(27) To discriminate between or refuse to offer to its same line-make franchisees all models manufactured for that line-make based upon unreasonable sales and service standards;

(28) To fail to make practically available any incentive, rebate, bonus, or other similar benefit to a franchisee that is offered to another franchisee of the same line-make within this state;

(29) To condition a franchise agreement on improvements to a facility unless reasonably required by the technology of a motor vehicle being sold at the facility;

(30) To condition the sale, transfer, relocation, or renewal of a franchise agreement, or to condition sales, services, parts, or finance incentives, upon site control or an agreement to renovate or make improvements to a facility; except that voluntary acceptance of such conditions by the franchisee shall not constitute a violation;

(31) Failing to offer to all of its franchisees of the same line-make any consumer rebates, dealer incentives, price or interest rate reduction, or finance terms that the franchisor offers or advertises, or allows its franchisees of the same line-make to offer or advertise;

(32) Offering rebates, cash incentives, or other promotional items for the sale of a vehicle by its franchisees unless: the same rebate, cash incentive, or promotion is offered to all of its franchisees of the same line-make; and any rebate, cash incentive, or promotion that is based on the sale of an individual vehicle is not increased for meeting a performance standard;

(33) Unreasonably discriminating among its franchisees in any program that provides assistance to its franchisees, including internet listings, sales leads, warranty policy adjustments, marketing programs, and dealer recognition programs;

(34) To fail to include in any franchise with a franchisee the following language: "If any provision herein contravenes the laws or regulations of any state or other jurisdiction wherein this agreement is to be performed, or denies access to the procedures, forums, or remedies provided for by such laws or regulations, such provision shall be deemed to be modified to conform to such laws or regulations, and all other terms and provisions shall remain in full force," or words to that effect;

(35) To withhold, reduce, or delay unreasonably or without just cause delivery of motor vehicle parts and accessories, commodities, or moneys due franchisees;

(36) To use or consider the performance of a franchisee relating to the sale of the franchisor's vehicles or the franchisee's ability to satisfy any minimum sales or market share quota or responsibility relating to the sale of the new vehicles in determining:

(a) The franchisee's eligibility to purchase program, certified, or other used motor vehicles from the franchisor;

(b) The volume, type, or model of program, certified, or other used motor vehicles that a franchisee is eligible to purchase from the franchisor;

(c) The price of any program, certified, or other used motor vehicle that the franchisee purchased from the franchisor; or

(d) The availability or amount of any discount, credit, rebate, or sales incentive that the franchisee is eligible to receive from the franchisor, for the purpose of any program, certified, or other used motor vehicle offered for sale by the franchisor;

(37) To refuse to allocate, sell, or deliver motor vehicles; to charge back or withhold payments or other things of value for which the franchisee is otherwise eligible under a sales promotion, program, or contest; to prevent a franchisee from participating in any promotion, program, or contest; or to take or threaten to take any adverse action against a franchisee, including charge-backs, reducing vehicle allocations, or terminating or threatening to terminate a franchise because the franchisee sold or leased a motor vehicle to a customer who exported the vehicle to a foreign country or who resold the vehicle, unless the franchisor proves that the franchisee knew or reasonably should have known that the customer intended to export or resell the motor vehicle. There is a rebuttable presumption that the franchisee neither knew nor reasonably should have known of its customer's intent to export or resell the vehicle if the vehicle is titled or registered in any state in this country. A franchisor may not take any action against a franchisee, including reducing its allocations or supply of motor vehicles to the franchisee, or charging back a franchisee for an incentive payment previously paid, unless the franchisor first meets in person, by telephone, or video conference with an officer or other designated employee of the franchisee. At such meeting, the franchisor shall provide a detailed explanation, with supporting documentation, as to the basis for its claim that the franchisee knew or reasonably should have known of the customer's intent to export or resell the motor vehicle. Thereafter, the franchisee shall have a reasonable period, commensurate with the number of motor vehicles at issue, but not less than fifteen days, to respond to the franchisor's claims. If, following the franchisee's response and completion of all internal dispute resolution processes provided through the franchisor, the dispute remains unresolved, the franchisee may file a complaint with the administrative hearing commission within thirty days after receipt of a written notice from the franchisor that it still intends to take adverse action against the franchisee with respect to the motor vehicles still at issue. If a complaint is timely filed, the administrative hearing commission shall notify the franchisor of the filing of the complaint, and the franchisor shall not take any action adverse to the franchisee until the administrative hearing commission renders a final determination, which is not subject to further appeal, that the franchisor's proposed action is in compliance with the provisions of this subdivision. In any hearing under this subdivision, the franchisor has the burden of proof on all issues raised by this subdivision;

(38) To require a franchisee to provide its customer lists or service files to the franchisor, unless necessary for the sale and delivery of a new motor vehicle to a consumer, to validate and pay consumer or dealer incentives, for reasonable marketing purposes or for the submission to the franchisor for any services supplied by the franchisee for any claim for warranty parts or repairs. Nothing in this section shall limit the franchisor's ability to require or use customer information to satisfy any safety or recall notice obligation;

(39) To mandate the use by the franchisee, or condition access to any services offered by the franchisor on the franchisee's use, or condition the acceptance of an order of any product or service offered by the franchisor on the franchisee's use, or condition the acceptance of any claim for payment from the franchisee on the franchisee's use, or condition the franchisee's participation in any program offered by the franchisor, a common entity or an entity controlled by the franchisor on the franchisee's use of any form, equipment, part, tool, furniture, fixture, data processing program or equipment, automotive service equipment, or sign from the franchisor, a vendor recommended by the franchisor, a common entity or an entity controlled by the franchisor if the franchisee is able to obtain the identical or reasonably equivalent product from another vendor;

(40) Establishing any performance standard or program for measuring franchisee performance that may have a material impact on a franchisee that is not fair, reasonable, and equitable, or applying any such standard or program to a franchisee in a manner that is not fair, reasonable, and equitable. Within ten days of a request of a franchisee, a franchisor shall disclose in writing to the franchisee a description of how a performance standard or program is designed and all relevant information used in the application of the performance standard or program to that franchisee unless the information is available to the franchisee on the franchisor's website;

(41) Establishing or implementing a plan or system for the allocation, scheduling, or delivery of new motor vehicles, parts, or accessories to its franchisees that is not fair, reasonable, and equitable or modifying an existing plan or system so as to cause the plan or system to be unreasonable, unfair, or inequitable. Within ten days of any request of a franchisee, the franchisor shall disclose in writing to the franchisee the method and mode of distribution of that line-make among the franchisor's franchisees of the same line-make within the same metro area for franchisees located in a metropolitan area and within the county and contiguous counties of any franchisee not located in a metropolitan area; and

(42) To violate any other provision of the MVFP act that adversely impacts a franchisee.

(L. 1980 H.B. 1600 4, A.L. 1997 H.B. 516, A.L. 2001 H.B. 575, A.L. 2010 H.B. 2198)

*Word "identifies" appears in original rolls.



New motor vehicle dealership, restrictions on operation of or ownership by a franchisor.

407.826. 1. (1) A franchisor shall be prohibited from owning or operating a new motor vehicle dealership in this state. It is not a violation of this section for a franchisor to own or operate a new motor vehicle dealership:

(a) For a temporary period of not more than twenty-four months if the dealership is for sale at a reasonable price and on reasonable terms and conditions to an independent qualified buyer. On showing by a franchisor of good cause, the time limit set forth above may be extended for an additional period of up to twelve months; or

(b) In a bona fide relationship with an independent person (i) who is required to make a significant investment in the new motor vehicle dealership subject to loss and (ii) operates the dealership and can reasonably expect to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions.

(2) Nothing in this section shall be deemed to prohibit a franchisor from owning a minority interest in an entity that owns motor vehicle dealerships of the same line-make manufactured and franchised by the factory, provided that all of the following conditions are met at the time of acquisition and continue to be met during the time the entity maintains ownership:

(a) The interest owned by the factory in said entity shall not exceed forty-five percent of the total ownership;

(b) Any dealership in which the entity owns an interest shall be no less than nine miles of any unaffiliated new motor vehicle dealership trading in the same line-make of vehicle;

(c) All of the licensed dealerships for the sale of such factory's new motor vehicle in the state trade exclusively in the factory's line-make;

(d) During any period in which the entity has such ownership interest, the factory shall have no more than four franchise agreements governing such line-make with dealers licensed to do business in this state;

(e) All the factory's franchise agreements confer rights on the franchisee of the line-make to develop and operate, within a defined geographic territory or area, as many dealership facilities as the franchisee and factory shall agree are appropriate;

(f) At the time the entity first acquires an ownership interest, not fewer than seventy-five percent of the franchisees of the line-make within this state own and operate two or more dealership facilities in the geographic territory or area covered by the franchise agreement with the factory;

(g) As of January 1, 2001, there were no more than ten dealerships of such line-make licensed as a new motor vehicle dealer in this state; and

(h) Prior to August 28, 2001, the factory has been continuously engaged, at least since July 1, 1998, in the retail sale of motor vehicles of its own line-make through direct or indirect ownership of dealerships in at least five states.

2. A franchisor shall not sell new motor vehicles directly to any retail consumer except through a franchisee for the line-make that includes the new motor vehicle unless such consumer is an employee of the franchisor, or is a not-for-profit organization or an agency of the federal, state or local governments. This subsection shall not preclude a franchisor from providing information to consumers for the purpose of marketing or facilitating the sale of a new motor vehicle or from establishing programs to sell or offer to sell new motor vehicles through participating franchisees.

3. The remedies and relief available pursuant to section 407.835 shall apply to this section.

(L. 2001 H.B. 575)



Duty of franchisor and franchisee, distribution of dealerships in St. Louis located to serve minorities.

407.827. When a franchised dealer or manufacturer proposes to establish or relocate a motor vehicle dealership within any city not within a county, the dealer or manufacturer shall make reasonable efforts to establish or relocate such dealership in an area within such city that improves the equitable distribution of dealerships within such city and is conveniently located to serve minorities who reside in such city.

(L. 1997 H.B. 516)



Franchisor's duties to franchisee--schedule of compensation--claims payment--retail rate calculation--audit authority.

407.828. 1. Notwithstanding any provision in a franchise to the contrary, each franchisor shall specify in writing to each of its franchisees in this state the franchisee's obligations for preparation, delivery, and warranty service on its products. The franchisor shall fairly and reasonably compensate the franchisee for preparation, delivery, and warranty service required of the franchisee by the franchisor. The franchisor shall provide the franchisee with the schedule of compensation to be paid to the franchisee for parts, labor, and service, and the time allowance for the performance of the labor and service for the franchisee's obligations for preparation, delivery, and warranty service.

2. The schedule of compensation shall include reasonable compensation for diagnostic work, as well as repair service and labor for the franchisee to meet its obligations for preparation, delivery, and warranty service. The schedule shall also include reasonable and adequate time allowances for the diagnosis and performance of preparation, delivery, and warranty service to be performed in a careful and professional manner. In the determination of what constitutes reasonable compensation for labor and service pursuant to this section, the principal factor to be given consideration shall be the prevailing wage rates being charged for similar labor and service by franchisees in the market in which the franchisee is doing business, and in no event shall the compensation of a franchisee for labor and service be less than the rates charged by the franchisee for similar labor and service to retail customers for nonwarranty labor and service, provided that such rates are reasonable. The primary factor in determining a fair and reasonable compensation for parts under this section shall be the prevailing amount charged for similar parts by other same line-make franchisees in the market in which the franchisee is doing business and the fair and reasonable compensation for parts shall not be less than the amount charged by the franchisee for similar parts to retail customers for nonwarranty parts, provided that such rates are reasonable. If another same line-make franchisee is not available within the market, then the prevailing amount charged for similar parts by other franchisees in the market shall be used as the primary factor.

3. A franchisor shall perform all warranty obligations, including recall notices; include in written notices of franchisor recalls to new motor vehicle owners and franchisees the expected date by which necessary parts and equipment will be available to franchisees for the correction of the defects; and reasonably compensate any of the franchisees in this state for repairs required by the recall. Reasonable compensation for parts, labor, and service shall be determined under subsection 2 of this section.

4. No franchisor shall require a franchisee to submit a claim authorized under this section sooner than thirty days after the franchisee completes the preparation, delivery, or warranty service authorizing the claim for preparation, delivery, or warranty service. All claims made by a franchisee under this section shall be paid within thirty days after their approval. All claims shall be either approved or disapproved by the franchisor within thirty days after their receipt on a proper form generally used by the franchisor and containing the usually required information therein. Any claims not specifically disapproved in writing within thirty days after the receipt of the form shall be considered to be approved and payment shall be made within fifteen days thereafter. A franchisee shall not be required to maintain defective parts for more than thirty days after submission of a claim.

5. A franchisor shall compensate the franchisee for franchisor-sponsored sales or service promotion events, including but not limited to, rebates, programs, or activities in accordance with established written guidelines for such events, programs, or activities, which guidelines shall be provided to each franchisee.

6. No franchisor shall require a franchisee to submit a claim authorized under subsection 5 of this section sooner than thirty days after the franchisee becomes eligible to submit the claim. All claims made by a franchisee pursuant to subsection 5 of this section for promotion events, including but not limited to rebates, programs, or activities shall be paid within ten days after their approval. All claims shall be either approved or disapproved by the franchisor within thirty days after their receipt on a proper form generally used by the franchisor and containing the usually required information therein. Any claim not specifically disapproved in writing within thirty days after the receipt of this form shall be considered to be approved and payment shall be made within ten days.

7. In calculating the retail rate customarily charged by the franchisee for parts, service, and labor, the following work shall not be included in the calculation:

(1) Repairs for franchisor, manufacturer, or distributor special events, specials, or promotional discounts for retail customer repairs;

(2) Parts sold at wholesale;

(3) Engine assemblies and transmission assemblies;

(4) Routine maintenance not covered under any retail customer warranty, such as fluids, filters, and belts not provided in the course of repairs;

(5) Nuts, bolts, fasteners, and similar items that do not have an individual part number;

(6) Tires; and

(7) Vehicle reconditioning.

8. If a franchisor, manufacturer, importer, or distributor furnishes a part or component to a franchisee, at no cost, to use in performing repairs under a recall, campaign service action, or warranty repair, the franchisor shall compensate the franchisee for the part or component in the same manner as warranty parts compensation under this section by compensating the franchisee at the average markup on the cost for the part or component as listed in the price schedule of the franchisor, manufacturer, importer, or distributor, less the cost for the part or component.

9. A franchisor shall not require a franchisee to establish the retail rate customarily charged by the franchisee for parts, service, or labor by an unduly burdensome or time-consuming method or by requiring information that is unduly burdensome or time consuming to provide, including, but not limited to, part-by-part or transaction-by-transaction calculations. A franchisee shall not request a franchisor to approve a different labor rate or parts rate more than twice in one calendar year.

10. If a franchisee submits any claim under this section to a franchisor that is incomplete, inaccurate, or lacking any information usually required by the franchisor, then the franchisor shall promptly notify the franchisee, and the time limit to submit the claim shall be extended for a reasonable length of time, not less than five business days following notice by the franchisor to the franchisee, for the franchisee to provide the complete, accurate, or lacking information to the franchisor.

11. (1) A franchisor may only audit warranty, sales, or incentive claims and charge-back to the franchisee unsubstantiated claims for a period of twelve months following payment, subject to all of the provisions of this section. Furthermore, if the franchisor has good cause to believe that a franchisee has submitted fraudulent claims, then the franchisor may only audit suspected fraudulent warranty, sales, or incentive claims and charge-back to the franchisee fraudulent claims for a period of two years following payment, subject to all provisions of this section.

(2) A franchisor shall not require documentation for warranty, sales, or incentive claims more than twelve months after the claim was paid.

(3) Prior to requiring any charge-back, reimbursement, or credit against a future transaction arising out of an audit, the franchisor shall submit written notice to the franchisee along with a copy of its audit and the detailed reason for each intended charge-back, reimbursement, or credit. A franchisee may file a complaint with the administrative hearing commission within thirty days after receipt of any such written notice challenging such action. If a complaint is filed within the thirty days, then the charge-back, reimbursement, or credit shall be stayed pending a hearing and determination of the matter under section 407.822*. If the administrative hearing commission determines that any portion of the charge-back, reimbursement, or credit is improper, then that portion of the charge-back, reimbursement, or credit shall be void and not allowed.

(L. 2001 H.B. 575, A.L. 2010 H.B. 2198)

*Section number "408.822" appears in original rolls.



Missouri motor vehicle commission's duty to ensure minority-owned businesses in St. Louis.

407.829. The Missouri motor vehicle commission, in approving licenses for dealer franchises in any metropolitan statistical area with a population of more than one million inhabitants as defined by the federal Office of Management and Budget or its successor agency shall ensure that the community of dealer franchises shall reflect an adequate percentage of minority-owned businesses.

(L. 1997 H.B. 516)



Franchisor's defenses against action by franchisee.

407.830. It shall be a defense for a motor vehicle franchisor, to any action brought under sections 407.810 to 407.835 by a motor vehicle franchisee, if it be shown that such motor vehicle franchisee has failed to substantially comply with reasonable and lawful requirements imposed by the franchise and other agreements ancillary or collateral thereto, or if the motor vehicle franchisee, or any of its officers, have been convicted of a felony relevant to business honesty or business practices, or if the motor vehicle franchisee has ceased conducting its business or has abandoned the franchise, or is insolvent as that term is defined in subdivision (23) of section 400.1-201, or has filed a voluntary petition in bankruptcy, or has made an assignment for benefit of creditors, or has been the subject of an involuntary proceeding under the federal bankruptcy act or under any state insolvency law which is not vacated within twenty days from the institution thereof, or there has been an appointment of a receiver or other officer having similar powers for the motor vehicle franchisee or the motor vehicle franchisee's business who is not removed within twenty days from his appointment, or there has been a levy under attachment, execution or similar process which is not within ten days vacated or removed by payment or bonding, and it shall be a defense to any action brought under sections 407.810 to 407.835 that the complained of conduct by a motor vehicle franchisor was undertaken in good faith in pursuit of rights or remedies accorded to a motor vehicle franchisor as a seller of goods or a holder of a security interest under the provisions of chapter 400.

(L. 1980 H.B. 1600 5)



Indemnification and hold harmless requirements.

407.831. 1. Notwithstanding the terms of any franchise agreement to the contrary, each franchisor, including any successor manufacturer of that franchisor, shall indemnify and hold harmless each franchisee obtaining a new motor vehicle from the franchisor from and against any liability, including reasonable attorney's fees, expert witness fees, court costs, and other expenses incurred in the litigation, so long as such fees and costs are reasonable, that the franchisee may be subjected to by the purchaser of the vehicle because of damage to the motor vehicle that occurred before delivery of the vehicle to the franchisee and that was not disclosed in writing to the franchisee prior to delivery of the vehicle. This indemnity obligation of the franchisor applies regardless of whether the damage falls below the six percent threshold under subsection 2 of this section. The failure of the franchisor to indemnify and hold harmless the franchisee is a violation of this section.

2. If the cost of repairing damage to a new motor vehicle that occurs before delivery to the franchisee's location exceeds six percent of the manufacturer's suggested retail price, as measured by retail repair costs, the franchisee may reject or, if title has passed to the franchisee, require the franchisor who delivered the vehicle to repurchase the vehicle within ten business days after delivery, unless the damage occurred during shipment and the method of transportation, carrier, or transporter of the motor vehicle was designated by the franchisee. Upon repurchase, the franchisor shall be subrogated to all of the franchisee's rights against the carrier or transporter of the motor vehicle regarding damage. The cost of repairing glass, tires, bumpers, moldings, and audio equipment with identical manufacturer's original equipment shall not be included in determining the cost of repairing damage under this subsection.

(L. 2010 H.B. 2198)



False advertising, prohibition.

407.832. No franchisee or franchisor shall use any false, deceptive or misleading advertising.

(L. 1997 H.B. 516)



Modification of franchise prohibited, when--complaint procedure with administrative hearing commission, written decision required.

407.833. 1. Notwithstanding the term of any franchise to the contrary, a franchisor shall not modify a franchise during the term of the franchise or upon its renewal if the modification substantially and adversely affects the franchisee's rights, obligations, investment, or return on investment without giving ninety days written notice of the proposed modification to the franchisee unless the modification is required by law or court order. Within the ninety-day notice period the franchisee may file with the administrative hearing commission and serve upon the franchisor a complaint for a determination of whether there is good cause for permitting the proposed modification and whether the proposed modification violates any provision of the MVFP act. The administrative hearing commission shall promptly schedule a hearing and decide the matter. Multiple complaints pertaining to the same proposed franchise modification shall be consolidated for hearing. The proposed franchise modification shall not take effect pending the determination of the matter.

2. The burden of proof shall be on the franchisor, except that the burden of proof with regard to the factor set forth in subdivision (3) of this subsection shall be on the franchisee, and the administrative hearing commission may consider any relevant factor including:

(1) The reasons for the proposed modification;

(2) Whether the proposed modification is applied to or affects all franchisees in a nondiscriminating manner;

(3) The degree to which the proposed modification will have a substantial and adverse effect upon the franchisee's rights, investment, or return on investment;

(4) Whether the proposed modification is in the public interest;

(5) The degree to which the proposed modification is necessary to the orderly and profitable distribution of products by the franchisor;

(6) Whether the proposed modification is offset by other modifications beneficial to the franchisee;

(7) Whether the proposed modification violates any provision of the MVFP act.

3. The decision of the administrative hearing commission shall be in writing and shall contain findings of fact and a determination of whether there is good cause for permitting the proposed modification and whether the proposed modification violates any provision of the MVFP act. The administrative hearing commission shall deliver copies of the decision to the parties personally or by registered mail. If the administrative hearing commission determines that there is not good cause for permitting the proposed modification or that the proposed modification violates any provision of the MVFP act, then the franchisor shall not proceed with the proposed modification.

4. For purposes of this section, the term "modification" includes, but is not limited to, any change, amendment, supplement, deletion, addition, or replacement of any provision of the franchise.

(L. 2010 H.B. 2198)



Franchisee's right to action for damages, injunction, when--recovery of damages--dispute restrictions.

407.835. 1. Notwithstanding any provision of the franchise to the contrary, in addition to the administrative relief provided in sections 407.810 to 407.835, any franchisee may bring an action in any court of competent jurisdiction against a franchisor with whom the franchisee has a franchise, manufacturer, distributor, or importer for an act or omission which constitutes a violation of a franchise or the MVFP act to recover actual damages sustained by reason thereof, plus actual and reasonable expenses of litigation, including, but not limited to, depositions, transcripts, expert witnesses, and attorney fees, and, where appropriate, such franchisee shall be entitled to injunctive relief, but the remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law or equity.

2. In any action wherein a franchisor, manufacturer, distributor, or importer has been found liable in damages to any franchisee for a willful violation of a franchise or the MVFP act, then any franchisee so damaged shall be entitled to recover actual damages sustained thereby, plus actual and reasonable expenses of litigation, including, but not limited to, depositions, transcripts, expert witnesses, and attorney fees, and, where appropriate, such motor vehicle franchisee shall be entitled to injunctive relief, but the remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law or equity. In addition, a court or jury may award a franchisee punitive damages in such amount as it deems appropriate.

3. In the event of a dispute between a franchisee and a franchisor:

(1) At the option of the franchisee, venue of any civil action, other than a proceeding before the administrative hearing commission, shall be proper in the circuit court of Cole County or the circuit court in the judicial circuit where the franchisee resides or has its principal place of business;

(2) Missouri law shall govern the franchise and the dispute, both substantively and procedurally;

(3) No mandatory arbitration provision in any franchise shall be valid;

(4) No waiver of jury trial in any franchise shall be valid;

(5) No provision in any franchise providing for a franchisee to pay a franchisor's attorney fees, mediation costs, arbitration costs, or litigation costs shall be valid;

(6) No provision in any franchise providing for mediation, arbitration, or litigation to occur outside this state shall be valid; and

(7) Unless otherwise provided in the MVFP act, the franchisor shall have the burden of proving by a preponderance of the evidence that it has acted in good faith, that all required notices were given, that good cause exists for its actions, and that its actions were fair and reasonable giving due regard to the equities of the affected parties, except for the franchisee's damages and expenses of litigation.

(L. 1980 H.B. 1600 6, A.L. 1997 H.B. 516, A.L. 1998 H.B. 1055, A.L. 2010 H.B. 2198)



Definitions.

407.838. As used in sections 407.838 to 407.848, the following terms shall mean:

(1) "Farm equipment", equipment including, but not limited to, tractors, trailers, combines, tillage implements, bailers and other equipment including attachments and repair parts thereof used in the planting, cultivating, irrigation, harvesting and marketing of agricultural products, excluding self-propelled machines designed primarily for the transportation of persons or property on a street or highway;

(2) "Farm equipment manufacturer" or "manufacturer", any person, partnership, corporation, association or other form of business enterprise engaged in the manufacturing, assembly or wholesale distribution of farm equipment;

(3) "Farm equipment dealer", "farm equipment dealership" or "dealer", any person, partnership, corporation, association or other form of business enterprise engaged in the retail sale of farm equipment;

(4) "Dealership agreement", a written or oral agreement of definite or indefinite duration between a farm equipment manufacturer and a farm equipment dealer which provides for the rights and obligations of the parties with respect to the purchase or sale of farm equipment.

(L. 1987 S.B. 35)



Dealership agreement, termination--cancellation--failure to renew to be based on good cause--good cause defined.

407.840. No farm equipment manufacturer, directly or through any officer, agent or employee may terminate, cancel or fail to renew a dealership agreement or substantially change the competitive circumstances of a farm equipment dealership without good cause. Good cause means failure by a farm equipment dealer to substantially comply with essential and reasonable requirements imposed upon the dealer by the dealership agreement if such requirements are not different from those requirements imposed on other similarly situated dealers either by their terms or in the manner of their enforcement. In addition, good cause shall exist whenever:

(1) The farm equipment dealer has transferred an interest in the farm equipment dealership without the manufacturer's written consent, or there has been a withdrawal from the dealership of an individual proprietor, partner, major shareholder, or the manager of the dealership, or there has been a substantial reduction in interest of a partner or major stockholder without the written consent of the manufacturer;

(2) The farm equipment dealer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing, or there has been a closeout or sale of a substantial part of the dealer's assets related to the farm equipment dealership or there has been a commencement or dissolution or liquidation of the farm equipment dealership;

(3) There has been a change, without the prior written approval of the manufacturer, in the location of the dealer's principal place of business under the dealership agreement;

(4) The farm equipment dealer has defaulted under any chattel mortgage or other security agreement between the dealer and the farm equipment manufacturer, or there has been a revocation or discontinuance of any guarantee of the dealer's present or future obligations to the farm equipment manufacturer;

(5) The farm equipment dealer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned his* business;

(6) The farm equipment dealer has pleaded guilty to or has been convicted of a felony affecting the relationship between the dealer and manufacturer;

(7) The dealer has engaged in conduct which is injurious or detrimental to the dealer's customers or to the public welfare;

(8) The farm equipment dealer has consistently failed to meet the manufacturer's requirements for reasonable market penetration based on the manufacturer's experience in other comparable marketing areas.

