Chapter 1 Filing of Assumed Name

6-1-1. Filing of business name required.

No person or persons shall carry on or conduct or transact business in this state under any assumed name, or under any designation, name, or style, corporate or otherwise, other than the real name or names of the individual or individuals conducting or transacting business, unless the person or persons shall file, in the office of the town or city clerk in the town or city in which the person or persons conduct or transact, or intend to conduct or transact, business, a certificate stating the name under which the business is, or is to be, conducted or transacted, and the true or real full name or names, both the first name and surname, of the person or persons conducting or transacting the business, with the post office address or addresses of the person or persons. The certificate shall be executed and sworn to by the person or persons so conducting or intending to conduct the business, before some person authorized to administer oaths.

History of Section. P.L. 1910, ch. 538, § 1; P.L. 1911, ch. 665, § 1; G.L. 1923, ch. 214, § 1; G.L. 1938, ch. 386, § 1; G.L. 1956, § 6-1-1 .

Cross References.

Name assumed by limited partnership, § 7-13-6 .

Comparative Legislation.

Trade names:

Conn. Gen. Stat. § 35-1 et seq.

Mass. Ann. Laws ch. 110, § 4 et seq.

NOTES TO DECISIONS

Service of Process.

In attachment proceedings commenced under § 10-5-19 , fact that defendant transacted business under an assumed name without filing certificate in accordance with this section did not relieve plaintiff of the necessity of having process duly served on defendant in conformity with the statute. Leverton v. Unwin, 72 R.I. 204 , 49 A.2d 472, 1946 R.I. LEXIS 63 (1946).

Collateral References.

Abandonment of trademark or tradename. 3 A.L.R.2d 1226.

Amendment of process or pleading by changing, or correcting mistake in trade name of individual. 124 A.L.R. 128.

Benevolent or fraternal society or organization as entitled to protection against use of same or similar name, insignia, or ritual by another organization. 76 A.L.R.2d 1396.

Corporation doing business and making contracts under assumed or fictitious name. 56 A.L.R. 450.

Granting of “naked” or unsupervised license to third party as abandonment of trademark. 118 A.L.R. Fed. 211.

Incorporation of company under particular name as creating exclusive right to such name. 68 A.L.R.3d 1168.

Names of persons interested, statutes as to doing business under designation not showing, as affecting action by one who has assumed a trade name for infringement thereof. 45 A.L.R. 234; 42 A.L.R.2d 516.

Parody as trademark or tradename infringement. 92 A.L.R. Fed. 25.

Right of charitable or religious association or corporation to protection against use of same or similar name of another. 37 A.L.R.3d 277.

Right to protection of corporate name, as between domestic corporation and foreign corporation not qualified to do business in state. 26 A.L.R.3d 994.

Right to sue for infringement of tradename as affected by violation of statute as to doing business under assumed or fictitious name or designation not showing the names of the persons interested. 42 A.L.R.2d 542.

Statutes as to doing business under fictitious name or designation not showing the names of persons interested. 45 A.L.R. 198; 42 A.L.R.2d 516.

Unfair competition by use of assumed name. 19 A.L.R. 952; 962.

Use of assumed or trade name as ground for disciplining attorney. 26 A.L.R.4th 1083.

Use of “family name” by corporation as unfair competition. 72 A.L.R.3d 8.

6-1-2. Indexes — Filing fee — Certified copies as evidence.

The several town and city clerks of this state shall keep alphabetical indexes of all persons filing certificates and of all names or styles assumed, referred to in this chapter, and, for the indexing and filing of the certificates, the town and city clerks shall receive for the benefit of the town or city a fee of ten dollars ($10.00) each. A copy of the certificate, duly certified to by the town or city clerk in whose office the certificate shall be filed, shall be presumptive evidence in all courts in this state of the facts contained in the certificate.

History of Section. P.L. 1910, ch. 538, § 3; G.L. 1923, ch. 214, § 2; G.L. 1938, ch. 386, § 2; G.L. 1956, § 6-1-2 ; R.P.L. 1957, ch. 81, § 1; P.L. 1986, ch. 164, § 1.

6-1-3. Corporations — Partnership names.

This chapter shall in no way affect or apply to any corporation or limited partnership duly organized under the laws of this state, or to any corporation or limited partnership organized under the laws of any other state and lawfully doing business in this state, or to any partnership or joint venture, the name or designation of which includes the true or real surname of at least one individual who is a partner or joint venturer.

History of Section. P.L. 1910, ch. 538, § 4; G.L. 1923, ch. 214, § 3; G.L. 1938, ch. 386, § 3; G.L. 1956, § 6-1-3 ; P.L. 1989, ch. 518, § 1.

6-1-4. Penalty for violations.

Any person or persons carrying on, conducting, or transacting business as mentioned in this chapter who shall fail to comply with the provisions of this chapter shall be imprisoned not exceeding one year, or fined not exceeding five hundred dollars ($500).

