New York Laws
Article 26 - Miscellaneous
394-B - Limitations on Certain Contracts for Instruction or Use of Physical or Social Training Facilities.

(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.

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