(L. 1987 S.B. 35)

*Word "its" appears in original rolls.



Notice to dealer of cancellation, content--dealer has sixty days to rectify--exceptions.

407.842. Except as otherwise provided in this section, a farm equipment manufacturer shall provide a farm equipment dealer at least ninety days' prior written notice of termination, cancellation or nonrenewal of the dealership agreement. The notice shall state all reasons constituting good cause for termination, cancellation or nonrenewal and shall provide that the dealer has sixty days in which to cure any claimed deficiency. If the deficiency is rectified within sixty days, the notice shall be void. The notice and right to cure provisions under this section shall not apply if the reason for termination, cancellation or nonrenewal is for any reason set forth in subdivisions (1) to (8) of section 407.840.

(L. 1987 S.B. 35)



Farm equipment manufacturers, certain acts prohibited.

407.844. No farm equipment manufacturer shall:

(1) Coerce, or attempt to coerce, any farm equipment dealer to accept delivery of any farm equipment, parts or accessories therefor, which such farm equipment dealer has not voluntarily ordered;

(2) To condition or attempt to condition the sale of any farm equipment on a requirement that the farm equipment dealer also purchase any other goods or services but nothing contained in sections 407.838 to 407.848 shall prevent the farm equipment manufacturer from requiring the dealer to purchase all parts reasonably necessary to maintain the quality of operation in the field of any farm equipment used in the trade area;

(3) To coerce or attempt to coerce any farm equipment dealer into a refusal to purchase the farm equipment manufactured by another farm equipment manufacturer;

(4) To discriminate in the prices charged for farm equipment of like grade and quality sold by the farm equipment manufacturer to similarly situated farm equipment dealers, but nothing contained in sections 407.838 to 407.848 shall prevent differentials which make only due allowance for difference in the cost of manufacture, sale or delivery resulting from the differing methods or quantities in which such farm equipment is sold or delivered, by the farm equipment manufacturer.

(L. 1987 S.B. 35)



Law applicable to dealer's agreements, when.

407.846. The provisions of sections 407.838 to 407.848 shall apply to all dealership agreements now in effect and all other dealership agreements entered into or renewed after September 28, 1987.

(L. 1987 S.B. 35)



Damages in civil action or injunction for dealer against manufacturer, when.

407.848. If any farm equipment manufacturer violates any provision of sections 407.838 to 407.848, a farm equipment dealer may bring an action against such manufacturer in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the manufacturer's violation, together with the actual costs of the action, including reasonable attorneys fees, and the dealer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

(L. 1987 S.B. 35)



Definitions.

407.850. As used in sections 407.850 to 407.885, the following terms mean:

(1) "Current model", a model listed in the wholesaler's, manufacturer's or distributor's current sales manual or any supplements thereto;

(2) "Current net price", the price listed in the wholesaler's, manufacturer's or distributor's price list or catalogue in effect at the time the contract is cancelled or discontinued, less any applicable trade and cash discounts;

(3) "Inventory", equipment, implements, machinery, attachments and repair parts;

(4) "Net cost", the price the retailer actually paid for the merchandise to the wholesaler, manufacturer or distributor, plus freight from the wholesaler's, manufacturer's or distributor's location to the dealer's location;

(5) "Retailer", any person, firm or corporation engaged in the business of selling, repairing and retailing:

(a) Farm implements, machinery, attachments or repair parts;

(b) Industrial, maintenance and construction power equipment; or

(c) Outdoor power equipment used for lawn, garden, golf course, landscaping or grounds maintenance;

but shall not include retailers of petroleum and motor vehicles and related automotive care and replacement products normally sold by such retailers.

(L. 1982 H.B. 958 1, A.L. 1987 S.B. 35, A.L. 2000 H.B. 1142, A.L. 2002 H.B. 1348 merged with H.B. 2008)



Repurchase of farm machinery inventory on termination of dealership--repurchase amount credited to debt of retailers--interest to be paid on credit, when, rate.

407.855. Whenever any retailer enters into a written or oral contract with a wholesaler, manufacturer or distributor wherein the retailer agrees to maintain an inventory and the contract is terminated by the wholesaler, manufacturer, distributor, or retailer, or upon the retailer's retirement at sixty-two years of age or older, then the retailer may require the repurchase of the inventory as provided for in sections 407.850 to 407.885. In the event of the death of the retailer or the majority stockholder of a corporation operating as a retailer, the wholesaler, manufacturer or distributor shall repurchase the inventory as provided for in section 407.880. If the retailer has any outstanding debts to the wholesaler, manufacturer or distributor, then the repurchase amount may be credited to the retailer's account. All payments or allowances of credit due retailer shall be paid or credited within sixty days after the return of implements, machinery, attachments or repair parts. After sixty days all payments or allowances shall include interest at the rate stated in section 408.040.

(L. 1982 H.B. 958 2, A.L. 1985 H.B. 604, A.L. 1987 S.B. 35)



Reimbursement for warranty work performed by certain retail sellers of power equipment.

407.857. Retailers who sell and service industrial, maintenance and construction power equipment or outdoor power equipment as defined in section 407.850, and who do warranty repair work for a consumer under provisions of a manufacturer's express warranty, shall be reimbursed by the manufacturer for the warranty work at an hourly rate that is the same or greater than the hourly labor rate the retailer currently charges consumers for nonwarranty repair work.

(L. 2001 S.B. 462)



Inventory qualifying for repurchase--percentage to be paid--cost of transportation to warehouse to be paid by retailer--packing and loading, how paid--transferee of manufacturer or distributors, law to apply, when.

407.860. 1. The wholesaler, manufacturer or distributor shall repurchase that inventory previously purchased from him and held by the retailer at the date of termination of the contract. The provisions of sections 407.850 to 407.885 shall apply to the transferee of such wholesaler, manufacturer or distributor if such transferee acquired substantially all of the assets of such wholesaler, manufacturer or distributor. The wholesaler, manufacturer or distributor shall pay one hundred percent of the net cost of all new, unsold, undamaged and complete equipment, implements, machinery, and attachments and ninety-five percent of the current net price of all new, unused and undamaged repair parts. The retailer shall pay the cost of transportation to the nearest warehouse maintained by the wholesaler, manufacturer, or distributor, or to a mutually agreeable site. The wholesaler, manufacturer or distributor shall pay the retailer five percent of the current net price on all new, unused and undamaged repair parts returned to cover the cost of handling, packing and loading. The wholesaler, manufacturer or distributor shall have the option of performing the handling, packing and loading in lieu of paying the five percent for these services. The retailer shall pay the cost of transportation to the nearest warehouse maintained by the wholesaler, manufacturer, or distributor, or to a mutually agreeable site.

2. Upon payment of the repurchase amount to the retailer, the title and right of possession to the repurchased inventory shall transfer to the wholesaler, manufacturer or distributor.

(L. 1982 H.B. 958 3, A.L. 1987 S.B. 35, A.L. 2002 H.B. 1348 merged with H.B. 2008)



Repurchase not to affect security interest in inventory and to be subject to bulk sales law.

407.865. The provisions of sections 407.850 to 407.885 shall not be construed to affect in any way any security interest which any financial institution, person, wholesaler, manufacturer or distributor may have in the inventory of the retailer, and any repurchase under the provisions of sections 407.850 to 407.885 shall be subject to the provisions of the bulk sales law.

(L. 1982 H.B. 958 4, A.L. 1987 S.B. 35)



Inventory which does not qualify for repurchase.

407.870. The provisions of sections 407.850 to 407.885 shall not require the repurchase from a retailer of:

(1) Any repair part which because of its condition is not resalable as a new part without repackaging or reconditioning;

(2) Any inventory for which the retailer is unable to furnish evidence, satisfactory to the wholesaler, manufacturer or distributor, of title, free and clear of all claims, liens and encumbrances;

(3) Any inventory which the retailer desires to keep, provided the retailer has a contractual right to do so;

(4) Any equipment, implements, machinery, and attachments which are not in new, unused, undamaged, or complete condition;

(5) Any repair parts which are not in new, unused, or undamaged condition;

(6) Any equipment, implements, machinery or attachments which were purchased twenty-four months or more prior to notice of termination of the contract;

(7) Any inventory which was ordered by the retailer on or after the date of notification of termination of the contract;

(8) Any inventory which was acquired by the retailer from any source other than the wholesaler, manufacturer or distributor or transferee of such wholesaler, manufacturer or distributor unless such inventory was acquired from any source authorized or arranged by the manufacturer.

(L. 1982 H.B. 958 5, A.L. 1987 S.B. 35, A.L. 2000 H.B. 1142, A.L. 2002 H.B. 1348 merged with H.B. 2008)



Liability for failure to repurchase inventory.

407.875. If any wholesaler, manufacturer or distributor shall fail or refuse to repurchase any inventory as required by section 407.860, he shall be civilly liable for one hundred percent of the current net price of the inventory, plus any freight charges paid by the retailer, the retailer's attorney's fees, and court costs.

(L. 1982 H.B. 958 6)



Death of retailer or majority stockholder--option of surviving spouse or heir for repurchase of inventory, time limitation, exception.

407.880. In the event of the death of the retailer or the spouse of a surviving retailer if the retailer is operating as a tenancy by the entireties or the majority stockholder of a corporation operating as a retailer, the wholesaler, manufacturer or distributor shall, at the option of the surviving spouse or the heir or heirs, repurchase the inventory from the surviving spouse or the heir or heirs of the retailer or majority stockholder as if the wholesaler, manufacturer or distributor had terminated the contract. The surviving spouse or the heir or heirs shall have one year from the date of the death of the retailer or majority stockholder to exercise their options under sections 407.850 to 407.885. Nothing in sections 407.850 to 407.885 shall require the repurchase of any inventory if the surviving spouse or the heir or heirs and wholesaler, manufacturer or distributor enter into a new contract to operate the retail dealership.

(L. 1982 H.B. 958 7)



Application to existing contracts and future contracts.

407.885. The provisions of sections 407.850 to 407.885 shall apply to all valid contracts now in effect which have no expiration date and are continuing contracts, and all other contracts entered into or renewed after September 28, 1987. Any contract in force and effect on September 28, 1987, which by its own terms will terminate on a date subsequent thereto shall be governed by the law as it existed prior to September 28, 1987.

(L. 1982 H.B. 958 8, A.L. 1987 S.B. 35)



Manufacturer, wholesaler or distributor not to terminate contract except for good cause--good cause established, how.

407.895. Any manufacturer, wholesaler or distributor of outdoor power equipment used for lawn, garden, golf course, landscaping or grounds maintenance, and repair parts therefor, who enters into a written or parol contract with any person, firm, or corporation engaged in the business of selling and repairing outdoor power equipment used for lawn, garden, golf course, landscaping or grounds maintenance and repair parts therefor, whereby such retailer agrees to maintain a stock of parts or complete or whole machines or attachments, shall not terminate, cancel, or fail to renew any such contract without good cause. "Good cause" means failure by the retailer to substantially comply with essential and reasonable requirements imposed upon the retailer by the contract if such requirements are not different from those requirements imposed on other similarly situated retailers either by their terms or in the manner of their enforcement. In addition, good cause shall exist whenever:

(1) The retailer has transferred an interest in the retailer business without the manufacturer's, wholesaler's or distributor's written consent, or there has been a withdrawal from the retailer's business of an individual proprietor, partner, major shareholder, or the manager of the retailer's business, or there has been a substantial reduction in interest of a partner or major stockholder without the written consent of the manufacturer, wholesaler, or distributor;

(2) The retailer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing, or there has been a closeout or sale of a substantial part of the retailer's assets related to the retailer's business or there has been a commencement or dissolution or liquidation of the retailer's business;

(3) There has been a change, without the prior written approval of the manufacturer, wholesaler, or distributor, in the location of the retailer's principal place of business under the retailer's agreement with the manufacturer, wholesaler, or distributor;

(4) The retailer has defaulted under any chattel mortgage or other security agreement between the retailer and the manufacturer, wholesaler, or distributor, or there has been a revocation or discontinuance of any guarantee of the retailer's present or future obligations to the manufacturer, wholesaler, or distributor;

(5) The retailer has failed to operate in the normal course of business for seven consecutive days or has otherwise abandoned his business, except for reasonable and customary closures of business;

(6) The retailer has pleaded guilty to or has been convicted of a felony affecting the relationship between the retailer and the manufacturer, wholesaler, or distributor;

(7) The retailer has engaged in conduct which is injurious or detrimental to the retailer's customers or the public welfare;

(8) The retailer has consistently failed to meet the manufacturer's, wholesaler's or distributor's requirements for reasonable market penetration based on the manufacturer's, wholesaler's, or distributor's experience in other comparable marketing areas.

(L. 1989 S.B. 41 4)



Law to apply to successors in interest--not applicable, when--application to existing contracts and future contracts.

407.897. 1. The obligations of any wholesaler, manufacturer or distributor created by the provisions of sections 407.890 to 407.898 apply to any successor in interest or assignee of that wholesaler, manufacturer, or distributor. A successor in interest includes any purchaser of substantially all of the assets or over fifty percent of the stock, any surviving corporation resulting from a merger or liquidation, any receiver, or any trustee of the original wholesaler, manufacturer or distributor.

2. The provisions of sections 407.890 to 407.898 shall not apply to such manufacturer in the state of Missouri who employs less than fifty employees or to any distributor who distributes solely within the state of Missouri and who employs less than five employees for the two-year period prior to the dealer termination and shall apply to all contracts now in effect which have no expiration date and are continuing contracts and all other contracts entered into, amended, or renewed after August 31, 1989. Any contract in force and effect on September 1, 1989, which by its terms will terminate on a date subsequent thereto is governed by the law as it existed before September 1, 1989.

(L. 1989 S.B. 41 5, 6)



Civil action for unlawful termination of contract, authorized--costs and attorney fees recoverable.

407.898. If a manufacturer, wholesaler or distributor violates any provisions of sections 407.895 and 407.897, a retailer may bring an action against such manufacturer, wholesaler, or distributor in any court of competent jurisdiction for damages sustained by the retailer as a consequence of the violation, together with the actual costs of the action, including reasonable attorney fees, and the retailer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances. The remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

(L. 1989 S.B. 41 7)



Definitions.

407.900. As used in sections 407.900 to 407.910:

(1) The term "art dealer" means a person engaged in the business of selling fine arts. The term "art dealer" does not include any person engaged exclusively in the business of selling goods at public auction;

(2) The term "artist" means a person who creates fine art or, if such person is deceased, such person's heir, legatee, or personal representative;

(3) The term "consignment" means a transfer of the physical possession of fine art by the artist creating the fine art as consignor in which no title to, estate in, or right to possession of the fine art superior to that of the artist who is the consignor shall vest in the consignee, notwithstanding the consignee's power or authority to transfer and convey the title, and all of the rights and interests of the artist who is the consignor in and to such fine art to a third person;

(4) The term "creditors" includes, but is not limited to, those persons included in the definition of "creditor" in section 400.1-201;

(5) The term "fine arts" includes:

(a) Visual art such as paintings, sculptures, drawings, mosaics, or photographs;

(b) Calligraphy;

(c) Graphic art such as etchings, lithographs, offset prints, silk screens, and other works of a similar nature;

(d) Crafts, including any item made by an artist or craftsman through the use of clay, textiles, fibers, wood, metal, plastic, glass, ceramics, or similar materials;

(e) Works in mixed media such as collages or any combination of the art forms or media listed in paragraph (a), (b), (c), or (d) of this subdivision.

(L. 1984 S.B. 688 1)



Art delivered to art dealer for sale or exhibition deemed consignment, when, exception--written contract required, contents.

407.902. 1. Notwithstanding any custom, practice, or usage of the trade to the contrary, whenever an artist delivers, or causes to be delivered, a work of fine art of the artist's own creation to an art dealer in this state for the purpose of exhibition or sale, or both, on a commission, fee, or other basis of compensation, the delivery to and acceptance of such work of fine art by the art dealer from the artist shall constitute a consignment unless the delivery to the art dealer is pursuant to an outright sale for which the artist has received or receives, either prior to or upon delivery, full compensation for the work of fine art.

2. Whenever a consignee accepts a work of fine art from an artist for the purpose of sale or exhibition and sale to the public on a commission, fee, or other basis of compensation, there shall be a written contract or agreement between the artist who is the consignor and consignee which shall include, but need not be limited to, provisions that:

(1) The proceeds of the sale of the work of fine art shall be delivered to the artist who is the consignor at a schedule agreed upon by the artist who is the consignor and consignee;

(2) The consignee shall be responsible for the stated value of the work of fine art in the event of the loss of or damage to such work of fine art while it is in the possession of such consignee;

(3) The work of fine art shall only be sold by the consignee for an amount at least equal to the amount agreed upon by the artist who is the consignor in writing;

(4) The work of fine art may be used or displayed by the consignee or others only with prior written consent of the artist who is the consignor.

(L. 1984 S.B. 688 2)



Consignment, effect.

407.904. A consignment of a work of fine art shall result in all of the following:

(1) The art dealer, after receipt of the work of fine art, shall constitute an agent of the artist for the purpose of sale or exhibition of the consigned work of fine art within the state of Missouri;

(2) The work of fine art shall constitute property held in trust by the consignee for the benefit of the artist who is the consignor and shall not be subject to claim by a creditor of the consignee;

(3) The proceeds from the sale of the work of fine art shall constitute funds held in trust by the consignee for the benefit of the artist who is the consignor, and such proceeds shall first be applied to pay any balance due to the artist who is the consignor, unless the artist who is the consignor expressly agrees otherwise in writing.

(L. 1984 S.B. 688 3)



Art dealer is agent of artist--work of art and sale proceeds held in trust for artist, not subject to creditor of consignee.

407.905. A work of fine art received as a consignment from the artist who created the work of fine art shall remain trust property, notwithstanding the subsequent purchase thereof by the consignee directly or indirectly for the consignee's own account until the price is paid in full to the artist who is consignor. If such work is thereafter resold to a bona fide purchaser before the artist who is consignor has been paid in full, the proceeds of the resale received by the consignee shall constitute funds held in trust for the benefit of the artist who is consignor to the extent necessary to pay any balance still due to the artist who is consignor and such trusteeship shall continue until the fiduciary obligation of the consignee to the artist who is the consignor with respect to such transaction is discharged in full.

(L. 1984 S.B. 688 4)



Waiver of proceeds in trust by artist, requirements.

407.907. An artist who is a consignor may lawfully waive the provisions of subdivision (3) of section 407.904 if such waiver is clear, conspicuous, in writing, and signed by the artist who is the consignor. No waiver shall be valid with respect to the proceeds of a work of fine art initially received "on consignment" but subsequently purchased by the consignee directly or indirectly for his own account. No waiver shall inure to the benefit of the consignor's creditors in any manner which might be inconsistent with the rights under sections 407.900 to 407.910 of the artist who is the consignor.

(L. 1984 S.B. 688 5)



Contracts, prior to August 13, 1984, not affected, exceptions.

407.908. Sections 407.900 to 407.910 shall not apply to a written contract executed prior to August 13, 1984, unless either the parties agree by mutual written consent that sections 407.900 to 407.910 shall apply or such contract is extended or renewed after August 13, 1984. The provisions of sections 407.900 to 407.910 shall prevail over any conflicting or inconsistent provisions of chapter 400 affecting the subject matter of sections 407.900 to 407.910.

(L. 1984 S.B. 688 6)



Violations--punitive damage and costs authorized.

407.910. Any art dealer or creditor of an art dealer who violates any provision of sections 407.900 to 407.910 with intent to injure shall, in addition to the payment of all other damages and costs owed by him, pay to the artist involved punitive damages in an amount as may be determined by law and reasonable attorney's fees.

(L. 1984 S.B. 688 7)



Definitions.

407.911. As used in sections 407.911 to 407.915, the following terms mean:

(1) "Commission", compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the dollar amount of orders or sales, or as a specified amount per order or per sale;

(2) "Principal", a person, firm, corporation, partnership or other business entity, whether or not it has a permanent or fixed place of business in this state, and who:

(a) Manufactures, produces, imports, provides, or distributes a product or service for sale;

(b) Contracts with a sales representative to solicit orders for the product or service; and

(c) Compensates the sales representative, in whole or in part, by commission;

(3) "Sales representative", a person, firm, corporation, partnership, or other business entity who contracts with a principal to solicit orders and who is compensated, in whole or in part, by commission, but shall not include a person, firm, corporation, partnership, or other business entity who places orders or purchases for its own account for resale.

(L. 1989 S.B. 192 1 subsec. 1, A.L. 2005 S.B. 211)



Commission to become due, when--termination of employment, all commissions due, when.

407.912. 1. When a commission becomes due shall be determined in the following manner:

(1) The written terms of the contract between the principal and sales representative shall control;

(2) If there is no written contract, or if the terms of the written contract do not provide when the commission becomes due, or the terms are ambiguous or unclear, the commission shall be paid when the product or service is delivered and accepted by the purchaser or the principal receives satisfaction in full;

(3) If neither subdivision (1) nor (2) of this subsection can be used to clearly ascertain when the commission becomes due, then the commission shall be due on the date the principal accepts the order and receives satisfaction in full, unless the custom and usage prevalent in this state for the parties' particular industry is different, in which event such custom and usage shall prevail.

2. Nothing in sections 407.911 to 407.915 shall be construed to impair a sales representative from collecting commissions on products or services ordered prior to the termination of the contract between the principal and the sales representative but delivered and accepted by the purchaser after such termination.

3. When the contract between a sales representative and a principal is terminated, all commissions then due shall be paid within thirty days of such termination. Any and all commissions which become due after the date of such termination shall be paid within thirty days of becoming due.

(L. 1989 S.B. 192 1 subsecs. 2, 3, 4, A.L. 2005 S.B. 211)



Failure to pay sales representative commission, liability in civil action for actual damages--additional damages allowed--attorney fees and costs.

407.913. Any principal who fails to timely pay the sales representative commissions earned by such sales representative shall be liable to the sales representative in a civil action for the actual damages sustained by the sales representative and an additional amount as if the sales representative were still earning commissions calculated on an annualized pro rata basis from the date of termination to the date of payment. In addition the court may award reasonable attorney's fees and costs to the prevailing party.

(L. 1989 S.B. 192 1 subsec. 5, A.L. 2005 S.B. 211)



Out-of-state principal with sales representative soliciting in this state, Missouri courts to have jurisdiction.

407.914. A principal who is not a resident or citizen of this state who contracts with a sales representative to solicit orders in this state is declared to be transacting business in this state for purposes of the exercise of jurisdiction of the courts of this state under section 506.500.

(L. 1989 S.B. 192 1 subsec. 6)



Civil action for all claims against principal may be joined--express or contract waivers of commission laws, invalid.

407.915. 1. Nothing in sections 407.911 to 407.915 shall invalidate or restrict any other or additional right or remedy available to a sales representative from seeking to recover in one action on all claims against a principal.

2. A provision in any contract between a sales representative and a principal purporting to waive any provision of sections 407.911 to 407.915, whether by expressed waiver or by a contract subject to the laws of another state, shall be void.

(L. 1989 S.B. 192 1 subsecs. 7, 8)



Division of liquor control to enforce underage tobacco sales--annual report submitted.

407.924. 1. The division of liquor control within the department of public safety shall implement and enforce the provisions of sections 407.925 to 407.934.

2. Beginning January 1, 2003, the division of liquor control shall submit an annual report to the general assembly on the effectiveness of sections 407.925 to 407.934 in reducing tobacco possession by minors and the enforcement activities by the division for violations of sections 407.925 to 407.934.

(L. 2001 H.B. 381)



Definitions.

407.925. As used in sections 407.925 to 407.932, the following terms mean:

(1) "Center of youth activities", any playground, school or other facility, when such facility is being used primarily by persons under the age of eighteen for recreational, educational or other purposes;

(2) "Distribute", a conveyance to the public by sale, barter, gift or sample;

(3) "Minor", a person under the age of eighteen;

(4) "Municipality", the city, village or town within which tobacco products are sold or distributed or, in the case of tobacco products that are not sold or distributed within a city, village or town, the county in which they are sold or distributed;

(5) "Person", an individual, partnership, copartnership, firm, company, public or private corporation, association, joint stock company, trust, estate, political subdivision or any agency, board, department or bureau of the state or federal government, or any other legal entity which is recognized by law as the subject of rights and duties;

(6) "Proof of age", a driver's license or other generally accepted means of identification that contains a picture of the individual and appears on its face to be valid;

(7) "Rolling papers", paper designed, manufactured, marketed, or sold for use primarily as a wrapping or enclosure for tobacco, which enables a person to roll loose tobacco into a smokable cigarette;

(8) "Sample", a tobacco product distributed to members of the general public at no cost or at nominal cost for product promotional purposes;

(9) "Sampling", the distribution to members of the general public of tobacco product samples;

(10) "Tobacco products", any substance containing tobacco leaf, including, but not limited to, cigarettes, cigars, pipe tobacco, snuff, chewing tobacco, or dipping tobacco;

(11) "Vending machine", any mechanical electric or electronic, self-service device which, upon insertion of money, tokens or any other form of payment, dispenses tobacco products.

(L. 1992 S.B. 509, et al. 7)



No tobacco sales to minors--penalties.

407.926. 1. Any person or entity who sells tobacco products shall deny the sale of such tobacco products to any person who is less than eighteen years of age.

2. Any person or entity who sells or distributes tobacco products by mail or through the internet in this state in violation of subsection 1 of this section shall be assessed a fine of two hundred * fifty dollars for the first violation and five hundred dollars for each subsequent violation.

(L. 2001 H.B. 381)

*Word "and" appears in original rolls.



Required sign stating violation of state law to sell tobacco to minors under age 18--display of sign required on tobacco displays and vending machines.

407.927. The owner of an establishment at which tobacco products or rolling papers are sold at retail or through vending machines shall cause to be prominently displayed in a conspicuous place at every display from which tobacco products are sold and on every vending machine where tobacco products are purchased a sign that shall:

(1) Contain in red lettering at least one-half inch high on a white background the following: "It is a violation of state law for cigarettes or other tobacco products to be sold or otherwise provided to any person under the age of eighteen or for such person to purchase, attempt to purchase or possess cigarettes or other tobacco products."; and

(2) Include a depiction of a pack of cigarettes at least two inches high defaced by a red diagonal diameter of a surrounding red circle, and the words "Under 18".

(L. 1992 S.B. 509, et al. 9, A.L. 2001 H.B. 381)



Restrictions on sales of individual packs of cigarettes.

407.928. No person or entity shall sell individual packs of cigarettes or smokeless tobacco products unless such packs satisfy one of the following conditions prior to the time of sale:

(1) It is sold through a vending machine; or

(2) It is displayed behind the check-out counter or it is within the unobstructed line of sight of the sales clerk or store attendant from the checkout counter.

(L. 2001 H.B. 381)



Proof of age required, when--defense to action for violation is reasonable reliance on proof--liability.

