July 14, 1999 

Mr. Wayne Thor-burn 

Administrator 

Texas Real Estate Commission 

P.O. Box 12188 

Austin, Texas 7871 I-2188 

Opinion No. JC-0078 

Re: Whether chapter 37 of the Business and 

Commerce Code applies to unsolicited telephone 

calls by licensed residential service companies to 

consumers for the purpose of selling residential 

service contracts and related questions (RQ-1166) 

Dear Mr. Thorbum: 

You ask whether chapter 37 of the Business and Commerce Code, regulating telephone 

solicitations, applies to solicitations by residential service companies selling residential service 

contracts to consumers. You also ask whether chapter 39 of the Business and Commerce Code, 

relating to consumers’ rights to cancel certain consumer transactions, applies to such solicitations 

by real estate brokers and real estate salespersons licensed by the Texas Real Estate Commission (the 

“Commission”). We conclude that chapter 37 applies to unsolicited telephone calls made by a 

residential service company for the purpose of selling residential service contracts. However, an 

unsolicited telephone call to sell a new contract to a consumer who held or holds such a contract is 

excepted from that chapter’s requirements dealing with when and how consumer telephone calls 

must be made. We also conclude that chapter 39 applies to residential service contract solicitations 

by a licensed real estate broker or salesperson at a home being listed or shown to a prospective buyer 

if (1) the broker or salesperson is acting as the agent for the residential service company, and (2) the 

purchaser agrees to purchase the services at the home or a place other than the merchant’s place of 

business. However, such a transaction may be excepted from chapter 39 if the parties engaged in 

prior negotiations at a fixed business establishment. 

Residential service companies are licensed and regulated by the Commission under the 

Residential Service Company Act (the “Act”), TEX. REV. Crv. STAT. ANN. art. 6573b (Vernon Supp. 

1999). Under the Act, any person “who issues and performs, or arranges to perform, services 

pursuant to a residential service contract” is a residential service company. Id. 5 4(b). A “residential 

service contract” is a contract “whereby, for a fee, a person undertakes, for a specified period of time, 

to maintain, repair, or replace all or any part of the structural components, the appliances, or the 

electrical, plumbing, heating, cooling, or air-conditioning systems of a residential property.” Id. 

5 4(a). The residential service company agrees to provide the services contracted for when requested 

by the holder of the contract. Id. @ 15(a)(3)(B)(v), (vi). 
Mr. Wayne Thorburn - Page 2 (X-0078) 

You tell us that residential service contracts are generally offered by real estate brokers and 

salespersons to sellers or buyers in connection with the sale of a home, but they are also marketed 

by service companies directly to consumers by telephone and mail. We understand that the seller 

of the home typically purchases the contract, usually for a term of one year, for the benefit of the 

buyer and pays the fee from the proceeds of the sale. Thus, the initial contract is not sold by 

telephone or mail solicitation by the service company but by the real estate broker or salesperson 

involved in the sale of the home. After the initial period of coverage, however, the home buyer may 

“renew” the contract. The renewal or sale of a new contract, you tell us, is done by mail and 

telephone solicitation by the service companies. We understand your request is prompted by an 

increase in the direct sale of contracts by service companies to consumers who had previously 

purchased such contracts. 

Your first two questions relate to chapter 37 of the Business and Commerce Code. You first 

ask if chapter 37 of the Business and Commerce Code applies to an unsolicited telephone call made 

by an employee or agent of a licensed residential service company to a consumer for the purpose of 

selling a residential service contract. If chapter 37 applies, you next ask, “what are the rights of a 

consumer and the obligations of a licensed residential service company respecting notice, 

cancellation, and refund of the fee paid for the residential service contract?’ See Letter from 

Mr. Wayne Thorbum, Administrator, Texas Real Estate Commission, to Honorable Dan Morales, 

Attorney General (July 22,1998) (on tile with Opinion Committee) [hereinafter Request Letter of 

7/22/98]. Based on the information provided, we understand the solicitation that you first ask about 

is by the residential service company that had previously sold the residential service contract to the 

seller of a home for the benefit of the home buyer; the consumer being solicited is the home buyer 

and holder of the residential service contract. Additionally, we assume the rights and obligations 

of the soliciting residential service company and the consumer that you ask about in your second 

question are only those under chapter 37. Because the two questions require us to review chapter 

37 in its entirety, we address them together. 

