Are you a contractor who sells services directly to customers at their homes or outside your ordinary place of business? If so, do you know about Ohio’s Home Solicitation Sales Act? Understanding this law is crucial, and if you are not familiar with it, you need to be—here’s why.
The Home Solicitation Sales Act
The Home Solicitation Sales Act (HSSA) applies to transactions in which a “seller,” as defined by the HSSA, personally solicits a sale of consumer goods or services at a location other than their usual place of business—typically a consumer’s home. However, the HSSA also covers sales made to consumers outside of their residence, such as at a fair, exhibition hall, or hotel conference room so long as that place is not the seller’s place of business.
The primary goal of the HSSA is to protect consumers from high-pressure sales tactics by granting them a three-day “cooling-off” period after agreeing to purchase materials or services. The period ends at midnight on the third business day after the sale. During this period, consumers have the right to cancel the sale without penalty.
Required Provisions
Under the HSSA, sellers are required to provide consumers with a written agreement including detailed provisions more specifically outlined in the statute, such as the date of the transaction, the seller’s name and address, and a notice of cancellation form explaining the consumer’s right to cancel the sale during the “cooling-off” period. Except for sales and installation of home security systems that are governed differently under the Act, a seller of services is not allowed to begin performing any services until the “cooling-off” period has expired.
Certain identified transactions are exempt from the HSSA, such as sales under $25.00 and transactions entirely conducted by mail or telephone if initiated by the buyer.dd
Consequences of Non-Compliance
Failure to comply with the HSSA constitutes a “deceptive act or practice in connection with a consumer transaction” that may also violate the Consumer Sales Practices Act (CSPA), a broader subset of Ohio law aimed at preventing deceptive business practices. Claims of HSSA violations are often accompanied by allegations of other CSPA violations.
If a HSSA violation is accompanied by a CSPA violation, then consumers must elect the remedies they wish to pursue. Generally, under the HSSA, the remedy to the consumer is the cancellation of the contract. If the consumer elects to cancel the contract, they may recover the amounts paid under the contract—as if the contract never existed. However, this approach is subject to certain defenses and claims a contractor that has provided labor and/or materials may assert to reduce the amount owed back to a consumer. However, remedies under the CSPA could include actual damages and potentially treble damages and attorney’s fees and costs if certain conditions are met.
Conclusion
In sum, the goal of the HSSA is to provide consumers with time to reconsider purchases they might have initially declined but were persuaded to accept. However, it can also result in consumers receiving substantial refunds based on certain technicalities required by the HSSA of which a seller was not aware. As a result, businesses that engage in sales with consumers outside their regular place of business must ensure compliance with the HSSA. Among other things, this includes providing the legally required three-day notice of the right to cancel in the exact form mandated by Ohio law, as even minor deviations may result in a violation.
If you have questions about whether the HSSA applies to your business or if your contracts are compliant with the statutory requirements, KJK attorneys can help. For assistance on HSSA and CSPA matters, please contact Nathan F. Studeny (NFS@kjk.com) or Michael R. Cantu (MRC@kjk.com).