NY Gen Bus L § 394-B (2021)
2021 New York Laws GBS - General Business Article 26 - Miscellaneous 394-B - Limitations on Certain Contracts for Instruction or Use of Physical or Social Training Facilities.

§  394-b.  Limitations  on certain contracts for instruction or use of physical or social training facilities. 1. (a)  "Total  contract  price" shall  mean  the  total  cash  price paid or to be paid by the buyer for instruction or services which are the subject of the written contract.  (b) "Notice of cancellation" shall be deemed to have been provided  by a  buyer  by  mailing  or  delivering written notification to cancel the contract to the seller or by failing to attend instructional  facilities for  a  period  of five consecutive appointment days on which classes or the provisions of services which are the subject of  the  contract  were prearranged with the buyer.  (c)  "Reasonable  and  fair  service  fee" shall mean no more than ten percent of the total  contract  price  for  contracts  of  one  thousand dollars  and  under. For contracts over one thousand dollars, reasonable and fair service fee shall mean no more than one hundred dollars plus an amount equal to five percent  of  the  total  contract  price  over  one thousand dollars, not to exceed two hundred fifty dollars.  (d)  "Initial  contract"  shall  mean  the  buyers  first contract for services.  Subsequent  contracts  shall  be  referred  to  as  renewals. Contracts  for  services  which  are  entered  into,  after  a  lapse of contractual service for a period of twelve consecutive months, shall  be deemed to be initial contracts.   2.  Any  contract for instruction in physical or social skills, or for the use by an individual patron of a dance  hall  studio,  ballroom,  or other  physical  or other social training facility, which is measured by the life of the person receiving such instruction or  the  use  of  such physical  or  social training facility as an individual patron, shall be deemed void and unenforceable as contrary to public policy.   3. Any initial contract for instruction in physical or social  skills, or for the use by an individual patron of a dance hall studio, ballroom, or  other physical or social training facility which requires payment by the person receiving such instruction, or the use of  such  physical  or social  training facilities, of a total amount in excess of five hundred dollars, or granting  to  the  person  furnishing  such  instruction  or providing  the use of such facilities, an automatic renewal option where the payments to be made during the  original  contract  period  and  the option  period  combined are in excess of five hundred dollars, shall be valid and enforceable only if: (a) The term of the contract shall be for a precisely measured period of years, or any definite part thereof;  and (b)  the  payments  to  be  made  thereunder  shall be in instalments so computed that the total amounts so paid shall not exceed  by  more  than five  percent  the  prorated  cost  of  the  units of instruction or use actually received thereunder at the time the latest payment is made; or, if no definite number of units of instruction or use is specified in the contract, the total amount so paid shall not exceed by  more  than  five percent  the  proportion  of  the  total contract price that the expired portion of the entire term bears to the whole term of the contract.   4. No contract for services shall be assigned without written  consent of the person receiving such instruction or for the use of such physical or social training facility.   5.  (a)  Every  contract for services shall provide that such contract may be canceled at any time. Notice of cancellation shall  be  delivered or  mailed  by certified or registered United States mail at the address specified in the contract. Such contract  shall  contain  the  following written  information  in  at  least  ten point type: "CONSUMERS RIGHT TO CANCELLATION. YOU MAY CANCEL THIS CONTRACT AT ANY TIME BY DELIVERING  OR MAILING  BY  CERTIFIED  OR  REGISTERED UNITED STATES MAIL TO THE ADDRESS SPECIFIED IN THE CONTRACT. IF YOU CANCEL THE CONTRACT WITHIN  THREE  (3) DAYS FROM THE DATE OF RECEIPT, YOU WILL BE ENTITLED TO A FULL REFUND. TO  CANCEL  A  CONTRACT  WITHIN  THREE  (3) DAYS FROM THE DATE OF RECEIPT BY REGISTERED OR CERTIFIED MAIL, SUCH MAIL MUST BE  POSTMARKED  WITHIN  THE THREE  (3)  DAY  PERIOD.  AFTER  THE  THREE  (3)  DAY PERIOD, YOU MAY BE ASSESSED A REASONABLE AND FAIR SERVICE FEE. IF YOU UTILIZED SERVICES AND SUBSEQUENTLY   CANCEL  THE  CONTRACT,  YOU  WILL  BE  CHARGED  ONLY  FOR INSTRUCTION SERVICES  ACTUALLY  FURNISHED  AND  A  REASONABLE  AND  FAIR SERVICE  FEE,  AS  DEFINED  IN PARAGRAPH (C) OF SUBDIVISION 1 OF SECTION 394-B OF THE GENERAL BUSINESS LAW. A  BREACH  OF  THIS  PROVISION  SHALL SUBJECT  THE  SELLER TO PAY DAMAGES UP TO TWICE THE AMOUNT OF THE ACTUAL DAMAGES  PLUS  REASONABLE  ATTORNEYS  FEES."  The  provisions  of   this paragraph  shall  be  specifically  set  forth  in  every  contract  for services; or in the event that such provisions  are  omitted  therefrom, they  shall  be  deemed  a part of such contract by operation of law and shall be enforceable as though fully set forth therein.  (b) All moneys paid pursuant to such contract shall be refunded within thirty business days of receipt of such notice of cancellation.  If  the buyer  has  executed any credit or loan agreement to pay for all or part of the service, any such negotiable instrument  executed  by  the  buyer shall  also  be  returned within thirty days. Any buyer who cancels such contract within three days of execution shall  be  entitled  to  a  full refund. After the three day time frame, a seller may assess a reasonable and  fair service fee. In addition, the prorated cost of any instruction provided may be deducted out of the refund amount.  (c) If a buyer fails to attend instructional facilities for  a  period of  five consecutive appointment days on which classes for the provision of services which are the subject of the contract were prearranged  with the buyer, the contract shall be deemed to be canceled, unless the buyer otherwise  provides written consent to maintain the contract. All monies shall be  refunded  pursuant  to  paragraph  (b)  of  this  subdivision, however,  the  instructional  facility  may withhold monies to cover the prorated cost of the prearranged instructional  services  in  which  the buyer failed to attend.   6.  Nothing  herein  shall  be  construed  to  apply  to contracts for instruction at schools operating  pursuant  to  the  provisions  of  the education law.   7. This section shall apply to all contracts to be executed or renewed after May first, nineteen hundred sixty-four.   8. Any contract for services which is inconsistent with the applicable provisions of this section and any waiver by the buyer of the provisions of  this  section  shall be void and unenforceable as contrary to public policy.   9. Nothing in this section shall be construed  so  as  to  nullify  or impair  any  right  or rights which a buyer may have against a seller at common law, by statute, or otherwise.   10. In addition to the remedies hereinbefore  provided,  the  attorney general  may  bring  an  action  on behalf of the people of the state to restrain further violations of this section, to enforce  the  provisions of this section and for such other relief as may be appropriate.   11.  No  provision  of  this  section  shall be deemed to restrict the authority of any county, city, town or  village  to  enact  and  enforce additional  laws, ordinances or codes, or portions thereof, provided the provisions thereof are not inconsistent  with  the  provisions  of  this section.