Chapter 37 regulates telephone solicitations. The chapter applies to a person who makes an 

unsolicited telephone call to a residential telephone number to solicit the sale of consumer goods or 

services, extend credit for a consumer good or service, obtain information that will or may be used 

to directly solicit a sale of goods or services, or to extend credit for the sale. See TEX. BUS. & COM. 

CODE ANN. $5 37.01(4) (defining “consumer telephone call”), (5) (defining “telephone solicitor”) 

(Vernon Supp. 1999). Section 37.02(a) provides that the telephone solicitor may not make such a 

call unless the solicitor immediately identities himself or herself, the business on whose behalf the 

call is being made, and the purpose of the call, id. 4 37.02(a)(l); the call is made after 9:00 a.m. but 

before 9:00 p.m. on a weekday or Saturday and after 12:00 noon but before 9:00 p.m. on a Sunday; 

id. 5 37.02(a)(2); and, if an automated dial-announcing device is used, where possible, the call is 

disconnected thirty seconds after it is terminated by either the consumer or the telephone solicitor, 

id. 4 37.02(a)(3).’ 

‘House Bill 450, enacted by the 76th Legislature and effective September 1, 1999, requires such calls to be 

(continued...) 
Mr. Wayne Thorburn - Page 3 (X-0078) 

Certain telephone solicitations are exempted from the tbreerequirements ofsection 37.02(a). 

Under section 37.02(b), a consumer telephone call is not subject to those requirements if the call is 

made: 

(1) in response to the express request of the consumer; 

(2) primarily in connection with an existing debt or contract for 

which payment or performance has not been completed at the time of 

the call; or 

(3) to a consumer with whom the telephone solicitor has a prior 

or existing business relationship. 

Id. 5 37.02(b). 

Finally, section 37.03 prohibits a telephone solicitor from charging to consumer credit card 

accounts unless one of the following requirements are met: the seller (1) provides for cancellation 

of services upon notice from the consumer not later than the seventh day after the date the consumer 

“receives the goods or services” and a full refund not later than the thirtieth day after the consumer 

cancels the contract for services not performed or a pro rata refund for any services not yet 

performed; (2) provides to and receives from the consumer a written contract describing the services, 

the total price, the name, address, and business phone of the company and any terms or conditions 

affecting the sale; or (3) the seller is exempt horn federal taxes under section 501(c)(3) of the 

Internal Revenue Code. Id. $37.03 (Vernon Supp. 1999). 

Although chapter 37 has been in effect since 1992; we have found no Texas cases construing 

its provisions. However, based on the plain language of the statute, we conclude in answer to your 

first question that chapter 37 applies to unsolicited telephone calls by a residential service company 

for the purpose of selling a new contract. See id. 5s 37.01(4) (defining “consumer telephone call”), 

(5) (defining “telephone solicitor”); TEX. REV. CIV. STAT. ANN. art. 6573b, § 4(a) (Vernon Supp. 

1999) (definition of “residential service contract”). But the section 37.02(a) provisions dealing with 

when and how the calls must be made do not apply to such calls to a consumer who held or holds 

a residential service contract issued by that company. Section 37.02(b)(3) specifically provides that 

subsection (a) does not apply to a consumer telephone call if made “to a consumer with whom the 

telephone solicitor has aprior or existing business relationship.” (Emphasis added.) Whether the 

telephone calls soliciting the sale of a new contract are made after or before the initial contract term 

expires, the calls fall within the exception of subsection (b)(3). 

‘(...continued) 

disconnected five seconds after the call is terminated. See Act of May 26, 1999,76th Leg., R.S., H.B. 450, 5 1 (to be 

codified at TEX. BUS. & COM. CODE ANN. 5 37.02(a)(3)). 

%e Act of May 26,1991,72d Leg., RX, ch. 494.5 1,199l Tex. Gen. Laws 1736. 
Mr. Wayne Thorbum - Page 4 W-0078) 

Because section 37.02(b)(3) exempts qualifying calls only from the requirements of section 

37.02(a), however, the section 37.03 restrictions on charges to consumer credit card accounts would 

still apply. Consequently, if a residential service contract is sold by a telephone solicitation, the 

residential service company may not make any charges to the consumer’s credit account unless the 

company complies with those restrictions. Accordingly, in answer to your second question, the 

rights of a consumer and the obligations of a licensed residential service company with respect to 

notice, cancellation, and refund are as set out in section 37.03 if an amount is to be charged to the 

consumer’s credit account. 