407.929. 1. A person or entity selling tobacco products or rolling papers or distributing tobacco product samples shall require proof of age from a prospective purchaser or recipient if an ordinary person would conclude on the basis of appearance that such prospective purchaser or recipient may be under the age of eighteen.

2. The operator's or chauffeur's license issued pursuant to the provisions of section 302.177, or the operator's or chauffeur's license issued pursuant to the laws of any state or possession of the United States to residents of those states or possessions, or an identification card as provided for in section 302.181, or the identification card issued by any uniformed service of the United States, or a valid passport shall be presented by the holder thereof upon request of any agent of the division of liquor control or any owner or employee of an establishment that sells tobacco, for the purpose of aiding the registrant, agent or employee to determine whether or not the person is at least eighteen years of age when such person desires to purchase or possess tobacco products procured from a registrant. Upon such presentation, the owner or employee of the establishment shall compare the photograph and physical characteristics noted on the license, identification card or passport with the physical characteristics of the person presenting the license, identification card or passport.

3. Any person who shall, without authorization from the department of revenue, reproduce, alter, modify or misrepresent any chauffeur's license, motor vehicle operator's license or identification card shall be deemed guilty of a misdemeanor and upon conviction shall be subject to a fine of not more than one thousand dollars, and confinement for not more than one year, or by both such fine and imprisonment.

4. Reasonable reliance on proof of age or on the appearance of the purchaser or recipient shall be a defense to any action for a violation of subsections 1, 2 and 3 of section 407.931. No person shall be liable for more than one violation of subsections 2 and 3 of section 407.931 on any single day.

(L. 1992 S.B. 509, et al. 11, 13, A.L. 2001 H.B. 381)



Unlawful to sell or distribute tobacco products to minors--vending machine requirements--what persons are liable--owners exempt, when--appeal to administrative hearing commission, when.

407.931. 1. It shall be unlawful for any person to sell, provide or distribute tobacco products to persons under eighteen years of age.

2. By January 1, 2002, all vending machines that dispense tobacco products shall be located within the unobstructed line of sight and under the direct supervision of an adult responsible for preventing persons less than eighteen years of age from purchasing any tobacco product from such machine or shall be equipped with a lock-out device to prevent the machines from being operated until the person responsible for monitoring sales from the machines disables the lock. Such locking device shall be of a design that prevents it from being left in an unlocked condition and which will allow only a single sale when activated. A locking device shall not be required on machines that are located in areas where persons less than eighteen years of age are not permitted or prohibited by law. An owner of an establishment whose vending machine is not in compliance with the provisions of this subsection shall be subject to the penalties contained in subsection 5 of this section. A determination of noncompliance may be made by a local law enforcement agency or the division of liquor control. Nothing in this section shall apply to a vending machine if located in a factory, private club or other location not generally accessible to the general public.

3. No person or entity shall sell, provide or distribute any tobacco product or rolling papers to any minor, or sell any individual cigarettes to any person in this state. This subsection shall not apply to the distribution by family members on property that is not open to the public.

4. Any person including, but not limited to, a sales clerk, owner or operator who violates subsection 1, 2 or 3 of this section or section 407.927 shall be penalized as follows:

(1) For the first offense, twenty-five dollars;

(2) For the second offense, one hundred dollars;

(3) For a third and subsequent offense, two hundred fifty dollars.

5. Any owner of the establishment where tobacco products are available for sale who violates subsection 3 of this section, in addition to the penalties established in subsection 4 of this section, shall be penalized in the following manner:

(1) For the first violation per location within two years, a reprimand shall be issued by the division of liquor control;

(2) For the second violation per location within two years, the division of liquor control shall issue a citation prohibiting the outlet from selling tobacco products for a twenty-four-hour period;

(3) For the third violation per location within two years, the division of liquor control shall issue a citation prohibiting the outlet from selling tobacco products for a forty-eight-hour period;

(4) For the fourth and any subsequent violations per location within two years, the division of liquor control shall issue a citation prohibiting the outlet from selling tobacco products for a five-day period.

6. Any owner of the establishment where tobacco products are available for sale who violates subsection 3 of this section shall not be penalized pursuant to this section if such person documents the following:

(1) An in-house or other tobacco compliance employee training program was in place to provide the employee with information on the state and federal regulations regarding tobacco sales to minors. Such training program must be attended by all employees who sell tobacco products to the general public;

(2) A signed statement by the employee stating that the employee has been trained and understands the state laws and federal regulations regarding the sale of tobacco to minors; and

(3) Such in-house or other tobacco compliance training meets the minimum training criteria, which shall not exceed a total of ninety minutes in length, established by the division of liquor control.

7. The exemption in subsection 6 of this section shall not apply to any person who is considered the general owner or operator of the outlet where tobacco products are available for sale if:

(1) Four or more violations per location of subsection 3 of this section occur within a one-year period; or

(2) Such person knowingly violates or knowingly allows his or her employees to violate subsection 3 of this section.

8. If a sale is made by an employee of the owner of an establishment in violation of sections 407.925 to 407.934, the employee shall be guilty of an offense established in subsections 1, 2 and 3 of this section. If a vending machine is in violation of section 407.927, the owner of the establishment shall be guilty of an offense established in subsections 3 and 4 of this section. If a sample is distributed by an employee of a company conducting the sampling, such employee shall be guilty of an offense established in subsections 3 and 4 of this section.

9. A person cited for selling, providing or distributing any tobacco product to any individual less than eighteen years of age in violation of subsection 1, 2 or 3 of this section shall conclusively be presumed to have reasonably relied on proof of age of the purchaser or recipient, and such person shall not be found guilty of such violation if such person raises and proves as an affirmative defense that such individual presented a driver's license or other government-issued photo identification purporting to establish that such individual was eighteen years of age or older.

10. Any person adversely affected by this section may file an appeal with the administrative hearing commission which shall be adjudicated pursuant to the procedures established in chapter 621.

(L. 1992 S.B. 509, et al. 8, 10, 12, A.L. 2001 H.B. 381)



Political subdivisions may make more stringent rules.

407.932. Nothing in sections 407.925 to 407.932 shall prohibit local political subdivisions from enacting more stringent ordinances or rules.

(L. 1992 S.B. 509, et al. 14)



Minors employed by division of liquor control may purchase cigarettes for enforcement purposes--misrepresentation of age, penalty.

407.933. 1. No person less than eighteen years of age shall purchase, attempt to purchase or possess cigarettes or other tobacco products unless such person is an employee of a seller of cigarettes or tobacco products and is in such possession to effect a sale in the course of employment, or an employee of the division of liquor control for enforcement purposes pursuant to subsection 5 of section 407.934.

2. Any person less than eighteen years of age shall not misrepresent his or her age to purchase cigarettes or tobacco products.

3. Any person who violates the provisions of this section shall be penalized as follows:

(1) For the first violation, the person is guilty of an infraction and shall have any cigarettes or tobacco products confiscated;

(2) For a second violation and any subsequent violations, the person is guilty of an infraction, shall have any cigarettes or tobacco products confiscated and shall complete a tobacco education or smoking cessation program, if available.

(L. 2001 H.B. 381)



Sales tax license required to sell tobacco products--division of liquor control to have inspection authority--limitations on use of minors for enforcement purposes.

407.934. 1. No person shall sell cigarettes or tobacco products unless the person has a retail sales tax license.

2. Beginning January 1, 2002, the department of revenue shall permit persons to designate through the internet or by including a place on all sales tax license applications for the applicant to designate himself or herself as a seller of tobacco products and to provide a list of all locations where the applicant sells such products.

3. On or before July first of each year, the department of revenue shall make available to the division of liquor control and the department of mental health a complete list of every establishment which sells cigarettes and other tobacco products in this state.

4. The division of liquor control shall have the authority to inspect stores and tobacco outlets for compliance with all laws related to access of tobacco products to minors. The division may employ a person seventeen years of age, with parental consent, to attempt to purchase tobacco for the purpose of inspection or enforcement of tobacco laws.

5. The supervisor of the division of liquor control shall not use minors to enforce the provisions of this chapter unless the supervisor promulgates rules that establish standards for the use of minors. The supervisor shall establish mandatory guidelines for the use of minors in investigations by a state, county, municipal or other local law enforcement authority which shall be followed by such authority and which shall, at a minimum, provide for the following:

(1) The minor shall be seventeen years of age;

(2) The minor shall have a youthful appearance, and the minor, if a male, shall not have facial hair or a receding hairline and if a female, shall not wear excessive makeup or excessive jewelry;

(3) The state, county, municipal or other local law enforcement agency shall obtain the consent of the minor's parent or legal guardian before the use of such minor on a form approved by the supervisor;

(4) The state, county, municipal or other local law enforcement agency shall make a photocopy of the minor's valid identification showing the minor's correct date of birth;

(5) Any attempt by such minor to purchase tobacco products shall be videotaped or audiotaped with equipment sufficient to record all statements made by the minor and the seller of the tobacco product;

(6) The minor shall carry his or her own identification showing the minor's correct date of birth and shall, upon request, produce such identification to the seller of the tobacco product;

(7) The minor shall answer truthfully any questions about his or her age and shall not remain silent when asked questions regarding his or her age;

(8) The minor shall not lie to the seller of the tobacco product to induce a sale of tobacco products;

(9) The minor shall not be employed by the state, county, municipal or other local law enforcement agency on an incentive or quota basis;

(10) The state, county, municipal or other local law enforcement agency shall, within forty-eight hours, contact or take all reasonable steps to contact the owner or manager of the establishment if a violation occurs;

(11) The state, county, municipal or other local law enforcement agency shall maintain records of each visit to an establishment where a minor is used by the state, county, municipal or other local law enforcement agency for a period of at least one year following the incident, regardless of whether a violation occurs at each visit, and such records shall, at a minimum, include the following information:

(a) The signed consent form of the minor's parent or legal guardian;

(b) A Polaroid photograph of the minor;

(c) A photocopy of the minor's valid identification, showing the minor's correct date of birth;

(d) An information sheet completed by the minor on a form approved by the supervisor; and

(e) The name of each establishment visited by the minor, and the date and time of each visit.

6. If the state, county, municipal or other local law enforcement authority uses minors in investigations or in enforcing or determining violations of this chapter or any local ordinance and does not comply with the mandatory guidelines established by the supervisor of liquor control in subsection 5 of this section, the supervisor of liquor control shall not take any disciplinary action against the establishment or seller pursuant to this chapter based on an alleged violation discovered when using a minor and shall not cooperate in any way with the state, county, municipal or other local law enforcement authority in prosecuting any alleged violation discovered when using a minor.

(L. 2001 H.B. 381)



Definitions.

407.935. As used in sections 407.935 to 407.943, the following words and phrases shall mean:

(1) "Contract", any agreement, or any term thereof, between a foreclosure consultant and an owner for the rendition of any service as defined in subdivision (6) of this section;

(2) "Foreclosure consultant":

(a) Includes any person who makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service which the person in any manner represents will do in any manner any of the following:

a. Stop or postpone the foreclosure sale;

b. Obtain any forbearance from any beneficiary or mortgagee;

c. Assist the owner to exercise any right of redemption;

d. Obtain any extension of the period within which the owner may reinstate his obligation;

e. Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on a residence in foreclosure or contained in any such deed of trust or mortgage;

f. Assist the owner in obtaining a loan or advance of funds;

g. Avoid or ameliorate the impairment of the owner's credit resulting from the recording of a notice of default or the conduct of a foreclosure sale;

h. Save the owner's residence from foreclosure;

(b) A foreclosure consultant does not include any of the following:

a. A person licensed to practice law in this state when the person renders service in the course of his practice as an attorney at law;

b. A person licensed as a real estate broker pursuant to chapter 339 when the person makes a direct loan or when the person:

(i) Engages in acts, the performance of which require licensure under that chapter;

(ii) Is entitled to compensation for the act performed in connection with the sale of a residence in foreclosure or with the arranging of a loan secured by a lien on a residence in foreclosure;

(iii) Does not claim, demand, charge, collect, or receive any compensation until the acts have been performed or cannot be performed because of the failure of the owner to accept an offer from a purchaser or lender ready, willing, and able to purchase a residence in foreclosure or make a loan secured by a lien on a residence in foreclosure on the terms prescribed in a listing or a loan agreement; and

(iv) Does not acquire any interest in a residence in foreclosure directly from an owner for whom the person agreed to perform the acts other than as a trustee or beneficiary under a deed of trust given to secure the payment of a loan or that compensation;

(v) For the purposes of this subdivision, a "direct loan" means a loan of a real estate broker's own funds secured by a deed of trust on the residence in foreclosure, which loan and deed of trust the broker in good faith attempts to assign to a lender, for an amount at least sufficient to cure all of the defaults on obligations which are then subject to a notice of default, provided that: if a foreclosure sale is conducted with respect to the deed of trust, the person conducting the foreclosure sale has no interest in the residence in foreclosure or in the outcome of the sale and is not owned, controlled, or managed by the lending broker; the lending broker does not acquire any interest in the residence in foreclosure directly from the owner other than as a beneficiary under the deed of trust; and the loan is not made for the purpose or effect of avoiding or evading the provisions of this act*;

c. A person or his authorized agent acting under the express authority or written approval of the department of housing and urban development or other department or agency of the United States or this state to provide services;

d. A person who holds or is owed an obligation secured by a lien on any residence in foreclosure when the person performs services in connection with the obligation or lien;

e. Any person licensed to make loans pursuant to sections 367.100 to 367.215, subject to the authority of the director of finance to terminate this exclusion, if after notice and hearing, any such licensee is found to have engaged in practices described in section 407.938;

f. Any person or entity doing business under any law of this state, or of the United States relating to banks, trust companies, savings and loan associations, credit unions, or any person or entity authorized under the laws of this state to conduct a title or escrow business, or a mortgagee which is a United States department of housing and urban development approved mortgagee and any subsidiary or affiliate of the above, and any agent or employee of the above while engaged in business of these persons or entities;

(3) "Owner", the record owner of any residence in foreclosure;

(4) "Person", any individual, partnership, corporation, association or other group, however organized;

(5) "Residence in foreclosure", any real property improved by a residential structure used or intended to be used as a residence by not more than four families, and occupied by the owner, which is the subject of any attempt by any person to enforce an obligation, the performance of which is secured by a mortgage or deed of trust encumbering the real property;

(6) "Service" includes, but is not limited to, any of the following:

(a) Debt, budget, or financial counseling of any type;

(b) Receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a lien on a residence in foreclosure;

(c) Contacting creditors on behalf of an owner of a residence in foreclosure;

(d) Arranging or attempting to arrange for an extension of the period within which the owner of a residence in foreclosure may cure his default and reinstate his obligation;

(e) Arranging or attempting to arrange for any delay or postponement of the time of sale of the residence in foreclosure;

(f) Advising the filing of any document or assisting in any manner in the preparation of any document for filing with any bankruptcy court;

(g) Giving any advice, explanation or instruction to an owner of a residence in foreclosure which in any manner relates to the cure of a default in or the reinstatement of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of that obligation, or the postponement or avoidance of a sale of a residence in foreclosure pursuant to a power of sale contained in any deed of trust.

(L. 1992 S.B. 705 2)

*"This act" (S.B. 705, 1992) contained numerous sections. Consult Disposition of Sections table for a definitive listing.



Right to cancel contract--notice of cancellation, effective when--form of cancellation.

407.937. 1. In addition to any other right under law to rescind a contract, an owner has the right to cancel a contract until midnight of the third business day after the day on which the owner signs a contract which complies with section 407.938.

2. The term "third business day" shall exclude all intervening Saturdays, Sundays and national and state holidays.

3. Notice of cancellation, if given by mail, is effective when deposited in the mail properly addressed with postage prepaid.

4. Notice of cancellation given by the owner need not take the particular form as provided with the contract and, however expressed, is effective if it indicates the intention of the owner not to be bound by the contract.

(L. 1992 S.B. 705 3)



Contract, form of--notice required, contents--contract to be accompanied by notice of cancellation, contents.

407.938. 1. Every contract shall be in writing and shall fully disclose the exact nature of the foreclosure consultant's services and the total amount and terms of compensation.

2. The following notice, printed in at least fourteen-point boldface type and completed with the name of the foreclosure consultant, shall be printed immediately above the statement required by subsection 3 of this section: NOTICE REQUIRED BY MISSOURI LAW ................................. (Enter name of foreclosure consultant) or anyone working for him or her cannot: (1) Take any money from you or ask you for money until .................................. (Enter name of foreclosure consultant) has completely finished doing everything he or she said he or she would do; and (2) Ask you to sign or have you sign any lien, mortgage, deed of trust, or deed.

3. The contract shall be written in the same language as principally used by the foreclosure consultant to describe his services or to negotiate the contract, shall be dated and signed by the owner, and shall contain in immediate proximity to the space reserved for the owner's signature a conspicuous statement in a size equal to at least ten-point bold type, as follows:

You, the owner, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.

4. The contract shall contain on the first page, in a type size no smaller than that generally used in the body of the document, each of the following:

(1) The name and address of the foreclosure consultant to which the notice or cancellation is to be mailed;

(2) The date the owner signed the contract.

5. The contract shall be accompanied by a completed form in duplicate, captioned "notice of cancellation", which shall be attached to the contract, shall be easily detachable, and shall contain in type of at least ten-point the following statement written in the same language as used in the contract: NOTICE OF CANCELLATION

............. (Enter date of transaction.) ............... (Date) You may cancel this transaction, without any penalty or obligation, within three business days from the above date. 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 ............................... (Enter name of foreclosure consultant) at ............................ (Enter address of foreclosure consultant's place of business) NOT LATER THAN MIDNIGHT OF ........................ (Enter date) I hereby cancel this transaction on ..................... (Date) ......... (Owner's signature)

6. The foreclosure consultant shall provide the owner with a copy of the contract and the attached notice of cancellation.

(L. 1992 S.B. 705 4)



Foreclosure consultants, unlawful acts--penalty.

407.940. 1. It shall be unlawful for a foreclosure consultant to knowingly:

(1) Claim, demand, charge, collect, or receive any compensation until after the foreclosure consultant has fully performed each and every service the foreclosure consultant contracted to perform or represented he would perform;

(2) Claim, demand, charge, collect, or receive any fee, interest, or any other compensation for any reason which exceeds ten percent per annum of the amount of any loan which the foreclosure consultant may make to the owner;

(3) Take any wage assignment, any lien of any type on real or personal property, or other security to secure the payment of compensation. Any such security shall be void and unenforceable;

(4) Receive any consideration from any third party in connection with services rendered to an owner unless such consideration is fully disclosed to the owner;

(5) Acquire any interest in a residence in foreclosure from an owner with whom the foreclosure consultant has contracted. Any interest acquired in violation of this subdivision shall be voidable, provided that nothing herein shall affect or defeat the title of a bona fide purchaser or encumberer for value and without notice of a violation of this section. Knowledge that the property was a "residence in foreclosure" shall not constitute notice of a violation of this section. This subdivision shall not be deemed to abrogate any duty of inquiry which exists as to rights or interests of persons in possession of a residence in foreclosure;

(6) Take any power of attorney from an owner for any purpose, except to inspect documents as provided by law;

(7) Induce or attempt to induce any owner to enter a contract which does not comply in all respects with sections 407.935 and 407.937.

2. Any violation of any of the acts enumerated in subsection 1 of this section shall be a class A misdemeanor.

(L. 1992 S.B. 705 5)



Waiver, void--penalty.

407.941. Any waiver by an owner of the provisions of sections 407.935 to 407.943 shall be deemed void and unenforceable as contrary to public policy. Any attempt by a foreclosure consultant to induce an owner to waive his rights shall be deemed a violation of subdivision (7) of subsection 1 of section 407.940.

(L. 1992 S.B. 705 6)



Action against foreclosure consultant authorized--exemplary damages authorized--remedies not exclusive.

407.943. 1. An owner may bring an action against a foreclosure consultant for any violation of sections 407.935 to 407.943. Judgment shall be entered for actual damages, reasonable attorneys' fees and costs, and appropriate equitable relief. The court also may, in its discretion, award exemplary damages equivalent to at least twice the compensation received by the foreclosure consultant in violation of section 407.940, in addition to any other award of actual damages.

2. The rights and remedies provided in subsection 1 of this section are cumulative to, and not a limitation of, any other rights and remedies provided by law. Any action brought pursuant to this section shall be commenced within three years from the date of the alleged violation.

(L. 1992 S.B. 705 7)



Definitions.

407.950. 1. As used in sections 407.950 to 407.970, the following terms mean:

(1) "Assistive device", any device, including a demonstrator, that a consumer purchases or accepts transfer of in this state which is used for a major life activity which includes, but is not limited to, manual wheelchairs, motorized wheelchairs, motorized scooters, and other aids that enhance the mobility of an individual; hearing aid, telephone communication devices for the deaf (TDD), assistive listening devices, and other aids that enhance an individual's ability to hear; voice-synthesized computer modules, optical scanners, talking software, Braille printers, and other devices that enhance a sight impaired individual's ability to communicate; and any other assistive device that enables a person with a disability to communicate, see, hear, or maneuver;

(2) "Assistive device dealer", a person who is in the business of selling assistive devices;

(3) "Assistive device lessor", a person who leases an assistive device to a consumer, or who holds the lessor's rights, under a written lease;

(4) "Collateral costs", expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining an alternative assistive device;

(5) "Consumer", any of the following:

(a) The purchaser of an assistive device, if the assistive device was purchased from an assistive device dealer or manufacturer for purposes other than resale;

(b) A person to whom the assistive device is transferred for purposes other than resale, if the transfer occurs before the expiration of an express warranty applicable to the assistive device;

(c) A person who may enforce the warranty;

(d) A person who leases an assistive device from an assistive device lessor under a written lease;

(6) "Demonstrator", an assistive device used primarily for the purpose of demonstration to the public;

(7) "Early termination cost", any expense or obligation that an assistive device lessor incurs as a result of both the termination of a written lease before the termination date set forth in that lease and the return of an assistive device to a manufacturer pursuant to sections 407.950 to 407.970. Early termination cost includes a penalty for prepayment under a finance arrangement;

(8) "Early termination saving", any expense or obligation that an assistive device lessor avoids as a result of both the termination of a written lease before that termination date set forth in that lease and the return of an assistive device to a manufacturer pursuant to sections 407.950 to 407.970. Early termination saving includes an interest charge that the assistive device lessor would have paid to finance the assistive device or, if the assistive device lessor does not finance the assistive device, the difference between the total amount for which the lease obligates the consumer during the period of the lease term remaining after the early termination and the present value of that amount at the date of the early termination;

(9) "Manufacturer", a person who manufactures or assembles assistive devices and agents of that person, including an importer, a distributor, factory branch, distributor branch and any warrantors of the manufacturer's assistive device, but does not include an assistive device dealer;

(10) "Nonconformity", a condition or defect that substantially impairs the use, value or safety of an assistive device, and that is covered by an express warranty applicable to the assistive device or to a component of the assistive device, but does not include:

(a) A condition of the device that is the result of abuse, neglect or unauthorized modification or alteration of the assistive device by a consumer; or

(b) A condition of the device that is the result of normal use which may be resolved through a fitting adjustment, preventative maintenance or proper care;

(11) "Reasonable attempt to repair", within the terms of an express warranty applicable to a new assistive device:

(a) Any nonconformity within the warranty that is either subject to repair by the manufacturer, assistive device lessor or any of the manufacturer's authorized assistive device dealers, for at least four times and a nonconformity continues; or

(b) The assistive device is out of service with no comparable loaner available for an aggregate of at least thirty cumulative days because of warranty nonconformity.

(L. 1995 H.B. 333 1 subsec. 1, A.L. 1997 S.B. 410)



Warranty express or implied, one year required.

407.953. A manufacturer who sells an assistive device to a consumer, either directly or through an assistive device dealer, shall furnish the consumer with an express warranty for the assistive device. The duration of the express warranty shall be not less than one year after first delivery of the assistive device to the consumer. In the absence of an express warranty from the manufacturer, the manufacturer shall be deemed to have expressly warranted to the consumer of an assistive device that, for a period of one year from the date of first delivery to the consumer, the assistive device will be free from any condition or defect which substantially impairs the value of the assistive device to the consumer.

(L. 1995 H.B. 333 1 subsec. 2)



Nonconformity of assistive device to be repaired at no cost.

407.955. If a new assistive device does not conform to an applicable express warranty and the consumer reports the nonconformity to the manufacturer, the assistive device lessor or any of the manufacturer's authorized assistive device dealers and makes the assistive device available for repair before one year after return delivery of the assistive device to a consumer, the nonconformity shall be repaired at no charge to the consumer.

(L. 1995 H.B. 333 1 subsec. 3)



Nonconformity not repaired within reasonable time, options of consumer.

407.957. 1. If, after a reasonable attempt to repair, the nonconformity is not repaired, the manufacturer shall carry out the requirement set forth under subsection 2 of this section.

2. If, after a reasonable attempt to repair, the nonconformity is not repaired, then at the direction of a consumer described under paragraph (a), (b), or (c) of subdivision (5) of section 407.950, the manufacturer shall do one of the following:

(1) Accept return of the assistive device and replace the assistive device with a comparable new assistive device and refund any collateral costs;

(2) Accept return of the assistive device and refund to the consumer and to any holder of a perfected security interest in the consumer's assistive device, as their interest may appear, the full purchase price plus any finance charge amount paid by the consumer at the point of sale and collateral costs, less a reasonable allowance for use. A reasonable allowance for use may not exceed the amount obtained by multiplying the full purchase price of the assistive device by a fraction, the denominator of which is one thousand eight hundred twenty-five and the numerator of which is the number of days that the assistive device was used before the consumer first reported the nonconformity to the assistive device dealer;

(3) With respect to a consumer described under paragraph (d) of subdivision (5) of section 407.950, accept return of the assistive device, refund to the assistive device lessor and to any holder of a perfected security interest in the assistive device, as their interest may appear, the current value of the written lease and refund to the consumer the amount that the consumer paid under the written lease plus any collateral costs, less a reasonable allowance for use.

(L. 1995 H.B. 333 1 subsecs. 4, 5)



Lease, early termination--reasonable allowance for use, how computed.

407.959. 1. The current value of the written lease equals the total amount for which that lease obligates the consumer during the period of the lease remaining after its early termination, plus the assistive device dealer's early termination costs and the value of the assistive device at the lease expiration date if the lease sets forth that value, less the assistive device lessor's early termination savings.

2. A reasonable allowance for use may not exceed the amount obtained by multiplying the total amount for which the written lease obligates the consumer by a fraction, the denominator of which is one thousand eight hundred twenty-five and the numerator of which is the number of days that the consumer used the assistive device before first reporting the nonconformity to the manufacturer, assistive device lessor or assistive device dealer.

(L. 1995 H.B. 333 1 subsecs. 6, 7)



Consumer to receive comparable device or refund, procedure--lease unenforceable against consumer after refund.

407.961. 1. To receive a comparable new assistive device or a refund due under subsection 2 of section 407.957, a consumer described under subdivision (5) of section 407.950 shall offer to the manufacturer of the assistive device having the nonconformity to transfer possession of that assistive device to that manufacturer. No later than thirty days after that offer, the manufacturer shall provide the consumer with the comparable assistive device or refund. When the manufacturer provides the new assistive device or refund, the consumer shall return the assistive device having the nonconformity to the manufacturer, along with any endorsements necessary to transfer real possession to the manufacturer.

