HOUSE OF REPRESENTATIVES

H.B. NO.

1422

TWENTY-EIGHTH LEGISLATURE, 2015

H.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO SERVICE CONTRACTS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Chapter 481X, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§481X-    Claims under a service contract; provider disclosure.  (a) When a contract holder makes the first claim on a service contract during the contract period, the provider of the service contract shall disclose to the contract holder that, pursuant to section 481X-7(b), if the claim is charged against the service contract, the contract holder shall not be entitled to a refund of the full purchase price of the service contract.

     (b)  Upon presentation of the first claim, a contract holder who has purchased a service contract buyback agreement shall be notified by the obligor of the service contract buyback agreement that the contract holder shall not be entitled to reimbursement of the full purchase price of the service contract."

     SECTION 2.  Section 481X-2, Hawaii Revised Statutes, is amended as follows:

     1.   By adding a new definition to be appropriately inserted and to read:

     ""Service contract buyback agreement" means a contract or agreement that refunds the provider fee to the contract holder if no claim is made on the service contract.  The service contract buyback agreement is separate and apart from a service contract and is paid for with separately stated consideration."

     2.   By amending the definition of "service contract" to read:

     ""Service contract" means a contract or agreement for a separately stated consideration and a specific duration, to perform or indemnify the repair, replacement, or maintenance of property for operational or structural failure due either to a defect in materials or artisanship, or to normal wear and tear, with or without additional provision for incidental payment or indemnity under limited circumstances, including but not limited to towing, rental, and emergency road service.  Service contracts may provide for the repair, replacement, or maintenance of property damaged by power surges, or accidentally damaged during handling.  Contracts labeled extended warranties that meet this definition are service contracts."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on June 30, 2112.


 


 

Report Title:

Service Contracts; Extended Warranties; Disclosure

 

Description:

Requires providers of service contracts and the obligors of service contract buyback agreements to disclose to contract holders that a claim against the contract voids the contract holder's right to a full refund.  (HB1422 HD2)

 

 

 

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