We turn now to your next three questions, which relate to chapter 39 of the Business and 

Commerce Code. You first ask if chapter 39 applies to “solicitations of the sale of a residential 

service contract by a licensed real estate broker or salesperson at a location other than the licensee’s 

office, such as at a home being listed or shown to a prospective buyer?’ See Request Letter of 

7/22/98. Baaed on the information provided, we understand you to ask about the sale of a contract 

providing initial residential service coverage when a home is purchased. 

Chapter 39 gives consumers the opportunity to cancel certain transactions. A consumer may 

cancel a transaction subject to the statute before midnight of the third business day after the 

consumer signs an agreement or offers to purchase real or personal property, services, money, or 

credit for personal or household purposes. See TEX. Bus. & COM. CODE ANN. $3 39.001(l) 

(definition of “consumer”), 39.003 (right to cancel) (Vernon Supp. 1999). It requires a merchant to 

provide a consumer a receipt or copy of a contract at the time it is executed and to include in it 

certain information and forms of notices of cancellation. Id. 5 39.004(a) - (c). Additionally, the 

statute sets out the rights, duties and obligations of a merchant and a consumer with respect to 

compensation for services and retention and return of property, id. $5 39.005, .006, ,007, and acts 

that constitute violations of the Act and the penalties for such violations. Id. 9 39.008. Among other 

penalties, a sale or contract made in violation of the statute is void. Zd: 5 39.008(b). 

Chapter 39 does not limit its application to door-to-door salesmen or contracts made at the 

consumer’s home although originally enacted for that purpose. See Act ofMay 27,1995,74th Leg., 

R.S, ch. 926, $ 1, 1995 Tex. Gen. Laws 4649 (redefining “home solicitation transaction” to include 

transaction in which merchant engages in personal solicitation of consumer at place other than 

merchant’s place ofbusiness and not only residence); McDaniel Y. Pettigrew, 536 S.W.2d 611,614 

(Tex. Civ. App.-Dallas 1976, writ ref d n.r.e.) (discussing original intent). It generally applies to 

any consumer transaction consummated at a place other than the seller’s place ofbusiness. Section 

39.002 sets out the transactions to which chapter 39 applies and provides as follows: 

(a) This chapter applies only to a consumer transaction in which 

the merchant or the merchant’s agent engages in a personal 

solicitation of a sale to the consumer at a place other than the 

merchant’s place ofbusiness, and the consumer’s agreement or offer 
Mr. Wayne Thorbum - Page 5 (X-0078) 

to purchase is given to the merchant or the merchant’s agent at a 

place other than the merchant’s place of business: 

(1) for the purchase of goods or services for consideration that 

exceeds $25 payable in installments or in cash; or 

(2) for the purchase of real property for consideration that 

exceeds $100 payable in installments or in cash. 

(b) Notwithstanding Subsection (a), this chapter does not apply 

to: 

(1) a purchase of farm equipment; 

(2) an insurance sale regulated by the Texas Department of 

Insurance; 

(3) a sale of goods or services made: 

(A) under a preexisting revolving charge account or 

retail charge agreement; or 

(B) after negotiations between the parties at a business 

establishment at a fixed location where goods or services are offered 

or exhibited for sale; or 

(4) a sale of real property iE 

(A) the purchaser is represented by a licensed attorney; 

(B) the transaction is negotiated by a licensed real estate 

broker; or 

(C) the transaction is negotiated at a place other than the 

consumer’s residence by the person who owns the property. 

TEX. Bus. & COM. CODE ANN. 5 39.002 (Vernon Supp. 1999). “Consumer transaction” for the 

purposes of section 39.002(a) is “a transaction in which one or more of the parties is a consumer.” 

Id. 5 39.001(2). “Consumer,” in turn, is “an individual who seeks or acquires real or personal 

property, services, money, or credit for personal, family, or household purposes[,]” and “merchant” 

is “a party to a consumer transaction other than a consumer.” Id. 5 39.001(l), (3). Lastly, 
Mr. Wayne Thorburn - Page 6 UC-0078) 

“merchant’s place of business,” in relevant part, is the “merchant’s main or permanent branch office 

or local address.” Id. 5 39.001(4). 

Sale of a residential service contract on its face partially satisfies the consumer transaction 

definition of section 39.002(a) in that a consumer in such transaction seeks or acquires services and 

goods for household purposes. See TEX. REV. CIV. STAT. ANN. art. 6573b, 5 4(a) (Vernon Supp. 

1999) (definition of “residential service contract”). To constitute a consumer transaction to which 

chapter 37 applies, however, it must also involve (1) a solicitation by a “merchant or merchant’s 

agent” and (2) an agreement to purchase at a place other than the merchant’s place of business. We 

address each of these more complex and factually based requirements in turn. 