2. To receive a refund due under subdivision (3) of subsection 2 of section 407.957, a consumer described under paragraph (d) of subdivision (5) of section 407.950 shall offer to return the assistive device having the nonconformity to its manufacturer. No later than thirty days after that offer, the manufacturer shall provide the refund to the consumer. When the manufacturer provides the refund, the consumer shall return to the manufacturer the assistive device having the nonconformity.

3. To receive a refund due under subdivision (3) of subsection 2 of section 407.957, an assistive device lessor shall offer to transfer possession of the assistive device having the nonconformity to its manufacturer. No later than thirty days after that offer, the manufacturer shall provide the refund to the assistive device lessor. When the manufacturer provides the refund, the assistive device lessor shall provide to the manufacturer any endorsements necessary to transfer legal possession to the manufacturer.

4. No person shall enforce the lease against the consumer after the consumer receives a refund due under subdivision (3) of subsection 2 of section 407.957.

(L. 1995 H.B. 333 1 subsecs. 8 to 11)



Resale or lease of returned device, full disclosure required.

407.963. No assistive device returned by a consumer or assistive device lessor in this state, or by a consumer or assistive device lessor in another state under a similar law of that state, may be sold or leased again in this state unless full disclosure of the reasons for return is made to any prospective buyer or lessee.

(L. 1995 H.B. 333 1 subsec. 12)



Arbitration of disputes may be submitted, filing fee, procedure--waivers of consumer's rights are void.

407.965. 1. Each consumer shall have the option of submitting any dispute arising under sections 407.950 to 407.970 upon the payment of a prescribed filing fee to an alternate arbitration mechanism established pursuant to regulations promulgated by the attorney general. Upon application of the consumer and payment of the filing fee, all manufacturers shall submit to such alternate arbitration.

2. Such alternate arbitration shall be conducted by a professional arbitrator or arbitration firm appointed by and under regulations established by the attorney general. Such mechanism shall ensure the personal objectivity of its arbitrators and the right of each party to present its case, to be in attendance during any presentation made by the other party and to rebut or refute such presentation.

3. Sections 407.950 to 407.970 shall not be construed to limit rights or remedies available to a consumer under any other law.

4. Any waiver by a consumer of rights under sections 407.950 to 407.970 is void.

(L. 1995 H.B. 333 1 subsecs. 13 to 16)



Action for damages, attorney's fees and costs may be brought by consumer.

407.967. In addition to pursuing any other remedy, a consumer may bring an action to recover for any damages caused by a violation of sections 407.950 to 407.970. The court shall award a consumer who prevails in such an action twice the amount of any pecuniary loss, together with costs, disbursements and reasonable attorney fees, and any equitable relief that the court determines is appropriate.

(L. 1995 H.B. 333 1 subsec. 17)



Rules, procedure to adopt--suspension or revocation of rules, procedure.

407.970. 1. No rule or portion of a rule promulgated under the authority of sections 407.950 to 407.970 shall become effective until it has been approved by the joint committee on administrative rules in accordance with the procedures provided in sections 407.950 to 407.970, and the delegation of the legislative authority to enact law by the adoption of such rules is dependent upon the power of the joint committee on administrative rules to review and suspend rules pending ratification by the senate and the house of representatives as provided in sections 407.950 to 407.970.

2. Upon filing any proposed rule with the secretary of state the attorney general shall concurrently submit such proposed rule to the committee which may hold hearings upon any proposed rule or portion thereof at any time.

3. A final order of rulemaking shall not be filed with the secretary of state until thirty days after such final order of rulemaking has been received by the committee. The committee may hold one or more hearings upon such final order of rulemaking during the thirty-day period. If the committee does not disapprove such order of rulemaking within the thirty-day period, the attorney general may file such order of rulemaking with the secretary of state and the order of rulemaking shall be deemed approved.

4. The committee may, by majority vote of the members, suspend the order of rulemaking or portion thereof by action taken prior to the filing of the final order of rulemaking only for one or more of the following grounds:

(1) An absence of statutory authority for the proposed rule;

(2) An emergency relating to public health, safety or welfare;

(3) The proposed rule is in conflict with state law;

(4) A substantial change in circumstance since enactment of the law upon which the proposed rule is based.

5. If the committee disapproves any rule or portion thereof, the attorney general shall not file such disapproved portion of any rule with the secretary of state and the secretary of state shall not publish in the Missouri Register any final order of rulemaking containing the disapproved portion.

6. If the committee disapproves any rule or portion thereof, the committee shall report its findings to the senate and the house of representatives. No rule or portion thereof disapproved by the committee shall take effect so long as the senate and the house of representatives ratify the act of the joint committee by resolution adopted in each house within thirty legislative days after such rule or portion thereof has been disapproved by the joint committee.

7. Upon adoption of a rule as provided in sections 407.950 to 407.970, any such rule or portion thereof may be suspended or revoked by the general assembly either by bill or, pursuant to section 8, article IV of the Constitution of Missouri, by concurrent resolution upon recommendation of the joint committee on administrative rules. The committee shall be authorized to hold hearings and make recommendations pursuant to the provisions of section 536.037. The secretary of state shall publish in the Missouri Register, as soon as practicable, notice of the suspension or revocation.

(L. 1995 H.B. 333 1 subsecs. 18 to 24)



Convenience business defined--businesses not included in definition--preemption by state of all security regulations.

407.980. 1. As used in sections 407.980 to 407.987, the term "convenience business" means any place of business that is primarily engaged in the retail sale of groceries, or both groceries and gasoline, and is open for business at any time between the hours of 11:00 p.m. and 5:00 a.m. The term "convenience business" does not include:

(1) A business that is solely or primarily a restaurant;

(2) A business that has at least ten thousand square feet of retail floor space; or

(3) A business which is owned by a person who owns a business at no other location.

2. A political subdivision of this state may not adopt, for convenience businesses, security standards which differ from those contained in sections 407.980 to 407.987 and all such differing standards are hereby preempted and superseded by state statute.

(L. 1995 S.B. 446 4, A.L. 1997 H.B. 141)



Equipment required for security of convenience business--limitation on cash after 11:00 p.m. until 5:00 a.m.--prohibited window signs and treatment--operator defined.

407.985. 1. Prior to January 1, 1997, for the protection of employees and the consumer public at late-night convenience businesses, every operator of a convenience business shall ensure that such operator's convenience business is equipped with the following:

(1) A bullet-resistant glass enclosure or security camera system capable of recording and retrieving an image to assist law enforcement officials in the identification and apprehension of a criminal offender and by January 1, 1998, such system shall have at least one camera focused on the cash register area;

(2) A drop safe or cash-management device for restricted access to cash receipts;

(3) Lighting for parking areas and entrances at an intensity to provide clear visibility under normal conditions, which can be satisfied by canopy lighting within ten feet of the building;

(4) A conspicuous notice at the entrance which states that the cash register contains limited funds;

(5) Height markers at the entrance of the convenience business which display height measures; and

(6) A cash management policy to limit the cash on hand at all times after 11:00 p.m. and before 5:00 a.m.

2. Prior to January 1, 1998, for the protection of employees and the consumer public at late-night convenience businesses, every operator of a convenience business shall ensure that such operator's convenience business is equipped with the following:

(1) A silent alarm system which shall be connected to a security company or a local law enforcement agency; or

(2) A telephone, other than a pay telephone, accessible to employees at all times.

3. After January 1, 1997, for the protection of employees and the consumer public at late-night convenience businesses, every operator of a convenience business shall ensure that:

(1) No window signs shall be located so as to obstruct the view from outside the building to the cash register and sales transaction area; and

(2) No window tinting that significantly reduces exterior or interior view in a normal line of sight.

4. For the purposes of sections 407.980 to 407.990, "operator" means any individual proprietor or business entity responsible for the day-to-day operation of the convenience business.

(L. 1995 S.B. 446 5, A.L. 1997 H.B. 141)



Training to be provided for employees in robbery deterrence and safety--time limitation to provide.

407.987. The operator of a convenience business shall provide each employee with training in proper robbery deterrence and safety within sixty days of an employee's date of employment or if a person is an employee on January 1, 1997, then by July 1, 1997.

(L. 1995 S.B. 446 6, A.L. 1997 H.B. 141)



Penalty.

407.990. Any person who violates any provision of sections 407.980 to 407.990 is guilty of a class C misdemeanor.

(L. 1997 H.B. 141)



Definitions.

407.1025. As used in sections 407.1025 to 407.1049, unless the context otherwise requires, the following terms mean:

(1) "Administrative hearing commission", the body established in chapter 621 to conduct administrative hearings;

(2) "All-terrain vehicle", any motorized vehicle manufactured and used exclusively for off-highway use which is fifty inches or less in width, with an unladen dry weight of six hundred pounds or less, traveling on three, four or more low pressure tires, with a seat designed to be straddled by the operator, and handlebars for steering control;

(3) "Coerce", to force a person to act in a given manner or to compel by pressure or threat but shall not be construed to include the following:

(a) Good faith recommendations, exposition, argument, persuasion or attempts at persuasion;

(b) Notice given in good faith to any franchisee of such franchisee's violation of terms or provisions of such franchise or contractual agreement;

(c) Any other conduct set forth in section 407.1043 as a defense to an action brought pursuant to sections 407.1025 to 407.1049; or

(d) Any other conduct set forth in sections 407.1025 to 407.1049 that is permitted of the franchisor or is expressly excluded from coercion or a violation of sections 407.1025 to 407.1049;

(4) "Franchise", a written arrangement or contract for a definite or indefinite period, in which a person grants to another person a license to use, or the right to grant to others a license to use, a trade name, trademark, service mark, or related characteristics, in which there is a community of interest in the marketing of goods or services, or both, at wholesale or retail, by agreement, lease or otherwise, and in which the operation of the franchisee's business with respect to such franchise is substantially reliant on the franchisor for the continued supply of franchised new motorcycles or all-terrain vehicles, parts and accessories for sale at wholesale or retail;

(5) "Franchisee", a person to whom a franchise is granted;

(6) "Franchisor", a person who grants a franchise to another person;

(7) "Motorcycle", a motor vehicle operated on two wheels;

(8) "New", when referring to motorcycles or all-terrain vehicles or parts, means those motorcycles or all-terrain vehicles or parts which have not been held except as inventory, as that term is defined in subdivision (4) of section 400.9-109;

(9) "Person", a sole proprietor, partnership, corporation, or any other form of business organization.

(L. 1998 H.B. 1055 1)



Long-arm jurisdiction, motorcycle and all-terrain vehicle (ATV) businesses.

407.1028. Any person who is engaged or engages directly or indirectly in purposeful contacts within the state of Missouri in connection with the offering, advertising, purchasing, selling, or contracting to purchase or to sell new motorcycles or all-terrain vehicles, or who, being a motorcycle or all-terrain vehicle franchisor, is transacting or transacts any business with a motorcycle or all-terrain vehicle franchisee who maintains a place of business within the state and with whom the person has a franchise, shall be subject to the jurisdiction of the courts of the state of Missouri, upon service of process in accordance with the provisions of section 506.510, irrespective of whether such person is a manufacturer, importer, distributor or dealer in new motorcycles or all-terrain vehicles.

(L. 1998 H.B. 1055 2)



Procedure, before administrative hearing commission, application, notice, hearing, order, review.

407.1031. 1. Any party seeking relief pursuant to the provisions of sections 407.1025 to 407.1049 may file an application for a hearing with the administrative hearing commission within the time periods specified in this section. The application for a hearing shall comply with the requirements for a request for agency action set forth in chapter 536. Simultaneously, with the filing of the application for a hearing with the administrative hearing commission, the applicant shall send by certified mail, return receipt requested, a copy of the application to the party or parties against whom relief is sought. Within ten days of receiving a timely application for a hearing, the administrative hearing commission shall enter an order fixing a date, time and place for a hearing on the record. Such hearing shall be within forty-five days of the date of the order but the administrative hearing commission may continue the hearing date up to twenty-five additional days by agreement of the parties or upon a finding of good cause. The administrative hearing commission shall send by certified mail, return receipt requested, a copy of the order to the party seeking relief and to the party or parties against whom relief is sought. The order shall also state that the party against whom relief is sought shall not proceed with the initiation of its activity or activities until the administrative hearing commission issues its final decision or order.

2. Unless otherwise expressly provided in sections 407.1025 to 407.1049, the provisions of chapter 536 shall govern hearings and prehearing procedures conducted pursuant to the authority of this section. The administrative hearing commission shall issue a final decision or order, in proceedings arising pursuant to the provisions of sections 407.1025 to 407.1049, within forty-five days from the conclusion of the hearing. Any final decisions shall be subject to review pursuant to a petition for review to be filed in the court of appeals in the district in which the hearing, or any part of the hearing, is held and by delivery of copies of the petition to each party of record, within thirty days after the mailing or delivery of the final decision and notice of the final decision in such a case. Review pursuant to this section shall be exclusive and decisions of the administrative hearing commission reviewable pursuant to this section shall not be reviewable in any other proceeding, and no other official or court shall have power to review any such decision by an action in the nature of mandamus or otherwise, except pursuant to the provisions of this section. The party seeking review shall be responsible for the filing of the transcript and record of all proceedings before the administrative hearing commission with the appropriate court of appeals.

3. Any franchisee receiving a notice from a franchisor pursuant to the provisions of sections 407.1025 to 407.1049, or any franchisee adversely affected by a franchisor's acts or proposed acts described in the provisions of sections 407.1025 to 407.1049, shall be entitled to file an application for a hearing before the administrative hearing commission for a determination as to whether the franchisor has good cause for its acts or proposed acts.

4. Not less than sixty days before the effective date of the initiation of any enumerated act pursuant to subdivisions (5), (6), (7) and (14) of section 407.1034, a franchisor shall give written notice to the affected franchisee or franchisees, by certified mail, return receipt requested, except as follows:

(1) Upon the initiation of an act pursuant to subdivision (5) of section 407.1034, such notice shall be given not less than fifteen days before the effective date of such act only if the grounds for the notice include the following:

(a) Transfer of any ownership or interest in the franchised dealership without the consent of the motorcycle or all-terrain vehicle franchisor;

(b) Material misrepresentation by the motorcycle or all-terrain vehicle franchisee in applying for the franchise;

(c) Insolvency of the motorcycle or all-terrain vehicle franchisee or the filing of any petition by or against the motorcycle or all-terrain vehicle franchisee under any bankruptcy or receivership law;

(d) Any unfair business practice by the motorcycle or all-terrain vehicle franchisee after the motorcycle or all-terrain vehicle franchisor has issued a written warning to the motorcycle or all-terrain vehicle franchisee to desist from such practice;

(e) Conviction of the motorcycle or all-terrain vehicle franchisee of a crime which is a felony;

(f) Failure of the motorcycle or all-terrain vehicle franchisee to conduct customary sales and service operations during customary business hours for at least seven consecutive business days unless such closing is due to an act of God, strike or labor difficulty or other cause over which the motorcycle or all-terrain vehicle franchisee has no control; or

(g) Revocation of the motorcycle or all-terrain vehicle franchisee's license;

(2) Upon initiation of an act pursuant to subdivision (7) of section 407.1034, such notice shall be given within sixty days of the franchisor's receipt of a written proposal to consummate such sale or transfer and the receipt of all necessary information and documents generally used by the franchisor to conduct its review. The franchisor's notice of disapproval shall also specify the reasonable standard which the franchisor contends is not satisfied and the reason the franchisor contends such standard is not satisfied. Failure on the part of the franchisor to provide such notice shall be conclusively deemed an approval by the franchisor of the proposed sale or transfer to the proposed transferee. A franchisee's application for a hearing shall be filed with the administrative hearing commission within fifteen days from receipt of such franchisor's notice;

(3) Pursuant to paragraphs (a) and (b) of subdivision (14) of section 407.1034, such notice shall be given within sixty days of the franchisor's receipt of a deceased or incapacitated franchisee's designated family member's intention to succeed to the franchise or franchises or of the franchisor's receipt of the personal and financial data of the designated family member, whichever is later.

5. A franchisor's notice to a franchisee or franchisees pursuant to subdivisions (5), (6), (7) and (14) of section 407.1034 shall contain a statement of the particular grounds supporting the intended action or activity which shall include any reasonable standards which were not satisfied. The notice shall also contain at a minimum, on the first page thereof, a conspicuous statement which reads as follows: "NOTICE TO FRANCHISEE: YOU MAY BE ENTITLED TO FILE A PROTEST WITH THE MISSOURI ADMINISTRATIVE HEARING COMMISSION IN JEFFERSON CITY, MISSOURI, AND HAVE A HEARING IN WHICH YOU MAY PROTEST THE CONTENTS OF THIS NOTICE. ANY ACTION MUST BE FILED WITHIN FIFTEEN DAYS FROM RECEIPT OF THIS NOTICE."

6. When more than one application for a hearing is filed with the administrative hearing commission, the administrative hearing commission may consolidate the applications into one proceeding to expedite the disposition of all relevant issues.

7. In all proceedings before the administrative hearing commission pursuant to this section and section 407.1034, where the franchisor is required to give notice pursuant to subsection 5 of this section, the franchisor shall have the burden of proving by a preponderance of the evidence that good cause exists for its actions. In all other actions, the franchisee shall have the burden of proof.

(L. 1998 H.B. 1055 3)



Unlawful merchandising practices by motorcycle or all-terrain vehicle (ATV) franchisor.

407.1034. Notwithstanding the terms of any franchise agreement, the performance, whether by act or omission, by a motorcycle or all-terrain vehicle franchisor of any or all of the following acts enumerated in this section are hereby defined as unlawful practices, the remedies for which are set forth in section 407.1043:

(1) To engage in any conduct which is capricious, in bad faith, or unconscionable and which causes damage to a motorcycle or all-terrain vehicle franchisee or to the public; provided, that good faith conduct engaged in by motorcycle or all-terrain vehicle franchisors as sellers of new motorcycles, all-terrain vehicles or parts or as holders of security interests therein, in pursuit of rights or remedies accorded to sellers of goods or to holders of security interests pursuant to the provisions of chapter 400, uniform commercial code, shall not constitute unfair practices pursuant to sections 407.1025 to 407.1049;

(2) To coerce any motorcycle or all-terrain vehicle franchisee to accept delivery of any new motorcycle, motorcycles, all-terrain vehicles, equipment, parts or accessories therefor, or any other commodity or commodities which such motorcycle or all-terrain vehicle franchisee has not ordered after such motorcycle or all-terrain vehicle franchisee has rejected such commodity or commodities. It shall not be deemed a violation of sections 407.1025 to 407.1049 for a motorcycle or all-terrain vehicle franchisor to require a motorcycle or all-terrain vehicle franchisee to have an inventory of parts, tools and equipment reasonably necessary to service the motorcycles or all-terrain vehicles sold by a motorcycle or all-terrain vehicle franchisor; or new motorcycles or all-terrain vehicles reasonably necessary to meet the demands of dealers or the public;

(3) To unreasonably refuse to deliver in reasonable quantities and within a reasonable time after receipt of orders for new motorcycles or all-terrain vehicles, such motorcycles or all-terrain vehicles as are so ordered and as are covered by such franchise and as are specifically publicly advertised by such motorcycle or all-terrain vehicle franchisor to be available for immediate delivery; provided, however, the failure to deliver any motorcycle or all-terrain vehicle shall not be considered a violation of sections 407.1025 to 407.1049 if such failure is due to an act of God, work stoppage, or delay due to a strike or labor difficulty, shortage of products or materials, freight delays, embargo or other cause of which such motorcycle or all-terrain vehicle franchisor has no control;

(4) To coerce any motorcycle or all-terrain vehicle franchisee to enter into any agreement with such motorcycle or all-terrain vehicle franchisor or to do any other act prejudicial to such motorcycle or all-terrain vehicle franchisee, by threatening to cancel any franchise or any contractual agreement existing between such motorcycle or all-terrain vehicle franchisor and motorcycle or all-terrain vehicle franchisee; provided, however, that notice in good faith to any motorcycle or all-terrain vehicle franchisee of such motorcycle or all-terrain vehicle franchisee's violation of any provisions of such franchise or contractual agreement shall not constitute a violation of sections 407.1025 to 407.1049;

(5) To terminate, cancel or refuse to continue any franchise, directly or indirectly through the actions of the franchisor, unless such new motorcycle or all-terrain vehicle franchisee substantially defaults in the performance of such franchisee's reasonable and lawful obligations under such franchisee's franchise, or such new motorcycle or all-terrain vehicle franchisor discontinues the sale in the state of Missouri of such franchisor's products which are the subject of the franchise:

(a) Notwithstanding the terms of any franchise agreement to the contrary, good cause to terminate, cancel or refuse to continue any franchise agreement shall not be established based upon the fact that the motorcycle or all-terrain vehicle franchisee owns, has an investment in, participates in the management of or holds a franchise agreement for the sale or service of another make or line of new motorcycles or all-terrain vehicles or the motorcycle or all-terrain vehicle dealer has established another make or line of new motorcycles or all-terrain vehicles or service in the same dealership facilities as those of the motorcycle or all-terrain vehicle franchisor prior to February 1, 1998, or such establishment is approved in writing by the franchisee and the franchisor. However, a franchisor may require a franchisee to maintain a reasonable line of credit for each franchise and to comply with each franchisor's reasonable requirements concerning capital, management and facilities. If the franchise agreement requires the approval of the franchisor, such approval shall be requested in writing by the franchisee and the franchisor shall approve or disapprove such a request in writing within sixty days of receipt of such request. A request from a franchisee shall be deemed to have been approved if the franchisor fails to notify the franchisee, in writing, of its disapproval within sixty days after its receipt of the written request;

(b) In determining whether good cause exists, the administrative hearing commission shall take into consideration the existing circumstances, including, but not limited to, the following factors:

a. The franchisee's sales in relation to sales in the market;

b. The franchisee's investment and obligations;

c. Injury to the public welfare;

d. The adequacy of the franchisee's service facilities, equipment, parts and personnel in relation to those of other franchisees of the same line-make;

e. Whether warranties are being honored by the franchisee;

f. The parties' compliance with their franchise agreement;

g. The desire of a franchisor for market penetration or a market study, if any, prepared by the franchisor or franchisee are two factors which may be considered;

h. The harm to the franchisor;

(6) To prevent by contract or otherwise, any motorcycle or all-terrain vehicle franchisee from changing the capital structure of the franchisee's franchise of such motorcycle or all-terrain vehicle franchisee or the means by or through which the franchisee finances the operation of the franchisee's franchise, provided the motorcycle or all-terrain vehicle franchisee at all times meets any reasonable capital standards agreed to between the motorcycle or all-terrain vehicle franchisee and the motorcycle or all-terrain vehicle franchisor and grants to the motorcycle or all-terrain vehicle franchisor a purchase money security interest in the new motorcycles or all-terrain vehicles, new parts and accessories purchased from the motorcycle or all-terrain vehicle franchisor;

(7) (a) Prevent, by contract or otherwise, any sale or transfer of a franchisee's franchise or franchises or interest or management thereof; provided, if the franchise specifically permits the franchisor to approve or disapprove any such proposed sale or transfer, a franchisor shall only be allowed to disapprove a proposed sale or transfer if the interest being sold or transferred when added to any other interest owned by the transferee constitutes fifty percent or more of the ownership interest in the franchise and if the proposed transferee fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to its entering into a franchise, and which relate to the proposed management or ownership of the franchise operations or to the qualification, capitalization, integrity or character of the proposed transferee and which are reasonable. A franchisee may request, at any time, that the franchisor provide a copy of the standards which are normally relied upon by the franchisor to evaluate a proposed sale or transfer and a proposed transferee;

(b) The franchisee and the prospective franchisee shall cooperate fully with the franchisor in providing information relating to the prospective transferee's qualifications, capitalization, integrity and character;

(c) In the event of a proposed sale or transfer of a franchise, the franchisor shall be permitted to exercise a right of first refusal to acquire the franchisee's assets or ownership if:

a. The franchise agreement permits the franchisor to exercise a right of first refusal to acquire the franchisee's assets or ownership in the event of a proposed sale or transfer;

b. Such sale or transfer is conditioned upon the franchisor or franchisee entering a franchise agreement with the proposed transferee;

c. The exercise of the right of first refusal shall result in the franchisee and the franchisee's owners receiving the same or greater consideration and the same terms and conditions as contracted to receive in connection with the proposed sale or transfer;

d. The sale or transfer does not involve the sale or transfer to an immediate member or members of the family of one or more franchisee owners, defined as a spouse, child, grandchild, spouse of a child or grandchild, brother, sister or parent of the franchisee owner, or to the qualified manager, defined as an individual who has been employed by the franchisee for at least two years and who otherwise qualifies as a franchisee operator, or a partnership or corporation controlled by such persons; and

e. The franchisor agrees to pay the reasonable expenses, including attorney's fees which do not exceed the usual, customary and reasonable fees charged for similar work done for other clients, incurred by the proposed transferee prior to the franchisor's exercise of its right of first refusal in negotiating and implementing the contract for the proposed sale or transfer of the franchise or the franchisee's assets. Notwithstanding the foregoing, no payment of such expenses and attorney's fees shall be required if the franchisee has not submitted or caused to be submitted an accounting of those expenses within fourteen days of the franchisee's receipt of the franchisor's written request for such an accounting. Such accounting may be requested by a franchisor before exercising its right of first refusal;

(d) For determining whether good cause exists for the purposes of this subdivision, the administrative hearing commission shall take into consideration the existing circumstances, including, but not limited to, the following factors:

a. Whether the franchise agreement specifically permits the franchisor to approve or disapprove any proposed sale or transfer;

b. Whether the interest to be sold or transferred when added to any other interest owned by the proposed transferee constitutes fifty percent or more of the ownership interest in the franchise;

c. Whether the proposed transferee fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to its entering into a franchise, and which are related to the proposed management or ownership of the franchise operations or to the qualification, capitalization, integrity or character of the proposed transferee which are reasonable;

d. Injury to the public welfare;

e. The harm to the franchisor;

(8) To prevent by contract or otherwise any motorcycle or all-terrain vehicle franchisee from changing the executive management of motorcycle or all-terrain vehicle franchisee's business, except that any attempt by a motorcycle or all-terrain vehicle franchisor to demonstrate by giving reasons that such change in executive management will be detrimental to the distribution of the motorcycle or all-terrain vehicle franchisor's motorcycles shall not constitute a violation of this subdivision;

(9) To impose unreasonable standards of performance upon a motorcycle or all-terrain vehicle franchisee;

(10) To require a motorcycle or all-terrain vehicle franchisee at the time of entering into a franchise arrangement to assent to a release, assignment, novation, waiver or estoppel which would relieve any person from liability imposed by sections 407.1025 to 407.1049;

(11) To prohibit directly or indirectly the right of free association among motorcycle or all-terrain vehicle franchisees for any lawful purpose;

