Can a contract term cut off a South Dakota deceptive-trade-practices claim, and does the Act protect only individual consumers?
The Act's reach is broader than "consumers" alone, and for door-to-door sales specifically, putting a waiver of the buyer's rights into the contract is itself a deceptive act: SDCL 37-24-5.5 makes it “a deceptive act or practice, within the meaning of § 37-24-6, for any seller to include in any door to door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter.” SDCL 37-24-6 makes it a deceptive act or practice to "[k]nowingly act, use, or employ any deceptive act or practice, fraud, false pretense, false promises, or misrepresentation or to conceal, suppress, or omit any material fact in connection with the sale or advertisement of any merchandise... regardless of whether any person has in fact been misled, deceived, or damaged thereby," among other enumerated practices. Moss v. Guttormson confirms the private right of action under SDCL 37-24-31 is not limited to consumers in the ordinary sense: "While SDCL Chapter 37-24 obviously assists consumers seeking relief as victims of deceptive trade practices, the broad statutory language includes more than only consumers." For door-to-door sales specifically, SDCL 37-24-5.5 makes any waiver of the buyer's statutory rights itself a deceptive act: "It is a deceptive act or practice... for any seller to include in any door to door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter including specifically his right to cancel the sale in accordance with the provisions of this chapter."
The trap
Moss's "more than only consumers" holding cuts against assuming a business-to-business contract is automatically outside the Act's reach the way it would be under a statute expressly limited to personal, family, or household purchasers: SDCL 37-24-31's "[a]ny person who claims to have been adversely affected" language is broader on its face, and Moss read it that way. The door-to-door anti-waiver rule in § 37-24-5.5 is narrower in scope than it might first appear, though: it applies specifically to a "door to door sale" as SDCL 37-24-5.1 defines that term, and SDCL 37-24-5.2 excludes several common transaction types from that definition entirely: a sale following the buyer's visit to a seller's fixed retail location, a sale already subject to Truth in Lending Act rescission rights, a buyer-initiated emergency repair with a signed waiver statement, a sale by mail or telephone with no other contact, and sales of real property, insurance, securities, motor vehicles, metal buildings, farm machinery, or mobile homes by a dealer with a fixed location. A contract that falls into one of those exclusions is not a "door to door sale" for § 37-24-5.5 purposes even if it was in fact negotiated away from the seller's place of business. Two further points from §§ 37-24-5.1 and 37-24-5.2, now carried in full below rather than summarised: the definition has a price FLOOR (a "door to door sale" is a sale, lease, or rental "with a purchase price of twenty-five dollars or more, whether under single or multiple contracts"), and it expressly includes a solicitation made "in response to or following an invitation by the buyer," so the buyer having asked the seller to come does not by itself take the sale out of the definition. There is also a SEVENTH exclusion the list above did not name: a buyer-initiated visit to repair or maintain the buyer's own personal property, except that selling additional goods or services during that visit "would not fall within this exclusion."
5 authorities
- statuteSDCL § 37-24-6enactment date not established
The words that state the rule
Knowingly act, use, or employ any deceptive act or practice, fraud, false pretense, false promises, or misrepresentation or to conceal, suppress, or omit any material fact in connection with the sale or advertisement of any merchandise or the solicitation of contributions for charitable purposes, regardless of whether any person has in fact been misled, deceived, or damaged thereby;
- statuteSDCL § 37-24-5.5enactment date not established
The words that state the rule
It is a deceptive act or practice, within the meaning of § 37-24-6 , for any seller to include in any door to door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter including specifically his right to cancel the sale in accordance with the provisions of this chapter.
The words that state the rule
While SDCL Chapter 37-24 obviously assists consumers seeking relief as victims of deceptive trade practices, the broad statutory language includes more than only consumers. The statute provides, “[a]ny person who claims to have been adversely affected by any act or a practice declared to be unlawful by § 37-24-6 shall be permitted to bring a civil action for the recovery of actual damages suffered as a result of such act or practice.”
- statuteSDCL § 37-24-5.1enactment date not established
The words that state the rule
In this chapter, unless the context otherwise requires, "door to door sale" means, except as provided by § 37-24-5.2 , any sale, lease, or rental of goods or services with a purchase price of twenty-five dollars or more, whether under single or multiple contracts, in which the seller or his representative personally solicits the sale, including those in response to or following an invitation by the buyer, and the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller.
- statuteSDCL § 37-24-5.2enactment date not established
The words that state the rule
The term "door to door sale" shall not include any transaction: (1) Made pursuant to prior negotiations in the course of a visit by the buyer to a retail business establishment having a fixed permanent location where the goods are exhibited or the services are offered for sale on a continuing basis; or (2) In which the consumer is accorded the right of rescission by the provisions of the Consumer Credit Protection Act (15 U.S.C. 1635); or (3) In which the buyer has initiated the contact and the goods or services are needed to meet a bona fide immediate personal emergency of the buyer, and the buyer furnishes the seller with a separate dated and signed personal statement in the buyer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within three business days; or (4) Conducted and consummated entirely by mail or telephone, and without any other contact between the buyer and the seller or its representative prior to delivery of the goods or performance of the services; or (5) In which the buyer has initiated the contact and specifically requested the seller to visit his home for the purpose of repairing or performing maintenance upon the buyer's personal property. If in the course of such a visit, the seller sells the buyer the right to receive additional services or goods other than replacement parts necessarily used in performing the maintenance or in making the repairs, the sale of those additional goods or services would not fall within this exclusion; or (6) Pertaining to the sale or rental of real property, to the sale of insurance or to the sale of securities or commodities by a broker-dealer registered with the Division of Insurance, Department of Labor and Regulation; or (7) Pertaining to the sale, lease or repair of motor vehicles, metal buildings, farm machinery or implements, or mobile homes, by a dealer having a fixed permanent location and place of business in South Dakota where such goods and services are offered on a continuing basis.