It is not clear that the real estate broker or salesperson is a “merchant or merchant’s agent.” 

The few Texas cases that have considered the statute, have not construed this term. See American 

Quality Roofing v. Ipock, Inc., 730 S.W.2d 470 (Tex. App.-Fort Worth 1987, no writ) (roof repair 

contract made at consumer’s home subject to statute); Langston v. Brewer, 649 S.W.2d 827 (Tex. 

App.-Fort Worth 1983, no writ) (remodeling contract not subject to statute because parties had 

engaged in prior transaction, consumer contacted merchant, and parties had negotiated contract away 

from consumer’s residence before its execution); Homquest v. Priesmeyer, 574 S.W.2d 173 (Tex. 

Civ. App.-Houston [lst Dist.] 1978, no writ) (architect contract not subject to statute because 

consumer sought architect’s services and engaged in negotiations away from consumer’s home 

before contract was prepared); McDaniel v. Pettigrew, 536 S.W.2d 611 (Tex. Civ. App.-Dallas 

1976, writ refd n.r.e.) (statute does not apply to real estate transaction contract negotiated by 

licensed real estate broker; additionally, consumers not builders engaged in solicitation). Based on 

the statutory language, the broker or salesperson is not the “merchant” as defined in the statute, 

because the party other than the consumer to the residential service transaction is the residential 

service company. But if the broker or salesperson solicits the sale of the contract, he or she is acting 

on behalf of the residential service company and likely would be considered the merchant’s agent. 

See McDaniel, 536 S.W.2d at 615 (provisions of statute must be liberally construed to effect its 

object); I OXFORD ENGLISH DICTIONARY 248 (2d ed. 1989) (defining “agent,” as relevant here, as 

“one who acts for another”); BLACK'S LAW DICTIONARY 59 (5th ed. 1979) (defining “agent” 

generally as one who represents or acts for another under contract or agency relation). Whether a 

person acts in any particular case as an agent for another, however, is a factual determination. 

Additionally, to constitute a consumer transaction described by subsection (a), the seller or 

the prospective home buyer must also agree to purchase the residential services at the home being 

shown or at a place other than the merchant’s place of business. Thus, if the home seller or the home 

buyer agrees to purchase the residential services at the home or at a place other than the merchant’s 

place of business, the residential service sale solicitation is a consumer transaction described in 

section 39.002(a). The location where the agreement is given or the contract executed would 

necessarily vary with each case and its determination would therefore require a case-by-case 

analysis. 
Mr. Wayne Thorbum - Page 7 (X-0078) 

In sum, a residential service sale solicitation by a licensed real estate broker or salesperson 

at a home being listed or shown to a prospective buyer is a consumer transaction described in section 

39.002(a) to which chapter 39 applies if the following criteria are met: (1) the broker or salesperson 

acts as the agent of the residential service company, and (2) the home seller or the home buyer agrees 

to purchase the services at the home being shown or at a place other than the merchant’s place of 

business. 

But a residential service contract sale that is a consumer transaction under section 39.002(a) 

to which chapter 39 otherwise applies, might be, in certain circumstances, excluded from the 

application of chapter 39 under section 39.002(b). 

A residential service contract sale is plainly not the purchase of farm equipment or made 

under a preexisting revolving or retail charge account. Nor is such a contract the purchase of real 

property. Rather, the contract is for the sale of residential repair, maintenance, and replacement 

services that may result in improvements to realty or in installation ofitems that may become affixed 

to the realty, but it is not for the sale of the realty itself. See TEX. REV. CIV. STAT. ANN. art. 6573b, 

5 4(a) (Vernon Supp. 1999). Although we found no cases in Texas or in otherjurisdictions that deal 

with residential service or similar contracts, we note that home remodeling or repair contracts, which 

also result in improvements to realty or in installation of items that become affixed to a home, have 

generally not been excepted under the realty exception to home solicitation statutes. See American 

QualityRoojing,Inc., 730 S.W,2d470(roofrepaircontract subjectto statute); Lungston, S.W.2d 

827 (remodeling of garage as beauty shop excepted from statute because of prior relationship 

between parties); R. Bauer & Sons Roofing & Siding, Inc. v. Kinder-man, 613 N.E.2d 1083 (Ohio Ct. 