(12) To provide any term or condition in any lease or other agreement ancillary or collateral to a franchise, which term or condition directly or indirectly violates the provisions of sections 407.1025 to 407.1049;

(13) Upon any termination, cancellation or refusal to continue any franchise or any discontinuation of any line-make or parts or products related to such line-make by a franchisor, fail to pay reasonable compensation to a franchisee as follows:

(a) Any new, undamaged and unsold motorcycles or all-terrain vehicles in the franchisee's inventory of either the current model year or purchased from the franchisor within one hundred twenty days prior to receipt of a notice of termination or nonrenewal, provided the motorcycle or all-terrain vehicle has less than twenty miles registered on the odometer, including mileage incurred in delivery from the franchisor or in transporting the motorcycle or all-terrain vehicle between dealers for sale, at the dealer's net acquisition cost;

(b) The current parts catalog cost to the dealer of each new, unused, undamaged and unsold part or accessory if the part or accessory is in the current parts catalog, less applicable allowances. If the part or accessory was purchased by the franchisee from an outgoing authorized franchisee, the franchisor shall purchase the part for either the price in the current parts catalog or the franchisee's actual purchase price of the part, whichever is less;

(c) The depreciated value determined pursuant to generally accepted accounting principles of each undamaged sign owned by the franchisee which bears a trademark or trade name used or claimed by the franchisor if the sign was purchased from, or purchased at the request of, the franchisor;

(d) The fair market value of all special tools, data processing equipment and motorcycle or all-terrain vehicle service equipment owned by the franchisee which were recommended in writing and designated as special tools and equipment and purchased from, or purchased at the request of, the franchisor within three years of the termination of the franchise, if the tools and equipment are in usable and good condition, except for reasonable wear and tear; and

(e) The franchisor shall pay the franchisee the amounts specified in this subdivision within ninety days after the tender of the property subject to the franchisee providing evidence of good and clear title upon return of the property to the franchisor. Unless previous arrangements have been made and agreed upon, the franchisee is under no obligation to provide insurance for the property left after one hundred eighty days;

(14) To prevent or refuse to honor the succession to a franchise or franchises by any legal heir or devisee under the will of a franchisee, under any written instrument filed with the franchisor designating any person as the person's successor franchisee, or pursuant to the laws of descent and distribution of this state; provided:

(a) Any designated family member of a deceased or incapacitated franchisee shall become the succeeding franchisee of such deceased or incapacitated franchisee if such designated family member gives the franchisor written notice of such family member's intention to succeed to the franchise or franchises within forty-five days after the death or incapacity of the franchisee, and agrees to be bound by all of the terms and conditions of the current franchise agreement, and the designated family member meets the current reasonable criteria generally applied by the franchisor in qualifying franchisees. A franchisee may request, at any time, that the franchisor provide a copy of such criteria generally applied by the franchisor in qualifying franchisees;

(b) The franchisor may request from a designated family member such personal and financial data as is reasonably necessary to determine whether the existing franchise agreement should be honored. The designated family member shall supply the personal and financial data promptly upon the request;

(c) If the designated family member does not meet the reasonable criteria generally applied by the franchisor in qualifying franchisees, the discontinuance of the current franchise agreement shall take effect not less than ninety days after the date the franchisor serves the required notice on the designated family member pursuant to subsection 5 of section 407.1031;

(d) The provisions of this subdivision shall not preclude a franchisee from designating any person as the person's successor by written instrument filed with the franchisor, and if such an instrument is filed, it alone shall determine the succession rights to the management and operation of the franchise; and

(e) For determining whether good cause exists, the administrative hearing commission shall take into consideration the existing circumstances, including, but not limited to, the following factors:

a. Whether the franchise agreement specifically permits the franchisor to approve or disapprove any successor;

b. Whether the proposed successor fails to satisfy any standards of the franchisor which are in fact normally relied upon by the franchisor prior to the successor entering into a franchise, and which relate to the proposed management or ownership of the franchise operation or to the qualification, capitalization, integrity or character of the proposed successor and which are reasonable;

c. Injury to the public welfare;

d. The harm to the franchisor;

(15) To coerce, threaten, intimidate or require a franchisee under any condition affecting or related to a franchise agreement, or to waive, limit or disclaim a right that the franchisee may have pursuant to the provisions of sections 407.1025 to 407.1049. Any contracts or agreements which contain such provisions shall be deemed against the public policy of the state of Missouri and are void and unenforceable. Nothing in this section shall be construed to prohibit voluntary settlement agreements;

(16) To initiate any act enumerated in this subsection on grounds that it has advised a franchisee of its intention to discontinue representation at the time of a franchisee change.

(L. 1998 H.B. 1055 4)



Relevant market area for motorcycle and all-terrain vehicle franchises, definitions.

407.1035. 1. For purposes of this section, "relevant market area" means:

(1) For a proposed franchisee or franchisee who plans to relocate his or her place of business in a county having a population which is greater than one hundred thousand, the area within a radius of ten miles of the intended site of the proposed or relocated franchisee. The ten-mile distance shall be determined by measuring the distance between the nearest surveyed boundary of the existing franchisee's principal place of business and the nearest surveyed boundary line of the proposed or relocated franchisee's principal place of business; or

(2) For a proposed franchisee or a franchisee who plans to relocate his or her place of business in a county having a population which is not greater than one hundred thousand, the area within a radius of twenty miles of the intended site of the proposed or relocated franchisee, or the county line, whichever is closer to the intended site. The twenty-mile distance shall be determined by measuring the distance between the nearest surveyed boundary line of the existing franchisee's principal place of business and the nearest surveyed boundary line of the proposed or relocated franchisee's principal place of business.

2. As used in this section, "relocate" and "relocation" shall not include the relocation of a franchisee within two miles of its established place of business.

3. As used in this section, "motor vehicle" shall include motorcycles and all-terrain vehicles as defined in section 407.1025.

4. Before a franchisor enters into a franchise establishing or relocating a franchisee within a relevant market area where the same line-make is represented, the franchisor shall give written notice to each franchisee of the same line-make in the relevant market area of its intention to establish an additional franchisee or to relocate an existing franchisee within that relevant market area.

5. Within thirty days after receiving the notice provided for in subsection 4 of this section, or within thirty days after the end of any appeal procedure provided by the franchisor, a franchisee may bring an action pursuant to section 407.1031 to determine whether good cause exists for the establishing or relocating of a proposed franchisee.

6. This section shall not apply to the reopening or replacement in a relevant market area of a closed dealership that has been closed within the preceding year, if the established place of business of the reopened or replacement franchisee is within two miles of the established place of business of the closed dealership.

7. In determining whether good cause exists for establishing or relocating an additional franchisee for the same line-make, the court shall take into consideration the existing circumstances, including but not limited to the following:

(1) Permanency of the investment;

(2) Effect on the retail motor vehicle business and the consuming public in the relevant market area;

(3) Whether it is injurious or beneficial to the public welfare;

(4) Whether the franchisees of the same line-make in that relevant market area are providing adequate competition and convenient consumer care for the motor vehicles of that line-make in the market area, including the adequacy of the motor vehicle sales and qualified service personnel;

(5) Whether the establishment or relocation of the franchisee would promote competition;

(6) Growth or decline of the population and the number of new motor vehicle registrations in the relevant market area; and

(7) Effect on the relocating franchisee of a denial of its relocations into the relevant market area.

8. The remedies and relief available pursuant to section 407.1049 shall apply to this section.

(L. 2003 H.B. 392)



Location of dealerships in City of St. Louis.

407.1037. When a franchised dealer or manufacturer proposes to establish or relocate a motorcycle or all-terrain vehicle dealership within any city not within a county, the dealer or manufacturer shall make reasonable efforts to establish or relocate such dealership in an area within such city that improves the equitable distribution of dealerships within such city and is conveniently located to serve minorities who reside in such city.

(L. 1998 H.B. 1055 5)



License approval in metropolitan areas, minorities.

407.1040. The Missouri department of revenue, in approving licenses for dealer franchises in any metropolitan statistical area with a population of more than one million inhabitants as defined by the federal Office of Management and Budget or its successor agency shall ensure that the community of dealer franchises shall reflect an adequate percentage of minority-owned businesses.

(L. 1998 H.B. 1055 6)



Defenses.

407.1043. It shall be a defense for a motorcycle or all-terrain vehicle franchisor, to any action brought pursuant to sections 407.1025 to 407.1049 by a motorcycle or all-terrain vehicle franchisee, if it is shown that such motorcycle or all-terrain vehicle franchisee has failed to substantially comply with reasonable and lawful requirements imposed by the franchise and other agreements ancillary or collateral thereto, or if the motorcycle or all-terrain vehicle franchisee, or any of its officers, have been convicted of a felony relevant to business honesty or business practices, or if the motorcycle or all-terrain vehicle franchisee has ceased conducting its business or has abandoned the franchise, or is insolvent as that term is defined in subdivision (23) of section 400.1-201, or has filed a voluntary petition in bankruptcy, or has made an assignment for benefit of creditors, or has been the subject of an involuntary proceeding under the Federal Bankruptcy Act or under any state insolvency law which is not vacated within twenty days from the institution thereof, or there has been an appointment of a receiver or other officer having similar powers for the motorcycle or all-terrain vehicle franchisee or the motorcycle or all-terrain vehicle franchisee's business who is not removed within twenty days from the person's appointment, or there has been a levy under attachment, execution or similar process which is not within ten days vacated or removed by payment or bonding, and it shall be a defense to any action brought pursuant to sections 407.1025 to 407.1049 that the complained of conduct by a motorcycle or all-terrain vehicle franchisor was undertaken in good faith in pursuit of rights or remedies accorded to a motorcycle or all-terrain vehicle franchisor as a seller of goods or a holder of a security interest pursuant to the provisions of chapter 400.

(L. 1998 H.B. 1055 7)



False advertising prohibited.

407.1046. No franchisee or franchisor shall use any false, deceptive or misleading advertising.

(L. 1998 H.B. 1055 8)



Compensation agreements between franchisors and franchisees engaged in sale of motorcycles and ATVs.

407.1047. 1. The provisions of this section shall apply to franchisors and franchisees engaged in the sale of motorcycles and all-terrain vehicles.

2. Each franchisor shall specify in writing to each of its franchisees in this state the franchisee's obligations for preparation, delivery, and warranty service on its products. The franchisor shall compensate the franchisee for warranty service required of the franchisee by the franchisor.

3. The franchisor shall provide the franchisee with the schedule of compensation to be paid to the franchisee for parts, work, and service, and the time allowance for the performance of the work and service. The schedule of compensation shall include reasonable compensation for diagnostic work, as well as repair service and labor. Time allowances for the diagnosis and performance of warranty work and service shall be reasonable and adequate for the work performed. In the determination of what constitutes reasonable compensation under this section, the principal factor to be given consideration shall be the prevailing wage rates being paid by the franchisees in the community in which the franchisee is doing business, and in no event shall the compensation of a franchisee for warranty labor be less than the rates charged by the franchisee for like service to retail customers for nonwarranty service and repairs, provided that such rates are reasonable.

4. A franchisor shall not:

(1) Fail to perform any warranty obligation;

(2) Fail to include in written notices of franchisor recalls to owners of new motorcycles and all-terrain vehicles the expected date by which necessary parts and equipment will be available to franchisees for the correction of the defects; or

(3) Fail to compensate any of the franchisees in this state for repairs effected by the recall.

5. All claims made by a franchisee pursuant to this section for labor and parts shall be paid within thirty days after their approval. All claims shall be either approved or disapproved by the franchisor within thirty days after their receipt on a proper form generally used by the franchisor and containing the usually required information therein. Any claims not specifically disapproved in writing within thirty days after the receipt of the form shall be considered to be approved and payment shall be made within thirty days. A claim that has been approved and paid may not be charged back to the franchisee unless the franchisor can show that the claim was fraudulent, false, or unsubstantiated, except that a charge back for false or fraudulent claims shall not be made more than two years after payment, and a charge back for unsubstantiated claims shall not be made more than fifteen months after payment. A franchisee shall maintain all records of warranty repairs, including the related time records of its employees, for at least two years following payment of any warranty claim.

6. A franchisor shall compensate the franchisee for franchisor-sponsored sales or service promotion events, programs, or activities in accordance with established guidelines for such events, programs, or activities.

7. All claims made by a franchisee pursuant to subsection 5 of this section for promotion events, programs, or activities shall be paid within twenty-five days after their approval or program close, whichever comes later. All claims except those of the type set forth in subdivisions* (1) and (2) of this subsection shall be either approved or disapproved by the franchisor within thirty days after their receipt on a proper form generally used by the franchisor and containing the usually required information therein. Any claim not specifically disapproved in writing within thirty days after the receipt of this form shall be considered to be approved, and payment shall be made within thirty days. The franchisor has the right to charge back any claim for twelve months after the later of either the close of the promotion event, program, or activity, or the date of the payment. The provisions of this subsection shall not apply to:

(1) Claims related to holdbacks, retail sales bonuses, or similar programs in which the franchisor accrues a certain portion of the vehicle sales price for the franchisee and then at a later point in time pays that amount to the franchisee, in which event the franchisor shall compensate a franchisee no later than forty-five days following the payment date that the franchisor specified in the program;

(2) Claims related to franchisor's use of a "balance forward account" to make reimbursement, in which event the franchisor shall compensate a franchisee no later than seventy-five days following the date that the franchisee properly registered the manufacturer's limited warranty for the vehicle.

(L. 2004 H.B. 1288)

*Word "subparagraphs" appears in original rolls.



Civil action, remedies.

407.1049. In addition to the administrative relief provided in sections 407.1025 to 407.1049, any motorcycle or all-terrain vehicle franchisee may bring an action in any court of competent jurisdiction against a motorcycle or all-terrain vehicle franchisor with whom the franchisee has a franchise, for an act or omission which constitutes an unlawful practice as defined in section 407.1034 to recover damages sustained by reason thereof, and, where appropriate, such motorcycle or all-terrain vehicle franchisee shall be entitled to injunctive relief, but the remedies set forth in this section shall not be deemed exclusive and shall be in addition to any other remedies permitted by law.

(L. 1998 H.B. 1055 9)



Definitions.

407.1060. As used in sections 407.1060 to 407.1068, the following terms mean:

(1) "Annuity issuer", an insurer that has issued an annuity contract to be used to fund periodic payments pursuant to a structured settlement;

(2) "Code", the United States Internal Revenue Code, United States Code Title 26, as amended from time to time;

(3) "Discounted present value", the fair present value of future payments, as determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service;

(4) "Disinterested counsel", legal counsel that has no business relationship with any transferee of structured settlement payment rights, will not receive any compensation directly or indirectly from any such transferee in connection with representing the payee, and whose compensation for representing the payee will not be affected by whether the transfer occurs or does not occur;

(5) "Interested parties", with respect to any structured settlement, the payee, any named beneficiary designated in the annuity contract or structured settlement to receive payments following the payee's death, or, if the named beneficiary is a minor, the named beneficiary's parent or guardian, the annuity issuer, and the structured settlement obligor;

(6) "Payee", an individual who is receiving tax-free damage payments pursuant to a structured settlement and who wants to make a transfer of payment rights pursuant to the structured settlement agreement;

(7) "Qualified assignment agreement", an agreement providing for a qualified assignment within the meaning of Section 130 of the Internal Revenue Code, 26 U.S.C. Sec. 130, as amended from time to time;

(8) "Settled claim", the original tort claim resolved by a structured settlement;

(9) "Structured settlement", an arrangement established by:

(a) a. Judgment or agreement in resolution of a tort claim providing for the periodic payment of damages excludable from the gross income of the recipient pursuant to Section 104(a)(2) of the Code; or

b. Agreement for the periodic payment of compensation pursuant to any workers' compensation act that is excludable from the gross income of the recipient pursuant to Section 104(a)(1) of the Code and which may be assigned pursuant to state law; and

(b) Where the periodic payments are:

a. Of the character described in subparagraphs (A) and (B) of Section 130(c)(2) of the Code; and

b. Payable by a person who is a party to the suit or agreement or to the workers' compensation claim or by a person who has assumed the liability for such periodic payments pursuant to a qualified assignment in accordance with Section 130 of the Code;

(10) "Structured settlement obligor", with respect to any structured settlement, the party that has the continuing periodic payment obligation to the payee pursuant to a structured settlement agreement or a qualified assignment agreement;

(11) "Structured settlement payment rights", rights to receive periodic payments, including lump sum payments pursuant to a structured settlement, whether from the settlement obligor or the annuity issuer, where:

(a) The payee is domiciled in this state; or

(b) The structured settlement was approved by a court of this state;

(12) "Transfer", any sale, assignment, pledge, hypothecation, or other form of alienation or encumbrance made for consideration;

(13) "Transfer agreement", the agreement providing for transfer of structured settlement payment rights from a payee to a transferee;

(14) "Transferee", a party acquiring or proposing to acquire structured settlement payment rights through a transfer from a payee.

(L. 1999 S.B. 1, et al. 3)



Structured settlement payment transfers, requirements.

407.1062. No transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of any transfer of structured settlement payment rights unless the transfer has been approved in advance in an order of a court of competent jurisdiction, based on the court's express findings that:

(1) The transfer complies with the requirements of sections 407.1060 to 407.1068 and does not contravene other applicable law;

(2) Not less than ten days prior to the date on which the payee entered into the transfer agreement, the transferee has provided to the payee a disclosure statement in bold type, no smaller than fourteen point, setting forth:

(a) The amounts and due dates of the structured settlement payments to be transferred;

(b) The aggregate amount of the payments;

(c) The discounted present value of the payments, together with the discount rate or rates used in determining the discounted present value;

(d) The gross amount payable to the payee in exchange for the payments; and

(e) An itemized listing of all brokers' commissions, service charges, application or processing fees, closing costs, filing or administrative charges, legal fees, notary fees and other commissions, fees, costs, expenses and charges payable by the payee or deductible from the gross amount otherwise payable to the payee;

(3) The transfer is in the best interest of the payee and the payee's dependents;

(4) The transferee has given written notice of the transferee's name, address and taxpayer identification number to all interested parties and has filed a copy of the notice with the court;

(5) The payee has consented in writing to the transfer;

(6) The payee has been represented by disinterested counsel in connection with the transfer or the payee understands the nature of the transaction and the economic consequences of the transaction; and

(7) The payment to be made to the payee by the transferee is equal to the fair market value of the structured settlement rights being transferred.

(L. 1999 S.B. 1, et al. 4)



Approval by court, notice.

407.1064. 1. An application pursuant to sections 407.1060 to 407.1068 for approval of a transfer of structured settlement payment rights may be brought in the circuit court in the county in which the payee is domiciled, or in any court which approved the structured settlement agreement.

2. Not less than twenty days prior to the scheduled hearing on any application for court approval of a transfer of structured settlement payment rights pursuant to section 407.1062, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the application for its approval, including in the notice:

(1) A copy of the transferee's application to the court;

(2) A copy of the disclosure statement required pursuant to subdivision (2) of section 407.1062; and

(3) Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application may be filed by interested parties, which shall be not less than ten days after service of the transferee's notice, in order to be considered by the court.

3. The provisions of sections 407.1060 to 407.1068 may not be waived.

(L. 1999 S.B. 1, et al. 5)



Right to rescind--limitation of liability--limitation of jurisdiction.

407.1066. 1. A payee who enters into a transfer agreement shall have an absolute, irrevocable right to rescind and cancel such transfer agreement, with no penalty or other obligation, by giving written notice of rescission to the transferee at any time during the five days following the signing of the transfer agreement.

2. Any provision in a transfer agreement to pay liquidated damages, penalties, fees, actual or punitive damages, attorneys' fees or costs of any kind or nature to any person, firm, corporation or other entity which will be a party or third-party beneficiary to the transfer or transfer agreement shall be unenforceable.

3. Nothing contained in sections 407.1060 to 407.1068 shall be construed to authorize any transfer of structured settlement payment rights or other rights arising under a tort claim or a workers' compensation claim in contravention of applicable law or to give effect to any transfer of such rights that is invalid under applicable law.

4. Any provision in a transfer agreement that consents to jurisdiction in the courts of another state, requires appointment of an agent for service of process, confesses judgment, or selects a forum for resolution of disputes arising out of a transfer agreement shall be unenforceable.

(L. 1999 S.B. 1, et al. 6)



Application of law.

407.1068. The provisions of sections 407.1060 to 407.1068 shall apply to any transfer of structured settlement payment rights pursuant to a transfer agreement reached on or after August 28, 1999.

(L. 1999 S.B. 1, et al. 7)



Definitions.

407.1070. As used in sections 407.1070 to 407.1085, the following terms shall mean:

(1) "Advertisement", as defined in section 407.010;

(2) "Caller identification service", a type of telephone service which permits telephone subscribers to see the telephone number of incoming telephone calls;

(3) "Consumer", a natural person who purchases, may purchase or is solicited for purchase of merchandise or an investment opportunity by a telemarketer through telemarketing;

(4) "Established business relationship", a prior or existing relationship formed by a voluntary two-way communication between a seller or telemarketer and a consumer with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the consumer regarding products or services offered by such seller or telemarketer, which relationship has not been previously terminated by either party;

(5) "Fictitious name", any name, other than the legal name, used by a seller or telemarketer;

(6) "Investment opportunity", anything tangible or intangible that is offered for sale, sold or traded based wholly or in part on representations, either express or implied, about past, present or future income, profit or appreciation;

(7) "Material aspect or element", any factor likely to significantly influence the consumer's choice of, or conduct regarding, merchandise;

(8) "Merchandise", any objects, wares, goods, commodities, intangibles, real estate or services; except that merchandise shall not include any services, goods or memberships given to a contributor by an entity, organized pursuant to Chapter 501(c)(3) of the United States Internal Revenue Code, while such entity is engaged in fund-raising to support the charitable purpose for which the entity was established provided that a bona fide member of such exempt organization makes the voice communication;

(9) "Prize", anything offered or purportedly offered or given or purportedly given to a consumer by chance. For purposes of this definition, chance exists if a consumer is guaranteed to receive anything of value and, at the time of the offer or purported offer, the telemarketer does not identify the specific item that the consumer will receive;

(10) "Promptly", at the beginning of any call initiated by a telemarketer to a consumer;

(11) "Seller", any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide merchandise to the consumer in exchange for consideration;

(12) "Telemarketer", any person, or any recorded, computer-generated, electronically generated or other voice communication of any kind, who, in connection with telemarketing, initiates or receives telephone calls to or from a consumer. A telemarketer includes, but is not limited to, any such person that is an owner, operator, officer, director or partner to the management activities of a business;

(13) "Telemarketing", a plan, program or campaign which is conducted to induce the purchase or lease of merchandise by use of one or more telephones and which involves more than one telephone call.

(L. 2000 S.B. 763)



Telemarketers, required disclosures--misrepresentations prohibited.

407.1073. 1. A telemarketer shall disclose, promptly and in a clear and conspicuous manner, to the consumer receiving the telephone call the following:

(1) That the purpose of the telephone call is to make a sale;

(2) The telemarketer's identifiable name and the seller on whose behalf the solicitation is being made;

(3) The nature of the merchandise or investment opportunity being sold;

(4) That no purchase or payment is necessary to be able to win a prize or participate in a prize promotion if a prize promotion is offered. This disclosure shall be made before or in conjunction with the description of the prize to the consumer called; and

(5) If the telephone call is made by any recorded, computer-generated, electronically generated or other voice communication of any kind. When engaged in telemarketing, such voice communication shall, promptly at the beginning of the telephone call, inform the consumer that the call is being made by a recorded, computer-generated, electronically generated or other type of voice communication, as the case may be.

2. Before a consumer pays for merchandise offered for sale through telemarketing, the telemarketer shall disclose, in a clear and conspicuous manner, the following:

(1) The seller or telemarketer's identifiable name and the address or telephone number where the seller or telemarketer can be reached;

(2) The total cost and quantity of the merchandise that is the subject of the telemarketing sales call;

(3) Any material restriction, limitation or condition to purchase, receive or use the merchandise that is the subject of a telemarketing sales call;

(4) Any material aspect of the nature or terms of the refund, cancellation, exchange or repurchase policies, including the absence of such policies;

(5) Any material aspect of an investment opportunity being offered, including benefits, the price of the land or other investment, and the location of the investment;

(6) Material elements of a prize promotion, including:

(a) The odds of being able to receive the prize and, if the odds are not calculable in advance, the factors and methods used in calculating the odds;

(b) That no purchase or payment of any kind is required to win a prize or to participate in a prize promotion;

(c) The no-purchase or no-payment method of participating in the prize promotion, with either instructions on how to participate or an address or local or toll-free telephone number to which consumers may write or call for information on how to participate; and

(d) All material conditions to receive or redeem the prize.

3. A telemarketer shall not misrepresent, directly or by implication, any of the following:

(1) A description of the prize;

(2) Its market value;

(3) The actual number of each prize to be awarded;

(4) The date by which the prize will be awarded.

4. A telemarketer shall not misrepresent any material aspect of the performance, quality, efficacy, nature or basic characteristics of merchandise that is the subject of a telemarketing sales call.

(L. 2000 S.B. 763)



Unlawful telemarketing acts or practices.

407.1076. It is an unlawful telemarketing act or practice for any seller or telemarketer to engage in the following conduct:

(1) Misrepresent any material fact required pursuant to section 407.1073. It is a defense to this subdivision if a seller or telemarketer shows, by a preponderance of the evidence, that the misrepresentation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error, and no civil penalties shall be imposed if this defense is met;

(2) Threaten, intimidate or use profane or obscene language;

(3) Cause the telephone to ring or engage any consumer in telephone conversation repeatedly or continuously in a manner a reasonable consumer would deem to be annoying, abusive or harassing;

(4) Knowingly and willfully initiate a telemarketing call to a consumer, or transfer or make available to others for telemarketing purposes a consumer's telephone number when that consumer has stated previously that he or she does not wish to receive solicitation calls by or on behalf of the seller unless such request has been rescinded;

(5) Engage in telemarketing to a consumer's residence at any time other than between 8:00 a.m. and 9:00 p.m. local time at the called consumer's location;

(6) Request or receive payment in advance to remove derogatory information from or improve a consumer's credit history, credit record or credit rating;

(7) Request or receive payment in advance from a consumer to recover or otherwise aid in the return of money or any other item lost by the consumer in a prior telemarketing transaction, except that this provision shall not apply to services provided by a licensed attorney;

(8) Obtain or submit for payment a check, draft or other form of negotiable paper drawn on a consumer's checking, savings, share or similar account without the consumer's express written or oral authorization. Such authorization shall be deemed verifiable if any of the following means are employed:

(a) Express written authorization by the consumer, which may include the consumer's signature on the negotiable instrument;

(b) Express oral authorization which is tape-recorded and made available upon request to the consumer's bank and which evidences clearly both the consumer's authorization of payment for the merchandise that is the subject of the sales offer and the consumer's receipt of all of the following information:

a. The date of the draft or drafts;

b. The amount of the draft or drafts;

c. The payor's name;

d. The number of draft payments;

e. A telephone number for consumer inquiry that is answered during normal business hours; and

f. The date of the consumer's oral authorization; or

(c) Written confirmation of the transaction, sent to the consumer prior to submission for payment of the consumer's check, draft or other form of negotiable paper, which shall include:

a. All of the information contained in paragraph (b) of this subdivision; and

b. The procedures by which the consumer can obtain a refund from the seller or telemarketer in the event that the confirmation is inaccurate;

(9) Procure the services of any professional delivery, courier or other pick-up service to obtain immediate receipt or possession of a consumer's payment, unless the merchandise or investment opportunity is delivered with the opportunity to inspect before any payment is collected;

(10) Knowingly provide assistance or support to any telemarketer when that person knows or consciously avoids knowing that the telemarketer is engaged in any act in violation of sections 407.1070 to 407.1085; or

(11) Knowingly utilize any method to block or otherwise circumvent a consumer's use of a caller identification service.

