MOONDANCE MUSIC
MEMORANDUM
Data: 31 March 2006
To: General Manager of Moondance Music
From: Bonnie Estes, Sales Officer
Subject: Legal Guidelines for Door-to-Door Solicitation in California
Purpose
The purpose of this memo is to provide information on the legal provisions of door-to-door solicitation in California to provide guidelines to the sales force on how to apply door-to-door solicitation without violating any laws that would subject the company to complaints and unnecessary lawsuits.
Summary
Sections 17500.3/17510-17510.95 of the Business and Professions Code defines door-to-door solicitations, and clarifies the disclosure requirements for solicitation. Door-to-door solicitations or sales refer to the activity of offering something with the expectation of receiving monetary compensation from people accepting the offer. To ensure customers of the good intentions of the door-to-door salesman these should be followed: 1) presentation of a solicitation card or brochure and identification, 2) containing the personal and contact details of the person doing the solicitation, 3) and the business and contact details of the business organization the salesman is representing, 4) which should be duly signed by an authorized officer of the organization, and 5) written in at least a 10 point font to readable.
Title 16, Part 1, Section 429.1 of the Code of Federal Regulations considers as unfair and deceptive: 1) failure to provide the customer with a complete copy of the sales contract at the time of transaction using a language similar to what was used during the oral sales presentation, containing the details of the transaction, signed by the buyer and printed in at least a 10-point font; and 2) failure to provide the buyer a copy of the buyer’s right to cancel the contract.
Section 1689.5 of the California Civil Code provides the buyer’s right to rescind or cancel the contract within three business days after the transaction.
Based on these legislations, salespeople should have an identification or solicitation card, a receipt or sales contract and document stating the buyer’s three-day cancellation right.
Discussion
Households are aware of the reported cases of fraudulent or deceptive door-to-door salespeople. As a public interest response, several laws have been put in place to protect customers from fraud and to encourage legitimate business organizations to follow the legal provisions and distinguish themselves from fraudulent and deceptive businesses or individuals.
Sections 17500.3/17510-17510.95 defines door-to-door solicitation as any activity comprising of an offer of a good or service from door-to-door or household-to-household in exchange for a price or compensation. Solicitation is similar to sales for profit to distinguish the activity from door-to-door sales for charitable purposes. Door-to-door solicitation may also refer to recruitment and other transactions provided it include a sales contract.
The same provisions also provide the requirements for door-to-door solicitation. Section 17500.3 provides that upon initial contact with customers, the salesperson should identify himself/herself verbally, show an identification card, and identify the purpose of the solicitation, the product or service being offered and the company manufacturing or providing the goods or services. Failure to do this may be a ground for the consumer’s claim for damages that may amount to as much as twice the sales price except only if the customer willingly signed a document that the salesperson complied with this requirement. This is a very important guideline for salespeople and if possible, an attestation clause may be included in the sales receipt or contract to protect the salespeople from unscrupulous customers. Section 17510-17510.95 provides for the requirement of presenting a solicitation card containing the information previously discussed and including other information that may be of interest to the customer to satisfy any questions of trustworthiness.
Title 16, Part 1, Section 429.1 of the Code of Federal Regulations provides the requirements of a sales contract in door-to-door sales and actions that constitute fraud or deception. The contract should be in the same language as the sales presentation; it should contain the description of the item bought, the price and quantity; the buyer should sign it; and the print should be a readable font or at least a 10-point font. This is important to both buyer and seller as a written proof of the sales transaction and as basis of the day when the three-day right to cancel commences. The contract or a separate document should also be given to the buyer that shows his/her legal right to cancel the contract within three days from the transaction to comply with consumer rights.
Section 1689.5 of the California Civil Code covers the rights of consumers to rescind, cancel or terminate the contract within three days after the transaction. However, salespeople should be aware that the three-day cancellation only applies to a transaction involving or more, the amount including interest, shipping and other charges provided the transaction occurs outside of the normal business place such as through door-to-door sales. The three-day cancellation right is also limited to goods and services procured for personal, household or family use. This period does not also include Sundays and holidays.
Conclusion/Recommendations
Compliance with the legal requirements of door-to-door sales is not only part of the obligation of Moondance Music but also essential to its marketing strategy because the effective implementation of the strategy involves the consideration of the rights of consumers. Customers are open to sales presentation when they are convinced of the trustworthiness of the salesperson and the credibility of the company employing the salesperson.
Moondance Music door-to-door salespeople should have sufficient knowledge of both legal requirements and marketing strategies in door-to-door sales. In compliance with legal requirements, salespeople should always have with them an identification or solicitation card, a receipt form, a sales contract form and a document stating the three-day cancellation rights of customers.
Credit:ivythesis.typepad.com
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