App. 1992) (contract for installation of roof, windows and door not covered by realty exception); 

Crystal v. West & Callahan, Inc., 614 A.2d 560 (Md. Ct. App. 1992) (contract to improve porch not 

covered by real estate exception even though it resulted in improvements to realty). Additionally, 

purchase of a residential service contract is optional and not a condition of the sale of the realty. 

TEX. REV. CIV. STAT. ANN. art. 6573b, 5 1 l(e) (Vernon Supp. 1999). Therefore, purchase of the 

service contract is not such an integral part of the real property sale so as to constitute a sale of real 

property. 

A residential service contract is also not an insurance sale regulated by the Texas Department 

of Insurance. The sale in question involves a sale of residential repair services and residential 

appliances and fixtures regulated by the Commission rather than an insurance sale regulated by the 

Texas Department ofInsurance. See id. 5 2(a) (provisions of insurance law not applicable to service 

company licensed under Residential Service Company Act; provisions of Act inapplicable to 

insurance company licensed and regulated by insurance laws of state), (b) (Act inapplicable to ‘home 

warranty insurance’ as defined by TEX. INS. CODE ANN. art. 5.53-A, 5 2 (Vernon 1981)). 

While not a sale of farm equipment, real property, or insurance, or a sale made under a 

preexisting revolving or retail charge account, a residential service contract sale may, nonetheless, 

fall under section 39,002(b)(3)(B). Subsection (b)(3)(B) excludes the sale of services “made after 

negotiations between the parties at a business establishment at a fixed location where goods or 
Mr. Wayne Thorburn - Page 8 (JC-0078) 

services are offered or exhibited for sale.” Again, whether the parties have engaged in such 

negotiations before the sale of the residential services would vary in each case and its determination 

would therefore require a case-by-case analysis. 

Thus, a solicitation for a residential service contract sale by a licensed real estate broker or 

salesperson otherwise subject to chapter 39, might, nevertheless, be excluded from the application 

of chapter 39 if the parties engaged in prior negotiations at a fixed business establishment where the 

goods and services are offered for sale. 

If chapter 39 applies, you next ask whether a licensed residential company must include in 

the residential service contract the statutory notice and cancellation form required under section 

39.004. Any document pertaining to a consumer transaction provided to a consumer must contain 

a statement, substantially in the form provided by the statute, that the buyer has the right to cancel 

the transaction at any time before midnight of the third business day after the date of the transaction. 

TEX. Bus. & COM. CODE ANN. § 39.004(b)(4) (V emon Supp. 1999). Additionally, the document 

must include a duplicate notice-of-cancellation form setting forth the buyer’s right to cancel within 

the three-day period; the buyer’s right to have any property traded in or payment made and any 

negotiable instrument executed by the buyer returned within ten days of receipt of the cancellation 

notice; the buyer’s obligation to return any goods delivered under the contract; the buyer’s right to 

retain the goods under certain circumstances; and directions regarding what the buyer must do with 

the form provided to cancel the transaction. Id. 5 39.004(c). 

Generally, if a transaction is a consumer transaction governed by chapter 39, the statutory 

notice and cancellation provisions of section 39.004 do apply. A document need not, however, 

include the forms and notices required under that section in certain circumstances. First, the “use 

of the forms and notices of the right to cancel prescribed by the Federal Trade Commission’s traderegulation rule providing a cooling-off period for door-to-door sales constitutes compliance with 

th[e] section.” Id. $39.004(d). Second, a transaction in which the contract price does not exceed 

$200 is deemed to comply with the notice requirements if: 

(1) the consumer may at any time cancel the order, refuse to 

accept delivery of the goods without incurring any obligation to pay 

for them, or return the goods to the merchant and receive a full refund 

of the amount the consumer has paid; and 

(2) the consumer’s right to cancel the order, refuse delivery, or 

return the goods without obligation or charge at any time is clearly 

and conspicuously set forth on the face or reverse side of the sales 

ticket. 

Id. 5 39.004(e). 
Mr. Wayne Thorbum - Page 9 (X-0078) 

Assuming the transaction you ask about is a consumer transaction to which chapter 39 

applies, the residential service contract must include the notice and cancellation form required by 

section 39.004 unless the following requirements are met: (1) the contract includes forms and 

notices required by the Federal Trade Commission’s trade-regulation rule with respect to door-todoor sales, or (2) the contract price does not exceed $200 and the consumer may at any time cancel 

the contract and receive a full refund, which cancellation right is “clearly and conspicuously” set 

forth in the contract. See 16 C.F.R. 53 429.0,429.1-.3 (1998) (Rule Concerning Cooling-OffPeriod 

for Sales Made at Homes or at Certain Other Locations). 