(L. 2000 S.B. 763)



Telemarketers required to keep certain records.

407.1079. 1. A seller or telemarketer shall keep for a period of twenty-four months from the date the record is produced all verifiable authorizations and records as required in sections 407.1070 to 407.1085, in the form, manner, format or place as they keep such records in the ordinary course of business, including but not limited to:

(1) All substantially different advertising, brochures, telemarketing scripts and promotional materials;

(2) For any prize with a value of twenty-five dollars or greater, the name and last known address of each prize recipient and the prize awarded;

(3) The name and last known address of each consumer, the merchandise purchased, the date such merchandise was shipped or provided and the amount paid by the consumer for the merchandise;

(4) The name, any fictitious name used, the last known home address and telephone number, and the job title for all current and former employees directly involved in telephone sales, provided, that if the seller permits fictitious names to be used by employees, each fictitious name must be traceable to only one specific employee; and

(5) All written authorizations required to be provided or received pursuant to sections 407.1070 to 407.1085.

2. For offers of consumer credit products subject to The Truth in Lending Act, 15 U.S.C. et seq., and Regulation Z, 12 CFR 226, compliance with the record-keeping requirements pursuant to The Truth in Lending Act and Regulation Z shall constitute compliance with subdivision (3) of subsection 1 of this section.

3. The seller and the telemarketer calling on behalf of the seller may, by written agreement, allocate responsibility between themselves for the record keeping required by this section. When a seller and telemarketer have entered into such an agreement, the terms of the agreement shall govern, and the seller or telemarketer, as the case may be, need not keep records that duplicate those of the other. If the agreement is unclear as to who must maintain any required record, or if no such agreement exists, the seller shall be responsible for complying with subdivisions (1), (2), (3) and (5) of subsection 1 of this section and the telemarketer shall be responsible for complying with subdivision (4) of subsection 1 of this section.

4. In the event of any dissolution or termination of the telemarketer's business, the telemarketer shall maintain all records as required pursuant to this section. In the event of any sale, assignment or other change in ownership of the seller's business, the successor shall maintain all records required pursuant to this section.

(L. 2000 S.B. 763)



Penalties--criminal penalties--civil damages.

407.1082. 1. It is unlawful pursuant to section 407.020 to violate any provision of sections 407.1070 to 407.1085 or to misrepresent or omit the required disclosures of section 407.1073 or 407.1076, and pursuant to sections 407.010 to 407.130, the violator shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.130. The remedies available in this section are cumulative and in addition to any other remedies available by law.

2. Any person who willfully and knowingly engages in any act or practice declared to be unlawful by any provision of subdivisions (2) to (5) of section 407.1076 shall be guilty of a class A misdemeanor. Any person who willfully and knowingly engages in any act or practice declared to be unlawful by any provision of subdivision (1) of section 407.1076, or of subdivisions (6) to (11) of section 407.1076, shall be guilty of a class D felony. Any person previously convicted of a class D felony pursuant to this subsection shall, for each subsequent conviction, be guilty of a class D felony punishable by the term of years set out for a class D felony, but with a fine of not more than five thousand dollars or a fine equal to triple the gain, with no limit on the amount recoverable pursuant to any triple-the-gain penalty. Any person who willfully and knowingly fails to keep the records required in section 407.1079 shall be guilty of a class A misdemeanor.

3. In addition to the remedies already provided in sections 407.1070 to 407.1085, any consumer that suffers a loss or harm as a result of any unlawful telemarketing act or practice pursuant to section 407.1076 may recover actual and punitive damages, reasonable attorney's fees, court costs and any other remedies provided by law.

(L. 2000 S.B. 763)



Exemptions--attorney general to receive complaints.

407.1085. 1. The following acts or practices are exempt from the provisions of sections 407.1070 to 407.1082:

(1) Telephone calls in which the sale of merchandise is not completed, and payment or authorization of payment is not required, until after a face-to-face sales presentation by the telemarketer or seller; or

(2) Telephone calls in which the sale of merchandise is completed and a written contract is forwarded to the consumer so long as the consumer may return the merchandise within fourteen days of receipt of the merchandise and receive a refund of any moneys paid except for any coverage, fees or services earned; provided that the telemarketer shall inform the consumer at the time of the call that:

(a) A written contract regarding the sale of the merchandise will be forwarded to the consumer;

(b) The approximate date of the delivery of the merchandise; and

(c) The consumer will have a right to terminate the contract within fourteen days of receipt of the merchandise, and upon returning the merchandise, shall have a right to a refund as provided in this subdivision.

The term "merchandise" as used in this subdivision shall mean merchandise sold by a person, institution or company that is under the direction and supervision of the director of the department of insurance, financial institutions and professional registration or federally chartered banks, savings and loans and credit unions, but shall not mean a person or company that is under the direction and supervision of the director of the division of professional registration or any board assigned thereto;

(3) Telephone calls initiated by a consumer that:

(a) Are not the result of any advertisement by a seller or telemarketer;

(b) Are in response to an advertisement through any media, other than direct mail or telemarketing, which discloses the name of the seller and the identity of the merchandise; provided that, this exemption shall not apply to calls initiated by the consumer in response to an advertisement that offers a prize or investment opportunity, or is used to engage in telemarketing activities prohibited by subdivision (6) or (7) of section 407.1076; or

(c) Are in response to direct mail solicitations that clearly and conspicuously disclose and do not misrepresent the material information required by subsection 2 of section 407.1073; provided that, this exemption does not apply to calls initiated by the consumer in response to an advertisement that offers a prize or investment opportunity, or is to engage in telemarketing activities prohibited by subdivision (6) or (7) of section 407.1076; or

(d) Are in response to the mailing of a catalog which contains a written description or illustration of the goods or services offered for sale; includes the business address of the seller, includes multiple pages of written materials or illustrations; and has been issued not less frequently than once a year, when the seller or telemarketer does not contact consumers by telephone but only receives calls initiated by consumers in response to the catalog, and stops further solicitation of items not in a catalog when the consumer states that he or she is not interested in any further solicitations; or

(4) Telephone calls or messages:

(a) To any consumer with such consumer's prior express invitation or permission;

(b) To any consumer with whom the seller has an established business relationship; or

(c) By or on behalf of any entity over which either a state or federal agency has regulatory authority to the extent that:

a. Subject to such authority, the entity is required to maintain a license, registration, certificate or permit to sell or provide the merchandise being offered through telemarketing; and

b. As of August 28, 2000, the state or federal agency has, directly or through a delegation of authority which is enforceable pursuant to state or federal law, promulgated rules that regulate the telemarketing sales practices of the entity for the merchandise that entity offers through telemarketing and are reasonably consistent with the requirements of section 407.1070 through section 407.1079 and which allow consumer redress pursuant to that agency's rules or applicable federal law;

(d) Between a telemarketer and any business except calls involving the retail sale of nondurable office and cleaning supplies.

2. The office of the attorney general shall receive telemarketing complaints by means of a toll-free telephone number, by a notice in writing or by electronic means. Complaints against entities who are licensed, certificated or permitted and whose telemarketing practices are regulated by the same state or federal agency and which agency has rules regulating telemarketing practices shall be forwarded for investigation by the office of the attorney general to such agency. All other complaints shall be handled by the office of the attorney general.

(L. 2000 S.B. 763, A.L. 2008 S.B. 788)



Required disclosures for entities soliciting contributions.

407.1090. When any entity is paid for soliciting contributions via telephone calls, and the pay is based on contributions received as a result of the phone call, the entity making the calls must disclose immediately to all called parties the net percentage of contributions that go to the organization for which the contribution is solicited.

(L. 2000 S.B. 763 1)



Definitions.

407.1095. As used in sections 407.1095 to 407.1110, the following words and phrases mean:

(1) "Caller identification service", a type of telephone service which permits telephone subscribers to see the telephone number of incoming telephone calls;

(2) "Residential subscriber", a person who, for primarily personal and familial use, has subscribed to residential telephone service, wireless service or similar service, or the other persons living or residing with such person;

(3) "Telephone solicitation", any voice, facsimile, short messaging service (SMS), or multimedia messaging service (MMS), for the purpose of encouraging the purchase or rental of, or investment in, property, goods or services, but does not include communications:

(a) To any residential subscriber with that subscriber's prior express invitation or permission;

(b) By or on behalf of any person or entity with whom a residential subscriber has had a business contact within the past one hundred eighty days or a current business or personal relationship;

(c) By or on behalf of an entity organized pursuant to Chapter 501(c)(3) of the United States Internal Revenue Code, while such entity is engaged in fund-raising to support the charitable purpose for which the entity was established provided that a bona fide member of such exempt organization makes the voice communication;

(d) By or on behalf of any entity over which a federal agency has regulatory authority to the extent that:

a. Subject to such authority, the entity is required to maintain a license, permit or certificate to sell or provide the merchandise being offered through telemarketing; and

b. The entity is required by law or rule to develop and maintain a no-call list;

(e) By a natural person responding to a referral, or working from his or her primary residence, or a person licensed by the state of Missouri to carry out a trade, occupation or profession who is setting or attempting to set an appointment for actions relating to that licensed trade, occupation or profession within the state or counties contiguous to the state.

(L. 2000 S.B. 763, A.L. 2012 H.B. 1549)



Telephone solicitation of member on no-call list prohibited.

407.1098. No person or entity shall make or cause to be made any telephone solicitation to any residential subscriber in this state who has given notice to the attorney general, in accordance with rules promulgated pursuant to section 407.1101 of such subscriber's objection to receiving telephone solicitations.

(L. 2000 S.B. 763, A.L. 2012 H.B. 1549)



Attorney general to create no-call list database--rules--inclusion of national database--database not a public record--no cost to subscribers.

407.1101. 1. The attorney general shall establish and provide for the operation of a database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations. Such list is not intended to include any telephone number primarily used for business or commercial purposes.

2. The attorney general shall promulgate rules and regulations governing the establishment of a state no-call database as he or she deems necessary and appropriate to fully implement the provisions of sections 407.1095 to 407.1110. The rules and regulations shall include those which:

(1) Specify the methods by which each residential subscriber may give notice to the attorney general or its contractor of his or her objection to receiving such solicitations or revocation of such notice. There shall be no cost to the subscriber for joining the database;

(2) Specify the length of time for which a notice of objection shall be effective and the effect of a change of telephone number on such notice;

(3) Specify the methods by which such objections and revocations shall be collected and added to the database;

(4) Specify the methods by which any person or entity desiring to make telephone solicitations will obtain access to the database as required to avoid calling the telephone numbers of residential subscribers included in the database, including the cost assessed to that person or entity for access to the database;

(5) Specify such other matters relating to the database that the attorney general deems desirable.

3. If the Federal Communications Commission establishes a single national database of telephone numbers of subscribers who object to receiving telephone solicitations pursuant to 47 U.S.C. Section 227(c)(3), the attorney general shall include that part of such single national database that relates to Missouri in the database established pursuant to this section.

4. Information contained in the database established pursuant to this section shall be used only for the purpose of compliance with section 407.1098 and this section or in a proceeding or action pursuant to section 407.1107. Such information shall not be considered a public record pursuant to chapter 610.

5. In April, July, October and January of each year, the attorney general shall be encouraged to obtain subscription listings of residential subscribers in this state who have arranged to be included on any national do-not-call list and add those telephone numbers to the state do-not-call list.

6. The attorney general may utilize moneys appropriated from general revenue and moneys appropriated from the merchandising practices revolving fund established in section 407.140 for the purposes of establishing and operating the state no-call database.

7. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in sections 407.1095 to 407.1110 shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2000, shall be invalid and void.

(L. 2000 S.B. 763, A.L. 2012 H.B. 1549)



Caller identification service, telephone solicitor not to interfere with subscriber's use of service.

407.1104. 1. Any person or entity who makes a telephone solicitation to any residential subscriber in this state shall, at the beginning of such solicitation, state clearly the identity of the person or entity initiating the solicitation.

2. No person or entity who makes a telephone solicitation to a residential subscriber in this state shall knowingly use any method to block or otherwise circumvent any subscriber's use of a caller identification service.

(L. 2000 S.B. 763 407.1107, A.L. 2012 H.B. 1549)



Penalties, attorney general to enforce--civil, criminal, injunctive relief--private actions--defenses--statute of limitations.

407.1107. 1. The attorney general may initiate proceedings relating to a knowing violation or threatened knowing violation of section 407.1098 or 407.1104. Such proceedings may include, without limitation, an injunction, a civil penalty up to a maximum of five thousand dollars for each knowing violation and additional relief in any court of competent jurisdiction. The attorney general may issue investigative demands, issue subpoenas, administer oaths and conduct hearings in the course of investigating a violation of section 407.1098 or 407.1104.

2. In addition to the penalties provided in subsection 1 of this section, any person or entity that violates section 407.1104 shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.130. The remedies available in this section are cumulative and in addition to any other remedies available by law.

3. Any person who has received more than one telephone solicitation within any twelve-month period by or on behalf of the same person or entity in violation of section 407.1098 or 407.1104 may either:

(1) Bring an action to enjoin such violation;

(2) Bring an action to recover for actual monetary loss from such knowing violation or to receive up to five thousand dollars in damages for each such knowing violation, whichever is greater; or

(3) Bring both such actions.

4. It shall be a defense in any action or proceeding brought pursuant to this section that the defendant has established and implemented, with due care, reasonable practices and procedures to effectively prevent telephone solicitations in violation of section 407.1098 or 407.1104.

5. No action or proceeding may be brought pursuant to this section:

(1) More than two years after the person bringing the action knew or should have known of the occurrence of the alleged violation; or

(2) More than two years after the termination of any proceeding or action arising out of the same violation or violations by the state of Missouri, whichever is later.

6. A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator as to an action or proceeding authorized by this section in the manner otherwise provided by law.

7. The remedies, duties, prohibitions and penalties of sections 407.1095 to 407.1107 are not exclusive and are in addition to all other causes of action, remedies and penalties provided by law.

8. No provider of telephone caller identification service shall be held liable for violations of section 407.1098 or 407.1104 committed by other persons or entities.

(L. 2000 S.B. 763 407.1110, A.L. 2012 H.B. 1549)



Advisory group for consumer protection from telemarketers--publication of information on consumer rights.

407.1110. The attorney general shall establish an advisory group composed of government entities, local telecommunications companies, businesses, and senior citizen and other community advocates to compile and promote a list of educational literature to help consumers understand their options with regard to telephone solicitations. The attorney general shall work with local exchange telecommunications companies to disseminate to their residential subscribers information about the availability of and instructions about how to request educational literature from the attorney general. The attorney general may enter into agreements with those companies for the purpose of dissemination of the educational literature. The attorney general shall include on his or her internet website information that informs residential subscribers of their rights to be placed on a no-call list and the various methods, including notice to the attorney general, of placing their names on this no-call list. The attorney general shall have this literature developed for dissemination to the public no later than January 1, 2001.

(L. 2000 S.B. 763 407.1113)



Definitions.

407.1120. As used in sections 407.1120 to 407.1132, the following terms mean:

(1) "Assist the transmission", actions taken by a person to provide substantial assistance or support which enables any person to formulate, compose, send, originate, initiate or transmit a commercial electronic mail message;

(2) "Commercial electronic mail message", an electronic mail message sent for the purpose of promoting real property, goods or services for sale or lease. Commercial electronic mail message does not include:

(a) An electronic mail message to which an interactive computer service provider has attached an advertisement in exchange for free use of an electronic mail account, when the user has agreed to such an arrangement;

(b) An electronic mail message between persons with a prior business relationship; or

(c) An electronic mail message between persons with a personal relationship;

(3) "Electronic mail address", a destination, commonly expressed as a string of characters, to which electronic mail may be sent or delivered;

(4) "Initiate the transmission", the action by the original sender of an electronic mail message, but not the action by any intervening interactive computer service that may handle or retransmit the message, unless such intervening interactive computer service assists in the transmission of an electronic mail message when it knows, or consciously avoids knowing, that the person initiating the transmission is engaged, or intends to engage, in any act or practice that violates sections 407.1120 to 407.1132;

(5) "Interactive computer service", any information service, system or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the internet and such systems operated or services offered by libraries or educational institutions;

(6) "Internet domain name", a globally unique, hierarchical reference to an internet host or service, assigned through centralized internet naming authorities, comprising a series of character strings separated by periods, with the right-most string specifying the top of the hierarchy.

(L. 2000 S.B. 763 407.1300)

Contingent expiration date, see 407.1132



Unsolicited electronic mail without either return email address or toll-free number prohibited

407.1123. 1. No person or entity conducting business in this state shall electronically mail (email) or cause to be emailed documents consisting of advertising material for the lease, sale, rental, gift offer or other disposition of any realty, goods, services or extensions of credit without a toll-free telephone number or valid sender-operated return email address that the recipient of the unsolicited documents may call or email to notify the sender not to email any further unsolicited documents.

2. It is an unlawful merchandising practice pursuant to section 407.020 to assist in the transmission of an unsolicited commercial electronic mail message when the person providing the assistance knows, or consciously avoids knowing, that the initiator of the commercial electronic mail message is engaged, or intends to engage, in any act or practice that violates sections 407.1120 to 407.1132.

3. As used in this section, the phrase "assist or initiate the transmission" does not include or refer to the transmission of any commercial electronic mail message by a telecommunications utility or internet service provider to the extent that the telecommunications utility or internet service provider merely carries such transmission over its network.

(L. 2000 S.B. 763 407.1310)

Contingent expiration date, see 407.1132



Penalties.

407.1126. It is an unlawful merchandising practice pursuant to section 407.020 to violate the provisions of sections 407.1120 to 407.1132.

(L. 2000 S.B. 763 407.1320)

Contingent expiration date, see 407.1132



Damages.

407.1129. 1. Damages to the recipient of a commercial electronic mail message sent in violation of sections 407.1120 to 407.1132 are five hundred dollars, or actual damages, whichever is greater.

2. Damages to an interactive computer service resulting from a violation of sections 407.1120 to 407.1132 are one thousand dollars, or actual damages, whichever is greater.

(L. 2000 S.B. 763 407.1330)

Contingent expiration date, see 407.1132



Interactive computer service may block certain electronic mail without liability--federal law to control if enacted.

407.1132. 1. An interactive computer service may, upon its own initiative, block the receipt or transmission through its service of any commercial electronic mail that it reasonably believes is, or will be, sent in violation of sections 407.1120 to 407.1132.

2. No interactive computer service may be held liable for any action voluntarily taken in good faith to block the receipt or transmission through its service of any commercial electronic mail which it reasonably believes is, or will be, sent in violation of sections 407.1120 to 407.1132.

3. Sections 407.1120 to 407.1132 shall be of no force and effect on and after the date that federal law is enacted that prohibits or otherwise regulates the transmission of unsolicited commercial electronic mail messages.

(L. 2000 S.B. 763 407.1340)

Contingent expiration date, see subsection 3 of this section



Definitions.

407.1135. As used in sections 407.1135 to 407.1141, the following words and phrases mean:

(1) "Commercial electronic mail", an electronic mail message sent for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services;

(2) "Electronic mail address", a destination, commonly expressed as a sequence of characters, to which commercial electronic mail may be sent or delivered;

(3) "Established business relationship", an existing relationship formed by a voluntary communication between a person or entity and the recipient with or without an exchange of consideration, on the basis of an inquiry, application, purchase, or use by the recipient regarding products or services offered by such person or entity;

(4) "Initiate the transmission", the action by the original sender of an unsolicited commercial electronic mail solicitation that results in receipt by a subscriber of that solicitation, including commercial electronic mail received by a subscriber which was sent by a third party at the request of or direction of the original sender;

(5) "Subscriber", any person, corporation, partnership, or other entity who has subscribed to an interactive computer service and has been designated with one or more electronic mail addresses;

(6) "Unsolicited commercial electronic mail", a commercial electronic mail message sent without the consent of the recipient, by a person with whom the recipient does not have an established business relationship, other than:

(a) A commercial electronic mail message responding to an inquiry from a subscriber who has requested further information and provided a commercial electronic mail address;

(b) A commercial electronic mail message initiated by a person licensed by the state of Missouri to carry out a trade, occupation, or profession who is setting or attempting to set an appointment for actions related to that licensed trade, occupation, or profession;

(c) A commercial electronic mail message sent to a subscriber that was in an established business relationship with the sender, including a parent or subsidiary business organization of the sender that shares the same brand name, within the previous twenty-four months unless the recipient requests to be removed from the entity's electronic mail list in accordance with section 407.1123;

(d) A commercial electronic mail communication sent to a subscriber from an original sender which is a bank, farm credit service, or credit union shall not be considered unsolicited commercial electronic mail for purposes of sections 407.1135 to 407.1141;

(e) A commercial electronic mail message that is sent to a subscriber from an original sender who has a personal relationship with the subscriber; or

(f) A commercial electronic mail message from the original sender that is indirectly received by a subscriber when another subscriber voluntarily forwards that communication without the knowledge of the original sender and without any consideration provided by the original sender to the subscriber forwarding the communication.

(L. 2003 H.B. 228)



Prohibited acts--rulemaking authority, attorney general.

407.1138. 1. It shall be a violation of this section for any person or entity who initiates the transmission of any commercial electronic mail message to any subscriber in this state to provide a false identity or false or misleading information in the subject line.

2. It shall be a violation of this section for any person that sends an unsolicited commercial electronic mail message to fail to use the exact characters "ADV:" as the first four characters in the subject line of the unsolicited commercial electronic mail message.

3. It shall be a violation of this section for any person that sends an unsolicited commercial electronic mail message that contains obscene material as defined in section 573.010 or references a website that contains obscene material to fail to use the exact characters "ADV:ADLT" as the first eight characters in the subject line of the unsolicited commercial electronic mail message that contains obscene material.

4. It shall be a violation of this section to initiate the transmission of any unsolicited commercial electronic mail to a subscriber in this state who has notified a sender not to initiate the transmission of any further unsolicited commercial electronic mail. For purposes of this subsection, a subscriber is deemed to have notified a sender not to initiate the transmission of any further unsolicited commercial electronic mail if the subscriber:

(1) Replies to a sender at the valid sender-operated return electronic mail address or the sender's toll-free telephone number with directions not to initiate the transmission of any further unsolicited commercial electronic mail as provided in section 407.1123; or

(2) Otherwise gives actual notice to a sender not to initiate the transmission of further unsolicited commercial electronic mail; or

(3) Notifies the attorney general if a sender fails to provide a toll-free telephone number or valid sender-operated return electronic mail address as required by section 407.1123.

5. The attorney general shall promulgate rules and regulations as he or she deems necessary and appropriate to fully implement the provisions of sections 407.1135 to 407.1141.

(L. 2003 H.B. 228 407.1144)



Attorney general to initiate proceedings for violation--penalties--defenses--action barred, when.

407.1141. 1. The attorney general may initiate proceedings relating to a knowing violation of sections 407.1135 to 407.1141. Such proceedings may include an injunction, a civil penalty up to a maximum of five thousand dollars for each knowing violation, not to exceed twenty-five thousand dollars per day, in any court of competent jurisdiction. The attorney general may issue investigative demands, issue subpoenas, administer oaths, and conduct hearings in the course of investigating a violation of sections 407.1135 to 407.1141.

2. In addition to the penalties provided in subsection 1 of this section, any person or entity that violates sections 407.1135 to 407.1141 shall be subject to all penalties, remedies and procedures provided in sections 407.010 to 407.130. The remedies available in this section are cumulative and in addition to any other remedies available by law. Any civil penalties recovered pursuant to this section shall be credited to the merchandising practices revolving fund.

3. It shall be a defense in any action or proceeding brought pursuant to this section that the defendant has established and implemented, with due care, reasonable practices and procedures to effectively prevent the transmission of unsolicited commercial electronic mail messages in violation of section 407.1138.

4. No action or proceeding may be brought pursuant to this section:

(1) More than two years after the person bringing the action knew or should have known of the occurrence of the alleged violation; or

(2) More than two years after the termination of any proceeding or action arising out of the same violation or violations by the state of Missouri, whichever is later.

5. A court of this state may exercise personal jurisdiction over any nonresident or his or her executor or administrator as to an action or proceeding authorized by this section in the manner otherwise provided by law.

6. No telecommunications utility, electronic mail service provider, or internet service provider shall be liable for violations of section 407.1138 when:

(1) It is an intermediary between the sender and recipient in the transmission of an email that violates sections 407.1135 to 407.1141; or

(2) It provides transmission of unsolicited commercial electronic mail messages over the provider's computer network or facilities; or

(3) It voluntarily takes action in good faith to block the receipt or transmission through its service of any electronic mail advertisements that it believes are, or will be, sent in violation of sections 407.1135 to 407.1141.

(L. 2003 H.B. 228 407.1147)



Definitions.

407.1240. As used in sections 407.1240 to 407.1252, the following terms shall mean:

(1) "Business day", every day except Sundays and holidays;

(2) "Holiday", any day that the United States Post Office is closed;

(3) "Membership fee", the initial or reoccurring fee that is unrelated to actual pass-through costs associated with the use and enjoyment of travel benefits;

(4) "Rescission statement", a statement that shall be printed on all contracts pertaining to the purchase of travel club memberships from a travel club that shall provide in at least fourteen-point bold type the following statement:

"Assuming you have returned to the travel club all materials delivered to the purchaser at closing, you have the right to rescind this transaction for a period of three business days after the date of this agreement. To exercise the right of rescission, you must deliver to the travel club, either in person or by first class mail postmarked within the three-business-day period, at the address referenced in this contract, a written statement of your desire to rescind this transaction, and all materials of value that were provided and given to you at the time of the purchase of your travel club membership.";

(5) "Surety bond", any surety bond, corporate guaranty, letter of credit, certificate of deposit, or other bond or financial assurance in the sum of fifty thousand dollars that is required to be delivered by travel clubs which have been adjudged to have violated subsection 4 or 5 of section 407.1252 and in the event that such surety bond is accessed subsequent to posting as a result of the need to reimburse purchasers, the amount of the surety bond shall be increased by ten thousand dollars per reimbursement. All surety bonds shall:

(a) Serve as a source of funds to reimburse purchasers of travel club memberships who validly exercise their rights under the rescission statement in their contract but who are not, after judgment, provided a refund equal to the purchase price of their unused travel club memberships or, after settlement, equal to the terms of the settlement;

(b) Serve as a source of funds to reimburse purchasers of travel club memberships who have been proven to be the subject of fraud;

(c) Remain in full force and effect during the period of time the travel club conducts its business activities; and

(d) Be deemed acceptable to the attorney general if:

a. It is issued by an insurance company that possesses at least a "B+" rating, or its equivalent by A.M. Best or its successors or by any other nationally recognized entity that rates the creditworthiness of insurance companies;

b. It is in the form of a letter of credit that is issued by a banking institution with assets of at least seventy-five million dollars;

c. It is in the form of a certificate of deposit; or

d. It is in a form that otherwise is acceptable to the attorney general;

(6) "Travel benefits", benefits that are offered to travel club purchasers and customers that include all forms of overnight resort, condominium, time-share, hotel, motel, and other rental housing of every nature; all forms of air travel and rental car access; all forms of cruise line access; and all other forms of discounted travel benefits of every nature;

(7) "Travel club", any business enterprise that either directly, indirectly, or through the use of a fulfillment company or other third party offers to sell to the public the reoccurring right to purchase travel benefits at prices that are represented as being discounted from prices otherwise not generally available to the public and charges members or customers a membership fee that collectively equals no less than seven hundred fifty dollars.