Finally, if chapter 39 applies, you ask “would a licensed residential service company violate 

the Code if it provided a consumer with a cancellation period greater than three days or deleted 

language relating to the sale of goods 7” See Request Letter of 7122198. 

Section 39.003 gives the consumer the right to cancel “not later than midnight of the third 

business day after the date the consumer signs an agreement or offer to purchase.” TEX. Bus. & 

COM. CODE ANN. 9 39.003 (Vernon Supp. 1999) (emphasis added). Section 39.008(a)(l)(D) 

provides that a merchant may not fail to include in the form of cancellation prescribed by the statute 

“a date not earlier than the third business day after the date of the transaction by which the 

consumer must give notice of cancellation.” Id. 5 39.008(a)(l)(D) (emphasis added). 

No Texas case has considered whether providing a cancellation period greater than three days 

violates the above statutory provisions. However, based on the purpose of the statute and its literal 

language, we believe that the provision of a cancellation period greater than three days does not 

violate chapter 39. The statute’s purpose is to protect consumers by giving them at least a three-day 

period in which to cancel a contract executed pursuant to a personal solicitation at a place other than 

the seller’s place of business. Thus, the consumer is entitled to at least three days. Although the 

consumer is not entitled to more than a three-day cancellation period, clearly a seller may choose to 

provide more. Providing the consumer additional protection does not, in our opinion, contravene 

the statute’s minimum protective measures. 

You also ask whether a residential service company would violate chapter 39 if it deleted 

language with respect to the sale of goods in a contract. As discussed above, section 39.004 requires 

that a contract subject to chapter 39 contain a notice of cancellation in the form provided in the 

statute. Subsection (c)(3) of section 39.004 sets out the language to be included in the form, 

including two paragraphs dealing with the consumer’s rights and obligations with respect to return 

of any goods delivered under a contract upon cancellation of the contract. 

Again, no Texas case has considered whether deleting a portion of the section 39.004(c)(3) 

language violates chapter 39. However, we note that there is no statutory provision for deleting or 

modifying the required language. The notice required here is different from that for the deadline to 

cancel. The form in the latter instance gives the discretion to include a date that is later than the 

required minimum three days. See id. 4 39.008(a)(l)(D). But there is no similar discretion to 

modify the section 39,004(c)(3) language. Accordingly, assuming a residential service contract is 
Mr. WayneThorburn - Page 10 (JC-0078) 

subject to chapter 39, we conclude the statutorily required language with respect to goods must be 

included in the notice of cancellation in the contract. Therefore, deleting such language would 

violate the statute. 

SUMMARY 

Chapter 37 of the Business and Commerce Code applies to 

unsolicited telephone calls made by a residential service company for 

the purpose of selling residential service contracts. Accordingly, the 

rights of a consumer and the obligations of a licensed residential 

service company with respect to notice, cancellation, and refund are 

as set out in chapter 37 if an amount is to be charged to the 

consumer’s credit account. However, an unsolicited telephone call 

to sell a new contract to a consumer who held or holds such a contract 

is excepted from chapter 37’s requirements dealing with when and 

how consumer telephone calls must be made. 

Chapter 39 of the Business and Commerce Code applies to 

residential service contract solicitations by a licensed real estate 

broker or salesperson at a home being listed or shown if (1) the 

broker or salesperson is acting as the agent for the residential service 

company, and (2) the purchaser agrees to purchase the services at the 

home or a place other than the merchant’s place of business. 

However, such a transaction may be excepted from chapter 39 if the 

parties engaged in prior negotiations at a fixed business 

establishment. 

If a transaction is subject to chapter 39, the residential service 

contract must include the notice and cancellation form as required by 

section 39.004. A residential service contract subject to chapter 39 

that provides a cancellation period greater than three days would not 

violate chapter 39. A residential service contract subject to chapter 

39 that does not include the statutorily required language with respect 

to the return of goods sold would violate chapter 39. 

Y sve trul 

? 

-. 4 c-ii- ,c JOHN CORNYN 

Attorney General of Texas 
Mr. Wayne Thorbum - Page 11 

ANDY TAYLOR 

First Assistant Attorney General 

CLARK KENT ERVIN 

Deputy Attorney General - General Counsel 

ELIZABETH ROBINSON 

Chair, Opinion Committee 

Prepared by Sheela Rai 

Assistant Attorney General 

(~~-0078)