(L. 2005 S.B. 274, A.L. 2006 S.B. 1216, A.L. 2009 H.B. 83)



Registration statement required, content--approval by attorney general, procedure--grandfather clause.

407.1243. 1. No travel club may offer vacation benefits for sale unless the travel club maintains an effective registration statement with the Missouri attorney general that discloses the following information:

(1) The name of the travel club, including the name under which the travel club is doing or intends to do business, if it is different from the name of the travel club;

(2) The name of any parent or affiliated organization that will engage in business transactions with the purchasers of travel benefits or accept responsibility for statements made by, or acts of, the travel club that relate to sales solicited by the travel club;

(3) The travel club's business type and place of organization;

(4) If the travel club is an entity, the travel club's formation and governing documents, including articles of organization, bylaws, operating agreements, and partnership agreements;

(5) If operating under a fictitious business name, the location where the fictitious name has been registered and the same information for any parent or affiliated organization disclosed under subdivision (2) of this subsection;

(6) The names and addresses of the principal owners, officers, and directors of the travel club;

(7) The addresses where the travel club shall offer travel club memberships for sale;

(8) The name and address of the registered agent in the state of Missouri for service of process for the travel club;

(9) A brief description of the travel club memberships the travel club is offering for sale; and

(10) The travel club has demonstrated that it possesses liquid assets of at least two hundred fifty thousand dollars in the form of one or more certificates of deposit or a letter of credit that is issued by a banking institution with assets of at least seventy-five million dollars. This provision shall also apply to renewals under section 407.1246. These liquid assets shall be available to the attorney general in the event that the travel club is adjudged to have failed to satisfy legal obligations to its members. Interest on any instrument provided shall accrue to the travel club.

2. The attorney general shall evidence his or her receipt, approval, or disapproval, as the case may be, of a travel club's registration statement or registration renewal statement within thirty days from and after the submission. Upon compliance with the foregoing requirements, the attorney general shall approve the registration statement. Should any registration fail to address any of the registration conditions as set forth above, the attorney general shall advise in writing the registration deficiencies and the manner in which said deficiencies shall be cured. Such advice shall be provided by the attorney general within fifteen working days from the initial filing of the documents.

3. Travel clubs that are operational prior to August 28, 2005, may continue their business activities during the pendency of the attorney general's processing of their registration statements; provided that such registration statement is filed with the attorney general within ninety calendar days of August 28, 2005. Registration of a travel club shall not be transferable.

4. The registration statement shall additionally have appended thereto:

(1) The form of contract under which the travel club proposes to sell travel club memberships which contains the rescission statement;

(2) A check made to the order of the Missouri attorney general in the amount of fifty dollars.

(L. 2005 S.B. 274, A.L. 2009 H.B. 83)



Renewal of registration, procedure, fee.

407.1246. Each travel club registered under sections 407.1240 to 407.1252 may renew its registration by filing with the attorney general a registration renewal statement containing all of the information required in section 407.1243 within thirty calendar days of the anniversary date of the attorney general's issuance of its approval of the travel club's registration statement. The attorney general may charge an annual renewal fee in a sum not to exceed fifty dollars.

(L. 2005 S.B. 274)



Right to rescind and cancel, time period allowed.

407.1249. Assuming a purchaser returns to the travel club all materials of value delivered to the purchaser at closing, all purchasers of travel club memberships from a travel club that is registered shall have the nonwaivable right for a period of three business days after the date of their purchase to rescind and cancel their travel club purchase and receive a full refund of all sums otherwise paid to the travel club within fifteen business days of such rescission, minus the actual and reasonable cost of processing the refund, including credit card fees if applicable. Use of travel club benefits during such rescission period shall not waive the right afforded by this section. Individuals who purchase travel club memberships from a travel club that is not registered under sections 407.1240 to 407.1252 shall have a nonwaivable right for a period of three years from the date of purchase to rescind and cancel their travel club membership and shall receive a full refund within fifteen business days of such rescission.

(L. 2005 S.B. 274, A.L. 2006 S.B. 1216, A.L. 2009 H.B. 83)



Complaint procedure--violations, remedy.

407.1252. 1. Any individual who purchases a travel club membership from a travel club and has a complaint resulting from that purchase transaction has the option, in addition to filing a civil suit, to file a written complaint with the office of the state attorney general, or the county prosecuting attorney. The office which receives the complaint shall deliver to the travel club that is the subject of the complaint, by registered mail within ten working days, all written complaints received under this section in their entirety. Should the office receiving the complaint, including the attorney general, fail to deliver the complaint as stated herein, any action subsequently filed on the complaint shall be stayed for a period of thirty business days from the date the club is first notified and provided the written complaint, thereby allowing the travel club that is the subject of the complaint an opportunity to cure the complaint as provided in subsection 2 of this section.

2. Prior to being subject to any remedies available under sections 407.1240 to 407.1252, a travel club shall have thirty business days following the date that a filed complaint is provided to the travel club to cure any grievances stated in the complaint. The parties shall not seek other forms of redress during this period. Upon satisfaction or settlement of any complaint, the parties shall execute a written mutual release which shall contain the terms of the settlement and operate to remove the matters contained in the release as a basis for further action by any entity or person under this chapter. Any payments to be made under a settlement shall be made within fifteen business days of the signing date of the settlement.

3. (1) The attorney general, prosecuting attorney, or complainant may bring an action in a court of competent jurisdiction to enjoin a violation of sections 407.1240 to 407.1252 if the conditions for a violation of sections 407.1240 to 407.1252 have been met.

(2) A person who violates any provision of sections 407.1240 to 407.1252 is guilty of a class D felony and shall be subject to a penalty of ten thousand dollars. Any fines collected under this subsection shall be transferred to the state school moneys fund as established in section 166.051 and distributed to the public schools of this state in the manner provided in section 163.031.

4. Any travel club registered to operate in this state which has been adjudged to have failed to provide a refund equal to the purchase price of the unused travel benefits of a person who has validly exercised his or her rights of rescission under sections 407.1240 to 407.1252 within fifteen business days of such valid exercise or has been adjudged to have failed to honor a settlement agreement entered into under the provisions of sections 407.1240 to 407.1252 shall post a surety bond upon the earlier of a judgment entered on said violations or its next annual registration.

5. Any travel club registered to operate in this state which has been adjudged to have engaged in fraud in the procurement or sale of contracts shall be required to post a security bond upon the earlier of the judgment finding such or its next annual registration.

(L. 2005 S.B. 274)



Definitions.

407.1320. As used in sections 407.1320 to 407.1346, the following terms shall mean:

(1) "Area of sales responsibility", the geographical area agreed to by the dealer and manufacturer in the RV manufacturer/dealer agreement in which the dealer has the exclusive right to sell those vehicles identified in the dealer agreement;

(2) "Camping trailer", a vehicle mounted on wheels and constructed with collapsible partial side walls that fold for towing by another vehicle and unfold at the campsite to provide temporary living quarters for recreational, camping or travel use;

(3) "Dealer", any person, firm, corporation or business entity that engages in selling new recreation vehicles pursuant to a signed RV manufacturer/dealer agreement with a manufacturer and is licensed to conduct business in this state;

(4) "Distributor", any person, firm, corporation or business entity that purchases new RVs for resale to RV dealers;

(5) "Factory campaign", an effort on the part of a warrantor to contact recreation vehicle owners and/or dealers in order to address a part and/or equipment issues;

(6) "Family member", a spouse, child, grandchild, parent, sibling, niece, nephew and spouse of any of the above;

(7) "Fifth-wheel trailer", a vehicle, mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use, of such size or weight as to not require a special highway movement permit, of gross trailer area not to exceed four hundred square feet (37.2m2) in the set-up mode, and designed to be towed by a motorized vehicle that contains a towing mechanism that is mounted above or forward of the tow vehicle's rear axle;

(8) "Good cause", for purposes of determining whether there is good cause for a proposed action, the following factors shall be considered:

(a) The extent of the affected dealer's penetration in the relevant market area;

(b) The nature and extent of the dealer's investment in its business;

(c) The adequacy of the dealer's service facilities, equipment, parts, supplies, and personnel;

(d) The effect of the proposed action on the community;

(e) The extent and quality of the dealer's service under RV warranties; and

(f) The dealer's performance under the terms of its RV dealer agreement;

(9) "Line-make", a group of recreation vehicles that have all of the following characteristics:

(a) They are offered for sale, lease, or distribution under a common name, trademark, service mark, or brand name of the manufacturer or distributor of those recreation vehicles; and

(b) They are targeted to a particular market segment, as determined by their decor, features, equipment, weight, size and price range; and

(c) They are all of a single, distinct classification of recreation vehicle product type having a substantial degree of commonality in construction of chassis, frame, and body; and

(d) They are all of the same model that is distinguishable by length and interior floor plan from other recreation vehicles within the same product type, notwithstanding the fact that the model may share some or most of the same decor, features, equipment, weight, and price range; and

(e) The dealer is specifically authorized to sell as new that particular line-make and model of recreation vehicle under the terms of the dealer's existing agreement with the manufacturer or distributor of that recreation vehicle;

(10) "Manufacturer", any person, firm, corporation or business entity that engages in the manufacturing of recreation vehicles;

(11) "Motor home", a vehicle which is designed to provide temporary living quarters and which:

(a) Is built onto as an integral part of, or permanently attached to, a motor vehicle chassis; and

(b) Contains at least four of the following independent life systems if each is permanently installed and designed to be removed only for purposes of repair or replacement and meets the American National Standards Institute standards for recreation vehicles:

a. A cooking facility with an onboard fuel source;

b. A gas or electric refrigerator;

c. A toilet with exterior evacuation;

d. A heating or air conditioning system with an onboard power or fuel source separate from the vehicle engine;

e. A potable water supply system that includes at least a sink, a faucet, a water tank with an exterior service supply connection;

f. A 110-125 volt electric power supply;

(c) The three basic types of motor homes are specified as follows:

a. Type A: a raw chassis upon which is built a driver's compartment and an entire body which provides temporary living quarters as defined above;

b. Type B: a completed van-type vehicle which has been altered to provide temporary living quarters as defined above;

c. Type C: an incomplete vehicle, upon which is permanently attached a body designed to provide temporary living quarters as defined above;

(12) "Proprietary part", any part manufactured by or for and sold exclusively by the manufacturer;

(13) "Recreation vehicle", a vehicle primarily designed as temporary living quarters for recreational, camping, travel or seasonal use that either has its own motive power or is mounted on, or towed by, another vehicle. The product types are: travel trailer, fifth-wheel trailer, camping trailer, truck camper and motor home;

(14) "Transient customer", customers who are temporarily traveling through a dealer's area of sales responsibility;

(15) "Travel trailer", a vehicle, mounted on wheels, designed to provide temporary living quarters for recreational, camping or travel use, of such size or weight as to not require a special highway movement permit when towed by a motorized vehicle, and of gross trailer area not to exceed three hundred twenty square feet (29.7m2);

(16) "Truck camper", a portable unit constructed to provide temporary living quarters for recreational, travel or camping use consisting of a roof, floor and sides designed to be loaded onto and unloaded from the bed of a pickup truck;

(17) "Warrantor", any person, firm, corporation or business entity that gives a warranty in connection with a new recreation vehicle or parts, accessories or components thereof. Such term does not include service contracts, mechanical or other insurance, or extended warranties sold for separate consideration by a dealer or other person not controlled by a manufacturer.

(L. 2001 H.B. 575)

Effective 8-01-02



Recreational vehicle manufacturers and dealers, written agreement required, when--sales of RVs, conditions.

407.1323. 1. All manufacturers and dealers doing business in this state must have a written agreement signed by both parties. This law shall supercede any conflicting statutes in states where enacted.

2. The manufacturer shall designate in writing subject to annual review the area of sales responsibility exclusively assigned to an RV dealer and shall not establish another RV dealer for the same line-make in the same area during the duration of the agreement unless the manufacturer can show good cause for the addition of the new RV dealer including reasonable evidence that the market will support the establishment of a new dealership.

3. Sales of RVs by manufacturers or distributors shall be in accordance with published prices, charges and terms of sale in effect at any given time. The manufacturer will sell products on the same basis, with respect to all rebates, discounts and programs, to all competing dealers similarly situated.

4. No manufacturer, directly or through any officer, agent or employee, may terminate an RV dealer agreement without good cause. The burden of showing good cause is on the manufacturer. Prior to the expiration of a dealer agreement, both parties shall enter into negotiations for renewal of the dealer agreement in good faith, and neither will arbitrarily require a substantial change in competitive circumstances. When taking on a competing manufacturer's lines, a dealer must notify existing manufacturers in writing, at least thirty days prior to entering into such an agreement, to sell the same type of recreational vehicle.

(L. 2001 H.B. 575)

Effective 8-01-02



Termination notice, requirements, contents.

407.1326. 1. Except as provided in this section, a manufacturer shall provide an RV dealer at least one hundred twenty days prior written notice of termination. The notice shall state all the reasons for termination and shall further state that if, within thirty days following receipt of the manufacturer's notice, the RV dealer provides to the manufacturer a written notice of intent to cure all claimed deficiencies, the RV dealer will then have one hundred twenty days from the date of the manufacturer's notice to rectify such deficiencies. If the deficiency is rectified within one hundred twenty days, the manufacturer's notice shall be void. However, if the RV dealer fails to provide the notice of intent to cure deficiencies in the proscribed time period, the termination shall take effect thirty days after the RV dealer's receipt of the manufacturer's notice unless the dealer has new and untitled inventory on hand in which case, if requested by the dealer, it will take effect upon the sale of the remaining inventory but in no event later than one hundred twenty days from the manufacturer's notice of termination.

2. The one hundred twenty day-notice may be reduced to thirty days' notice if the grounds for termination are* due to:

(1) Conviction of or pleas of nolo contendere to a felony of an RV dealer, or one of its owners;

(2) The business operations of the RV dealer have been abandoned or closed for ten consecutive business days unless the closing is due to an act of God, strike or labor difficulty, or other cause over which the dealer has no control;

(3) A material misrepresentation by the RV dealer; or

(4) The suspension, revocation, or refusal to renew the RV dealer's license.

3. The notice provisions of this section shall not apply if the reason for termination is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy.

4. A dealer may terminate its dealer agreement at any time by giving written notice of such intention to the** manufacturer at least thirty days prior to the effective date specified for termination.

(L. 2001 H.B. 575)

Effective 8-01-02

*Word "is" appears in original rolls.

**Word "the" does not appear in original rolls.



Repurchase upon termination of agreement.

407.1329. If the RV dealer agreement is terminated, cancelled or not renewed by the manufacturer for cause, the manufacturer shall, at the election of the RV dealer, within thirty days of termination, repurchase:

(1) (a) All new, untitled current model year recreation vehicle inventory, acquired from the manufacturer, which has not been used (except for demonstration purposes), altered or damaged to the extent that such damage must be disclosed to the consumer pursuant to section 407.1343, at one hundred percent of the net invoice cost, including transportation, less applicable rebates and discounts to the dealer; and

(b) All new, untitled recreation vehicle inventory of the prior model year, acquired from the manufacturer, provided the prior model year vehicles have not been altered, used (except for demonstration purposes) or damaged to the extent that such damage must be disclosed to the consumer pursuant to section 407.1343, and were drafted on the dealer's financing source or paid within one hundred twenty days prior to the effective date of the termination, cancellation, or nonrenewal.

In the event any of the vehicles repurchased pursuant to this subdivision are damaged, but do not trigger the consumer disclosure requirement, the amount due the dealer shall be reduced by the cost to repair the vehicle. Damage prior to delivery to dealer that is disclosed at the time of delivery will not disqualify repurchase under this provision;

(2) All current and undamaged manufacturer's accessories and proprietary parts sold to the dealer for resale, if accompanied by the original invoice, at one hundred five percent of the original net price paid to the manufacturer to compensate the dealer for handling, packing, and shipping the parts; and

(3) Any fully and correctly functioning diagnostic equipment, special tools, current signage and other equipment and machinery, at one hundred percent of the dealer's net cost plus freight, destination, delivery and distribution charges and sales taxes, if any, provided it was purchased by the dealer within five years before termination and upon the manufacturer's request and can no longer be used in the normal course of the dealer's ongoing business. The* manufacturer shall pay the* dealer within thirty days of receipt of the returned items.

(L. 2001 H.B. 575)

Effective 8-01-02

*Word "the" does not appear in original rolls.



Change in ownership, notice--rejection of change, notice.

407.1332. 1. If a recreation vehicle dealer desires to make a change in its ownership by the sale of the business assets, stock transfer, or otherwise, the recreation vehicle dealer must give the manufacturer thirty days' written notice prior to the closing including all supporting documentation as may be required by the manufacturer. The manufacturer shall not refuse to agree to such proposed change or sale and may not disapprove or withhold approval of such change or sale unless the manufacturer can show that its decision is based on manufacturer's reasonable criteria, which may include the prospective transferee's business experience, moral character, financial qualifications and any criminal record.

2. If the manufacturer rejects a proposed change or sale, the manufacturer shall give written notice of its reasons to the recreation vehicle dealer within thirty days after receipt of the dealer notification and complete documentation. If no such notice is given to the recreation vehicle dealer, the change or sale shall be deemed approved.

3. The manufacturer shall have the burden in showing that its rejection of the transfer or sale is reasonable.

(L. 2001 H.B. 575)

Effective 8-01-02



Succession in dealerships, conditions, restrictions and prohibitions.

407.1335. It is unlawful for any manufacturer to fail to provide a dealer an opportunity to designate, in writing, a member of the dealer's family as a successor to the dealership in the event of the death, incapacity, or retirement of the dealer. It shall be unlawful to prevent or refuse to honor the succession to a dealership by a member of the family of the deceased, retired or incapacitated dealer unless the manufacturer has provided to the dealer written notice of its objections. Grounds for objection shall be lack of creditworthiness, conviction of a felony, lack of required licenses or business experience or other conditions which make such succession unreasonable under the circumstances, but the manufacturer shall bear the burden of showing the unreasonableness of such succession. However, no member of the family may succeed to an RV dealership if the succession to the RV dealership involves, without the manufacturer's consent, a relocation of the business or an alteration of the terms and conditions of the written agreement.

(L. 2001 H.B. 575)

Effective 8-01-02



Warranty service, warrantor to provide written obligations--compensation of dealer for warranty service, submission of warranty claims, procedure.

407.1338. 1. Each warrantor shall specify in writing to each of its RV dealers, obligations, if any, for preparation, delivery and warranty service on its products; shall compensate the dealer for warranty service required of the dealer by the warrantor; and shall provide the dealer the schedule of compensation to be paid; and the time allowances for the performance of such work and service. In no event shall such schedule of compensation fail to include reasonable compensation for diagnostic work as well as warranty labor.

2. Time allowances for the diagnosis and performance of warranty labor shall be reasonable for the work to be performed. In the determination of what constitutes reasonable compensation under this section, the principal factors to be given consideration shall be the actual wage rates being paid by the dealer, and the actual retail labor rate being charged by the dealers in the community in which the dealer is doing business. In no event shall such compensation of a dealer for warranty labor be less than the lowest retail labor rates actually charged by the dealer for like nonwarranty labor as long as such rates are reasonable.

3. The warrantor shall reimburse the* dealer for warranty parts at actual wholesale cost, plus a minimum thirty-percent handling charge and the cost, if any, of freight to return warranty parts to the warrantor.

4. Warranty audits of dealer records may be conducted by the warrantor on a reasonable basis, and dealer claims for warranty compensation shall not be denied except for cause, such as performance of nonwarranty repairs, material noncompliance with warrantors' published policies and procedures, lack of material documentation, fraud, or misrepresentation.

5. The* dealer must submit warranty claims within thirty days of completing work.

6. The* dealer must notify the warrantor verbally or in writing if the RV dealer is unable to perform material or repetitive warranty repairs as soon as reasonably possible.

7. The* warrantor must disapprove warranty claims in writing within thirty days of the date of submission by the dealer in the manner and form prescribed by the warrantor. Claims not specifically disapproved in writing within thirty days shall be construed to be approved and shall be paid within forty-five days.

8. It is a violation of this chapter for any warrantor to:

(1) Fail to perform any of its warranty obligations with respect to its warranted product;

(2) Fail to include in written notices of factory campaigns to vehicle owners and dealers the expected date by which necessary parts and equipment, including tires and chassis or chassis parts, will be available to dealers to perform the campaign work. The manufacturer may ship parts in quantity to the dealer to effect such campaign work, and if such parts are in excess of the dealer's requirements, the dealer may return unused parts to the manufacturer for credit after completion of the campaign;

(3) Fail to compensate any of its RV dealers for authorized repairs effected by such dealer of merchandise damaged in manufacture or transit to the dealer, if the carrier is designated by the manufacturer, factory branch, distributor or distributor branch;

(4) Fail to compensate its RV dealers for authorized warranty service in accordance with the schedule of compensation provided the dealer pursuant to** this section, if performed in a timely and competent manner;

(5) Intentionally misrepresent in any way to purchasers of RVs that warranties with respect to the manufacture, performance or design of the vehicle are made by the dealer either as warrantor or cowarrantor; or

(6) Require the dealer to make warranties to customers in any manner related to the manufacture of the RV.

9. It is a violation of this chapter for any RV dealer to:

(1) Fail to perform "predelivery inspection" (PDI) functions, if required, in a competent and timely manner;

(2) Fail to perform warranty service work, authorized by the warrantor, in a reasonably timely and competent manner on any transient customer's vehicle whether sold by that dealer or not;

(3) Misrepresent the terms of any warranty.

(L. 2001 H.B. 575)

Effective 8-01-02

*Word "the" does not appear in original rolls.

**Word "to" does not appear in original rolls.



Violation of dealer agreement.

407.1340. Notwithstanding the terms of any RV manufacturer/dealer agreement, it shall be a violation of this chapter for:

(1) Any warrantor to fail to indemnify and hold harmless its dealer against any losses or damages, to the extent such losses or damages are caused by the negligence or willful misconduct of the warrantor. The dealer shall provide to the warrantor a copy of pending suits in which allegations are made that come within this subsection within ten days of receiving such suit;

(2) Any dealer to fail to indemnify and hold harmless its warrantor against any losses or damages, to the extent such losses or damages are caused by the negligence or willful misconduct of the dealer. The warrantor shall provide to the dealer a copy of pending suits in which allegations are made that come within this subsection within ten days of receiving such suit.

(L. 2001 H.B. 575)

Effective 8-01-02



Damage to new RVs, written disclosure to dealer required, when--reversion of ownership to manufacturer or distributor, when.

407.1343. 1. On any new RV, any uncorrected, significant damage or any corrected damage exceeding five hundred dollars or ten percent of the dealer's invoice, whichever is greater, must be disclosed to the dealer in writing prior to delivery. The dealer is responsible for disclosing such damage to the consumer in writing and must obtain a written acknowledgment of such damage from the consumer. A copy of the consumer's acknowledgment must be provided to the manufacturer. Factory or dealer repairs to glass, tires, wheels, bumpers, audio/video equipment, in-dash components, instrument panels, decorating items, appliances, furniture and components are excluded from disclosure when properly replaced by substantially similar manufacturer's or distributor's original equipment, materials or parts.

2. Whenever a new RV is damaged prior to transit to the dealer, or is damaged in transit to the dealer when the carrier or means of transportation has been determined by the manufacturer, or distributor, the dealer shall:

(1) Notify the manufacturer or distributor of such damage by the next business day after the date of delivery of such new RVs to the new RV dealership or within such additional time as specified in the RV manufacturer/dealer agreement; and

(2) Either:

(a) Request from the manufacturer or distributor authorization to replace the components, parts and accessories damaged or otherwise correct the damage; or

(b) Reject the vehicle by the next business day after delivery.

3. If the manufacturer or distributor refuses or fails to authorize repair of such damage within ten days after receipt of notification, or if the dealer rejects the RV because of damage, ownership of the new RV shall revert to the manufacturer or distributor. The* dealer will exercise due care in custody, but the RV dealer shall have no other obligations, financial or otherwise, with respect to such RV.

(L. 2001 H.B. 575)

Effective 8-01-02

*Word "The" does not appear in original rolls.



New RV dealership, restrictions on operation or ownership by a manufacturer.

407.1346. 1. A manufacturer shall be prohibited from owning or operating a new RV dealership in this state. It is not a violation of this section for a manufacturer to own or operate a new RV dealership:

(1) For a temporary period of not more than sixty months if the dealership is for sale at a reasonable price and on reasonable terms and conditions to an independent qualified buyer; or

(2) In a bona fide relationship with an independent person who:

(a) Is required to make a significant investment in the new RV dealership subject to loss; and

(b) Operates the dealership and can reasonably expect to acquire full ownership of the dealership within a reasonable time and under reasonable terms and conditions; or

(3) If the manufacturer has no other dealers of the same line-make in this state.

2. Nothing in this section shall be deemed to prohibit a manufacturer from owning a minority interest in an entity that owns RV dealerships of the same line-make manufactured and sold through dealers in this state by the manufacturer, provided that all of the following conditions are met at the time of acquisition and continue to be met during the time the entity maintains ownership:

(1) The interest owned by the manufacturer in said entity shall not exceed forty-five percent of the total ownership;

(2) All the manufacturer's dealer agreements confer rights on the dealer of the line-make to develop and operate, within a defined geographic territory or area, in as many dealership facilities as the dealer and manufacturer shall agree are appropriate.

3. Subsections 1 and 2 of this section shall not apply to manufacturers that own or operate an RV dealership in this state as of August 28, 2001.

(L. 2001 H.B. 575)

Effective 8-01-02



Social Security numbers, prohibited actions involving.

407.1355. 1. Except as provided in this section a person or entity, not including a state or local agency, shall not do any of the following:

(1) Publicly post or publicly display in any manner an individual's Social Security number. "Publicly post" or "publicly display" is defined in this section to intentionally communicate or otherwise make available to the general public or to an individual's co-workers;

(2) Require an individual to transmit his or her Social Security number over the internet, unless the connection is secure or the Social Security number is encrypted;

(3) Require an individual to use his or her Social Security number to access an internet website, unless a password, unique personal identification number, or other authentication device is also required to access the internet website;

(4) Require an individual to use his or her Social Security number as an employee number for any type of employment-related activity;

(5) Require an individual to use the last four digits of his or her Social Security number as an employee number for any type of employment-related activity.

2. The provisions of subdivision (5) of subsection 1 of this section shall only apply to such use after December 31, 2015.

3. This section does not prevent the collection, use, or release of a Social Security number as required by state or federal law or the use of a Social Security number for internal verification or administrative purposes.

4. This section does not apply to documents that are recorded or required to be open to the public pursuant to chapter 610. This section does not apply to records that are required by statute, case law, or Missouri court rules to be made available to the public.

5. If a federal law takes effect requiring the United States Department of Health and Human Services to establish a national unique patient health identifier program, any person or entity that complies with the federal law shall be deemed in compliance with this section.

(L. 2003 S.B. 61, A.L. 2005 H.B. 353, A.L. 2012 H.B. 1318)



Definitions.

407.1360. As used in sections 407.1360 to 407.1370, the following terms shall mean:

(1) "Boat dealer", any natural person, partnership, or corporation who, for a commission or with an intent to make a profit or gain of money or other thing of value, sells, barters, exchanges, leases or rents with the option to purchase, offers, attempts to sell, or negotiates the sale of any vessel or vessel trailer, whether the vessel or vessel trailer is owned by such person;

(2) "Boat manufacturer", any person engaged in the manufacture, assembling, or modification of any vessels or vessel trailers as a regular business, including a person, partnership, or corporation which acts for and is under the control of a manufacturer or assembly in connection with the distribution of vessels or vessel trailers, except for any person so engaged in the manufacture, assembly, or modification of any vessel or vessel trailer which is headquartered in this state and not a wholly owned subsidiary of a person not headquartered in this state;

(3) "Dealer", a person who is a grantee of a dealership situated in this state;

(4) "Dealer agreement", a contract or agreement, either expressed or implied, whether oral or written, between two or more persons, by which a person is granted the right to sell or distribute goods or services or use a trade name, trademark, service mark, logotype, advertising, or other commercial symbol in which there is a community of interest in the business of offering, selling, or distributing goods or services at wholesale, retail, by lease agreement or otherwise;

(5) "Designated family member", the designated successor nominated by a boat dealer in a written document filed by the dealer with a manufacturer;

(6) "Good cause", for purposes of determining whether there is good cause for a proposed action, factors may include but not be limited to:

(a) The extent of the affected dealer's penetration in the relevant market area;

(b) The nature and extent of the dealer's investment in its business;

(c) The adequacy of the dealer's service facilities, equipment, parts, supplies, and personnel;

(d) The extent and quality of the dealer's service;

(e) The dealer's performance under the terms of its dealer agreement with the manufacturer;

(f) The dealer's compliance with the contractual requirements under the terms of the dealer agreement; or

(g) The factors as provided in section 407.1362;

(7) "Grantor", a person who grants a dealership;

(8) "Marine dealer", any natural person, partnership, or corporation who, for a commission or with an intent to make a profit or gain of money or other thing of value, sells, barters, exchanges, leases or rents with the option to purchase, offers, attempts to sell, or negotiates the sale of any vessel or vessel trailer, whether the vessel or vessel trailer is owned by such person;

(9) "Marine manufacturer", a person who is a grantee of a dealership situated in this state, except for any person so engaged in the manufacture, assembly, or modification of any vessel or vessel trailer which is headquartered in this state and not a wholly owned subsidiary of a person not headquartered in this state;

(10) "Person", a natural person, partnership, joint venture, corporation, or other entity;

(11) "Personal watercraft", a class of vessel, which is less than sixteen feet in length, propelled by machinery which is designed to be operated by a person sitting, standing or kneeling on the vessel, rather than being operated by a person sitting or standing inside the vessel;

(12) "Vessel", every motorboat and every description of motorized watercraft, and any watercraft more than twelve feet in length which is powered by sail alone or by a combination of sail and machinery, used or capable of being used as a means of transportation on water, but not any watercraft having as the only means of propulsion a paddle or oars.

(L. 2004 H.B. 1288)



Dealership agreements, good cause needed to terminate or cancel.

407.1362. No boat, marine, vessel, or personal watercraft manufacturer, directly or through any officer, agent or employee, may terminate, cancel or fail to renew a dealership agreement of a boat, marine, or vessel dealership without good cause. In addition, good cause shall exist whenever:

(1) The boat, marine, vessel, or personal watercraft dealer has transferred an interest in the dealership without the manufacturer's written consent;

(2) The boat, marine, vessel, or personal watercraft dealer has filed a voluntary petition in bankruptcy or has had an involuntary petition in bankruptcy filed against it which has not been discharged within thirty days after the filing;

(3) There has been a closeout or sale of a substantial part of the dealer's assets related to the boat, marine, vessel, or personal watercraft dealership or there has been a commencement or dissolution or liquidation of the dealership;

(4) There has been a change without the prior written approval of the manufacturer in the location of the dealer's principal place of business under the dealership agreement;

(5) The boat, marine, vessel, or personal watercraft dealer has defaulted under any chattel mortgage or other security agreement between the dealer and the boat, marine, vessel, or personal watercraft manufacturer or there has been a revocation or discontinuance of any guarantee of the dealer's present or future obligations to the boat, marine, or vessel;

(6) The boat, marine, vessel, or personal watercraft dealer has failed to operate in the normal course of business for thirty consecutive days or has otherwise abandoned his or her business, unless otherwise provided for in the dealer agreement;

(7) The boat, marine, vessel, or personal watercraft dealer has pleaded guilty to or has been convicted of a felony, or of any misdemeanor relating to the relationship between the dealer and manufacturer;

(8) The dealer has engaged in conduct which is injurious or detrimental to the dealer's customers or to the public welfare.

(L. 2004 H.B. 1288)



Notice of termination or cancellation, contents.

407.1364. 1. Except as provided in this section, a boat, marine, vessel, or personal watercraft manufacturer shall provide a boat, marine, vessel, or personal watercraft dealer at least ninety days' prior written notice of termination, cancellation, or nonrenewal of the dealership agreement. The notice shall state all the reasons for termination, cancellation, or nonrenewal of the dealership agreement and shall provide the said dealer the aforesaid ninety days in which to cure any claimed deficiency. If the deficiency is rectified within the aforesaid ninety days, the manufacturer's notice shall be void. However, if the dealer fails to provide the notice of intent to cure deficiencies in the prescribed time period, the termination shall take effect sixty days after the dealer's receipt of the manufacturer's notice unless the dealer has new and untitled inventory on hand, in which case, if requested by the dealer, it will take effect upon the sale of the remaining inventory but in no event later than ninety days from the manufacturer's notice of termination.

2. The notice and right to cure provisions in this section shall not apply if the reason for termination, cancellation, or nonrenewal is for good cause as defined in section 407.1360.

3. A dealer may terminate its dealer agreement at any time by giving written notice of said intentions to the manufacturer at least ninety days prior to the effective date specified for termination.

4. The ninety-day notice may be reduced to sixty days' notice if the grounds for termination are due to:

(1) Conviction of or pleas of nolo contendere to a felony of a dealer, or one of its owners;

(2) The business operations of the dealer have been abandoned or closed for thirty consecutive days unless the closing is due to an act of God or other cause over which the dealer has no control;

(3) A material misrepresentation by the dealer; or

(4) The suspension, revocation, or refusal to renew the dealer's license.

5. The provisions of this section regarding notice shall not apply if the reason for termination is insolvency, the occurrence of an assignment for the benefit of creditors, or bankruptcy.

(L. 2004 H.B. 1288)



Change in ownership, notice required.

407.1366. 1. If a boat, marine, vessel, or personal watercraft dealer desires to make a change in its ownership by the sale of the business assets, stock transfer, or otherwise, the dealer must give the manufacturer ninety days' written notice prior to the closing including all supporting documentation as may be required by the manufacturer. The manufacturer shall not refuse to agree to such proposed change or sale and may not disapprove or withhold approval of such change or sale unless the manufacturer can show that its decision is based on the manufacturer's reasonable criteria, which may include but is not limited to the prospective transferee's business experience, moral character, financial qualifications, and any criminal record.

2. It is unlawful for any manufacturer to fail to provide a boat, marine, vessel, or personal watercraft dealer an opportunity to designate, in writing, a member of the dealer's family as a successor to the dealership in the event of the death, incapacity, or retirement of the boat, marine, vessel, or personal watercraft dealer. It shall be unlawful to prevent or refuse to honor the succession to a dealership by a member of the family of the deceased, retired or incapacitated dealer unless the manufacturer has provided to the dealer written notice of its objections. Grounds for objection shall be lack of creditworthiness, conviction of a felony, lack of required licenses or business experience or other conditions which make such succession unreasonable under the circumstances, but the manufacturer shall bear the burden of showing the unreasonableness of such succession. However, no member of the family may succeed to a boat, marine, vessel, or personal watercraft dealer if the succession to the boat, marine, vessel, or personal watercraft dealer involves, without the manufacturer's consent, a relocation of the business or an alteration of the terms and conditions of the written agreement.

3. If the manufacturer rejects a proposed change or sale, the manufacturer shall give written notice of its reasons to the boat, marine, vessel, or personal watercraft dealer within sixty days after receipt of the dealer notification and complete documentation. If no such notice is given to the boat, marine, vessel, or personal watercraft dealer, the change or sale shall be deemed approved.

(L. 2004 H.B. 1288)



Repurchase required, when.

407.1368. If the boat, marine, vessel, or personal watercraft dealer agreement is terminated, cancelled or not renewed by the manufacturer for cause, the manufacturer shall, at the election of the boat, marine, vessel, or personal watercraft dealer, within thirty days of termination, repurchase:

(1) (a) All new, untitled current model year inventory, acquired from the manufacturer, which has not been used (except for demonstration purposes), altered or damaged to the extent that such damage must be disclosed to the consumer pursuant to section 407.1343, at one hundred percent of the net invoice cost, less transportation, applicable rebates, and discounts to the dealer;

(b) All new, untitled inventory of the prior model year, acquired from the manufacturer, provided the prior model year vessels have not been altered, used (except for demonstration purposes) or damaged to the extent that such damage must be disclosed to the consumer pursuant to section 407.1343, and were drafted on the dealer's financing source or paid within one hundred twenty days prior to the effective date of the termination, cancellation, or nonrenewal;

(c) Any other existing inventory provided the boat, marine, vessel, or personal watercraft dealer and the manufacturer have agreed on a wholesale value for such inventory.

In the event any of the vessels repurchased pursuant to this subdivision are damaged, but do not trigger the consumer disclosure requirement, the amount due the dealer shall be reduced by the cost to repair the vessels. Damage prior to delivery to dealer that is disclosed at the time of delivery will not disqualify repurchase under this provision;

(2) All current and undamaged manufacturer's accessories and proprietary parts sold to the dealer for resale, if accompanied by the original invoice, at one hundred percent of the original net price paid to the manufacturer minus a ten percent freight and restocking expense *.

(L. 2004 H.B. 1288)

*Words "; and" appear in original rolls.



Applicability.

407.1370. The provisions of sections 407.1360 to 407.1370 shall apply to all dealership agreements entered into or renewed on or after January 1, 2005.

(L. 2004 H.B. 1288)



Definitions.

407.1380. As used in sections 407.1380 to 407.1384, the following terms shall mean:

(1) "Account review", activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements;

(2) "Consumer", any individual;

(3) "Consumer credit reporting agency", any entity that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer credit reports to third parties. The term "consumer credit reporting agency" shall not include an entity that acts only as a reseller of credit information by assembling and merging information contained in the database of another consumer credit reporting agency and who does not maintain a permanent database of credit information from which consumer reports are produced and who does not furnish consumer reports to third parties;

(4) "Credit report", any written or electronic communication of any information by a consumer credit reporting agency that in any way bears upon a person's credit worthiness, credit capacity, or credit standing;

(5) "Security freeze", a notice placed in a consumer's credit report, at the request of the consumer and subject to certain exceptions, that prohibits the consumer credit reporting agency from releasing the consumer's credit report or score relating to the extension of credit without the express authorization of the consumer.

(L. 2008 H.B. 1384 and H.B. 2157)



Security freeze may be requested, when--fee--agency duties--furnishing a credit report after freeze prohibited, exceptions--lifting of freeze, when--permanent removal, when--fee--notice.

407.1382. 1. A consumer may request that a consumer credit reporting agency place a security freeze on that consumer's credit report, if that request is made:

(1) In writing, where delivery by standard U.S. Postal Service mail service shall be sufficient; or

(2) By other reliable means, including, but not limited to, internet, telephone, facsimile, or other electronic means if any such other means are provided by the consumer credit reporting agency; and

(3) Proper identification is presented to adequately identify the requestor as the consumer subject to the credit report.

2. A consumer credit reporting agency shall honor a consumer's request for a security freeze within five business days of receipt of such request. A consumer credit reporting agency may assess a fee of up to five dollars for the first request by a consumer to place a security freeze, and up to ten dollars for any subsequent request to place a security freeze made by the same consumer, except that at no time shall a fee be assessed for a request to place a security freeze if the request is accompanied by an incident report as defined under section 570.222.

3. A consumer credit reporting agency shall, within ten business days of placing a security freeze on the consumer's credit report, send the consumer:

(1) Written confirmation of compliance with the consumer's request;

(2) Instructions explaining the process of placing, temporarily lifting, or permanently removing a security freeze and the process for allowing access to information from the consumer's credit report for a specific requestor or period of time;

(3) A unique personal identification number or password to be used by the consumer to temporarily lift or permanently remove the security freeze or designate a specific requestor for receipt of the credit report despite the security freeze.

4. A consumer credit reporting agency shall not furnish a credit report to any person if the consumer who is subject to the credit report has requested a security freeze be placed on that report unless the credit report:

(1) Is requested by the consumer who is subject to the report;

(2) Is furnished under a court order;

(3) Is furnished during a period in which the consumer has temporarily lifted the freeze;

(4) Is requested for the purposes of prescreening as provided by the Fair Credit Reporting Act under 15 U.S.C. 1681, et seq.;

(5) Is requested by a child support enforcement agency;

(6) Is requested for use in setting or adjusting a rate, underwriting, adjusting a claim, or servicing a policy for insurance purposes;

(7) Is requested by a specific person, or the subsidiary, affiliate, agent, or assignee of such person, whom the consumer has identified as eligible for receipt of the credit report under subsection 6 of this section, despite the consumer's request for a security freeze;

(8) Is furnished to a person, or the subsidiary, affiliate, agent, or assignee of such person, with whom the consumer has a debtor-creditor relationship for the purpose of account review or collecting the financial obligation owing for the account contract or debt;

(9) Is requested by the state or its agents or assigns for the purpose of investigating fraud or investigating or collecting delinquent taxes to the extent consistent with a permissible purpose under 15 U.S.C. 1681; or

(10) Is requested by a person or entity administering a credit file monitoring service or similar service to which the consumer has subscribed.

5. If a security freeze is in place, a consumer credit reporting agency shall not change any of the following official information in a consumer credit report without sending a written confirmation of the change to the consumer within thirty days of the change being posted to the consumer's file: name, date of birth, Social Security number, and address. Written confirmation is not required for technical modifications of a consumer's official information, including name and street abbreviations, complete spellings, or transposition of numbers or letters. In the case of an address change, the written confirmation shall be sent to both the new address and to the former address.

6. A consumer may request that the consumer credit reporting agency temporarily lift a security freeze for a specific requestor or period of time despite the consumer request for a security freeze under subsection 1 of this section, if that request is made:

(1) In writing, where delivery by standard U.S. Postal Service mail service shall be sufficient; or

(2) By other reliable means, including, but not limited to, internet, telephone, facsimile, or other electronic means if any such other means are provided by the consumer credit reporting agency; and

(3) Proper identification is presented to adequately identify the requestor as the consumer subject to the credit report, which shall include the unique personal identification number or password issued to the consumer under subsection 3 of this section; and

(4) The time period is specified for which the freeze shall be temporarily lifted.

7. (1) A consumer credit reporting agency shall temporarily lift a security freeze within fifteen minutes of receiving such a request from a consumer, if that request is received during normal business hours and is made in accordance with subdivisions (2), (3), and (4) of subsection 6 of this section. If such a lift request is received outside of normal business hours, the consumer credit reporting agency shall lift the security freeze within fifteen minutes of the start of the next normal business day.

(2) A consumer credit reporting agency shall temporarily lift a security freeze within three days of receiving such a request from a consumer, if that request is made in accordance with subdivisions (1), (3), and (4) of subsection 6 of this section.

(3) The time frame in which a consumer credit reporting agency shall comply with a request to lift a security freeze under this subsection may be extended in the event of an act of God, an unauthorized or illegal act by a third party, operational interruption due to electrical failure or hardware or software failure, government action, or reasonable unexpected maintenance of the agency's systems, provided that the lifting of a security freeze shall occur within a reasonable time after resumption of normal business operations.

8. A consumer credit reporting agency shall permanently remove a security freeze within three days of receiving such a request from a consumer, if that request is made:

(1) In writing, where delivery by standard U.S. Postal Service mail service shall be sufficient; or

(2) By reliable means, including, but not limited to, internet, telephone, facsimile, or other electronic means if any such other means are provided by the consumer credit reporting agency; and

(3) Proper identification is presented to adequately identify the requestor as the consumer subject to the credit report, which shall include the unique personal identification number or password issued to the consumer under subsection 3 of this section.

9. A consumer credit reporting agency may assess a fee of up to five dollars to temporarily lift a security freeze, except that at no time shall a fee be assessed for a request to temporarily lift a security freeze that was placed in conjunction with an incident report under subsection 2 of this section. No fee shall be assessed for a request to permanently remove a security freeze.

10. At any time a consumer is required to receive a summary of rights under 15 U.S.C. Section 1681g(d), the following notice shall be included:

"Missouri Consumers Have the Right to Obtain a Security Freeze.

You have a right to place a "security freeze" on your credit report, which will prohibit a consumer credit reporting agency from releasing information in your credit report without your express authorization. A security freeze must be requested in writing by mail or via other approved methods. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, government services or payments, rental housing, employment, investment, license, cellular phone, utilities, digital signature, internet credit card transaction, or other services, including an extension of credit at point of sale. When you place a security freeze on your credit report, you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit report or authorize the release of your credit report for a period of time after the freeze is in place. To provide that authorization you must contact the consumer credit reporting agency and provide all of the following:

(1) The personal identification number or password;

(2) Proper identification to verify your identity;

(3) The proper information regarding the period of time for which the report shall be available.

A consumer credit reporting agency must authorize the release of your credit report no later than fifteen minutes after receiving the above information, under certain circumstances.

A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity, with which you have an existing account, that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

You have a right to bring civil action against anyone, including a consumer credit reporting agency, who improperly obtains access to a file, knowingly misuses file data, or fails to correct inaccurate file data.".

(L. 2008 H.B. 1384 and H.B. 2157)



Agency liability for failure to comply, damages and equitable relief.

407.1384. 1. Any consumer credit reporting agency that knowingly fails to comply with the provisions of sections 407.1380 to 407.1384 shall be liable to the consumer who is subject to the credit report in an amount equal to:

(1) Any actual damages sustained by the consumer due to such failure; and

(2) Any court costs and fees assessed in maintaining the action, as well as reasonable attorney's fees.

2. In addition to the foregoing monetary sums, a court, upon request of the damaged consumer, shall award such equitable relief as may be necessary to restore the damaged consumer's credit and to discourage future violations of sections 407.1380 to 407.1384 by the consumer credit reporting agency.

(L. 2008 H.B. 1384 and H.B. 2157)



Processing of applications for credit--effect of security freeze.

407.1385. It shall not be considered a violation of any law that requires an application for credit to be processed within a specified time frame if a creditor is unable to meet this time frame because of inability to access a credit report due to a security freeze.

(L. 2008 H.B. 1384 and H.B. 2157)



Definitions--notice to consumer for breach of security, procedure--attorney general may bring action for damages.

407.1500. 1. As used in this section, the following terms mean:

(1) "Breach of security" or "breach", unauthorized access to and unauthorized acquisition of personal information maintained in computerized form by a person that compromises the security, confidentiality, or integrity of the personal information. Good faith acquisition of personal information by a person or that person's employee or agent for a legitimate purpose of that person is not a breach of security, provided that the personal information is not used in violation of applicable law or in a manner that harms or poses an actual threat to the security, confidentiality, or integrity of the personal information;

(2) "Consumer", an individual who is a resident of this state;

(3) "Consumer reporting agency", the same as defined by the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681a;

(4) "Encryption", the use of an algorithmic process to transform data into a form in which the data is rendered unreadable or unusable without the use of a confidential process or key;

(5) "Health insurance information", an individual's health insurance policy number or subscriber identification number, any unique identifier used by a health insurer to identify the individual;

(6) "Medical information", any information regarding an individual's medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional;

(7) "Owns or licenses" includes, but is not limited to, personal information that a business retains as part of the internal customer account of the business or for the purpose of using the information in transactions with the person to whom the information relates;

(8) "Person", any individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, governmental agency, governmental instrumentality, public corporation, or any other legal or commercial entity;

(9) "Personal information", an individual's first name or first initial and last name in combination with any one or more of the following data elements that relate to the individual if any of the data elements are not encrypted, redacted, or otherwise altered by any method or technology in such a manner that the name or data elements are unreadable or unusable:

(a) Social Security number;

(b) Driver's license number or other unique identification number created or collected by a government body;

(c) Financial account number, credit card number, or debit card number in combination with any required security code, access code, or password that would permit access to an individual's financial account;

(d) Unique electronic identifier or routing code, in combination with any required security code, access code, or password that would permit access to an individual's financial account;

(e) Medical information; or

(f) Health insurance information.

"Personal information" does not include information that is lawfully obtained from publicly available sources, or from federal, state, or local government records lawfully made available to the general public;

(10) "Redacted", altered or truncated such that no more than five digits of a social security number or the last four digits of a driver's license number, state identification card number, or account number is accessible as part of the personal information.

2. (1) Any person that owns or licenses personal information of residents of Missouri or any person that conducts business in Missouri that owns or licenses personal information in any form of a resident of Missouri shall provide notice to the affected consumer that there has been a breach of security following discovery or notification of the breach. The disclosure notification shall be:

(a) Made without unreasonable delay;

(b) Consistent with the legitimate needs of law enforcement, as provided in this section; and

(c) Consistent with any measures necessary to determine sufficient contact information and to determine the scope of the breach and restore the reasonable integrity, security, and confidentiality of the data system.

(2) Any person that maintains or possesses records or data containing personal information of residents of Missouri that the person does not own or license, or any person that conducts business in Missouri that maintains or possesses records or data containing personal information of a resident of Missouri that the person does not own or license, shall notify the owner or licensee of the information of any breach of security immediately following discovery of the breach, consistent with the legitimate needs of law enforcement as provided in this section.

(3) The notice required by this section may be delayed if a law enforcement agency informs the person that notification may impede a criminal investigation or jeopardize national or homeland security, provided that such request by law enforcement is made in writing or the person documents such request contemporaneously in writing, including the name of the law enforcement officer making the request and the officer's law enforcement agency engaged in the investigation. The notice required by this section shall be provided without unreasonable delay after the law enforcement agency communicates to the person its determination that notice will no longer impede the investigation or jeopardize national or homeland security.

(4) The notice shall at minimum include a description of the following:

(a) The incident in general terms;

(b) The type of personal information that was obtained as a result of the breach of security;

(c) A telephone number that the affected consumer may call for further information and assistance, if one exists;

(d) Contact information for consumer reporting agencies;

(e) Advice that directs the affected consumer to remain vigilant by reviewing account statements and monitoring free credit reports.

(5) Notwithstanding subdivisions (1) and (2) of this subsection, notification is not required if, after an appropriate investigation by the person or after consultation with the relevant federal, state, or local agencies responsible for law enforcement, the person determines that a risk of identity theft or other fraud to any consumer is not reasonably likely to occur as a result of the breach. Such a determination shall be documented in writing and the documentation shall be maintained for five years.

(6) For purposes of this section, notice to affected consumers shall be provided by one of the following methods:

(a) Written notice;

(b) Electronic notice for those consumers for whom the person has a valid email address and who have agreed to receive communications electronically, if the notice provided is consistent with the provisions of 15 U.S.C. Section 7001 regarding electronic records and signatures for notices legally required to be in writing;

(c) Telephonic notice, if such contact is made directly with the affected consumers; or

(d) Substitute notice, if:

a. The person demonstrates that the cost of providing notice would exceed one hundred thousand dollars; or

b. The class of affected consumers to be notified exceeds one hundred fifty thousand; or

c. The person does not have sufficient contact information or consent to satisfy paragraphs (a), (b), or (c) of this subdivision, for only those affected consumers without sufficient contact information or consent; or

d. The person is unable to identify particular affected consumers, for only those unidentifiable consumers.

(7) Substitute notice under paragraph (d) of subdivision (6) of this subsection shall consist of all the following:

(a) Email notice when the person has an electronic mail address for the affected consumer;

(b) Conspicuous posting of the notice or a link to the notice on the internet website of the person if the person maintains an internet website; and

(c) Notification to major statewide media.

(8) In the event a person provides notice to more than one thousand consumers at one time pursuant to this section, the person shall notify, without unreasonable delay, the attorney general's office and all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis, as defined in 15 U.S.C. Section 1681a(p), of the timing, distribution, and content of the notice.

3. (1) A person that maintains its own notice procedures as part of an information security policy for the treatment of personal information, and whose procedures are otherwise consistent with the timing requirements of this section, is deemed to be in compliance with the notice requirements of this section if the person notifies affected consumers in accordance with its policies in the event of a breach of security of the system.

(2) A person that is regulated by state or federal law and that maintains procedures for a breach of the security of the system pursuant to the laws, rules, regulations, guidances, or guidelines established by its primary or functional state or federal regulator is deemed to be in compliance with this section if the person notifies affected consumers in accordance with the maintained procedures when a breach occurs.

(3) A financial institution that is:

(a) Subject to and in compliance with the Federal Interagency Guidance Response Programs for Unauthorized Access to Customer Information and Customer Notice, issued on March 29, 2005, by the board of governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision, and any revisions, additions, or substitutions relating to said interagency guidance; or

(b) Subject to and in compliance with the National Credit Union Administration regulations in 12 CFR Part 748; or

(c) Subject to and in compliance with the provisions of Title V of the Gramm-Leach-Bliley Financial Modernization Act of 1999, 15 U.S.C. Sections 6801 to 6809;

shall be deemed to be in compliance with this section.

4. The attorney general shall have exclusive authority to bring an action to obtain actual damages for a willful and knowing violation of this section and may seek a civil penalty not to exceed one hundred fifty thousand dollars per breach of the security of the system or series of breaches of a similar nature that are discovered in a single investigation.

(L. 2009 H.B. 62)

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