History of Section. P.L. 1910, ch. 538, § 5; G.L. 1923, ch. 214, § 4; G.L. 1938, ch. 386, § 4; G.L. 1956, § 6-1-4 .

Chapter 2 Registration and Protection of Trademarks

6-2-1. Definitions.

As used in this chapter, the following words, unless the context otherwise requires, have the following meanings:

  1. “Applicant” means any person filing an application for registration of a mark under this chapter, his or her legal representatives, successors, or assigns;
  2. “Mark” means any trademark or service mark entitled to registration under this chapter whether registered or not;
  3. “Person” means any individual, firm, partnership, corporation, association, union, or other organization;
  4. “Registrant” means any person to whom the registration of a mark under this chapter is issued, his or her legal representative, successors, or assigns;
  5. “Service mark” means a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others;
  6. “Trade name” means a word, name, symbol, device, or any combination thereof used by a person to identify his or her business, vocation, or occupation and distinguish it from the business, vocation, or occupation of others;
  7. “Trademark” means any word, name, symbol, or device, or any combination of them, adopted and used by a person to identify goods made or sold by him or her, and to distinguish them from goods made or sold by others;
  8. For the purposes of this chapter, a trademark is deemed to be “used” in the state:
    1. On goods when it is placed in any manner on the goods or their containers or the displays associated with the goods or their containers, or on the tags or labels affixed to them, and the goods are sold or otherwise distributed in the state; and
    2. On services when it is used or displayed in the sale or advertising of services, and the services are rendered in the state.

History of Section. P.L. 1975, ch. 89, § 2.

Repealed Sections.

The former chapter (P.L. 1899, ch. 627, §§ 1-4; P.L. 1900, ch. 735, §§ 1-7; P.L. 1903, ch. 1115, § 1; G.L. 1909, ch. 196, §§ 1-7; G.L. 1909, ch. 198, §§ 1-4; P.L. 1919, ch. 1782, § 1; G.L. 1923, ch. 223, §§ 1-7; G.L. 1923, ch. 225, §§ 1-4; P.L. 1928, ch. 1229, §§ 1-3; P.L. 1931, ch. 1747, § 1; G.L., ch. 223, §§ 7 and 8; P.L. 1931, ch. 1747, § 1; G.L. 1938, ch. 394, §§ 1-8; G.L. 1938, ch. 395, §§ 1-3; G.L. 1938, ch. 396, §§ 1-4; G.L. 1956, §§ 6-2-1 6-2-1 8; P.L. 1960, ch. 71, Art. 3, § 25; P.L. 1971, ch. 165, §§ 1 and 2), concerning trademarks and trade names, was repealed by P.L. 1975, ch. 89, § 1.

Cross References.

Counterfeiting generally, § 11-17-1 et seq.

Motor fuel brand names, display, § 31-37-16 .

Comparative Legislation.

Trademarks and trade names:

Conn. Gen. Stat. § 35-11a et seq.

Mass. Ann. Laws ch. 110, § 1 et seq.

Collateral References.

Abandonment of trade-mark or trade name. 3 A.L.R.2d 1226.

Actual competition as necessary element of trade-mark infringement or unfair competition. 148 A.L.R. 12.

Advertising matter or methods, right to protection against appropriation of. 17 A.L.R. 760; 30 A.L.R. 615; 5 A.L.R. Fed. 625.

Automobile association, right of, to exclusive use of name or insignia. 83 A.L.R. 712.

Book, imitation of get up or appearance of. 19 A.L.R. 960; 964.

Commercial competitor’s truthful denomination of his goods as copies of designs of another, using designer’s name, as trademark infringement, unfair competition, or the like. 1 A.L.R.3d 760.

Doctrine of secondary meaning in law of trade-marks and of unfair competition. 150 A.L.R. 1067.

“Drive it yourself” and similar phrases in connection with business of renting automobiles. 43 A.L.R. 213.

Entrapment to commit offense of counterfeiting trade-mark labels. 18 A.L.R. 160; 66 A.L.R. 478; 86 A.L.R. 263.

Foreign trade-mark, sale under, of product of foreign manufacturer as infringement of same trade-mark registered in United States. 26 A.L.R. 570.

Geographical extent of protection of word or symbol under doctrine of secondary meaning. 41 A.L.R.3d 434.

Initials, right to protection in use of, as a trade-mark or trade name. 11 A.L.R. 1286.

Joint adventure, agreement between holder of trade-mark and manufacturer as. 48 A.L.R. 1070; 63 A.L.R. 909; 80 A.L.R. 312; 95 A.L.R. 857; 138 A.L.R. 990.

Liability as vicarious or contributory infringer under Lanham Act — Modern cases. 152 A.L.R. Fed. 573.

Parody as trademark or tradename infringement. 92 A.L.R. Fed. 25.

Place of business, right to protection against simulation of physical appearance or arrangement of. 17 A.L.R. 784; 28 A.L.R. 114.

Protection, as trade-mark, of union label, shop card, or other insignia denoting union ship or workmanship. 42 A.L.R.2d 718.

Protection of name, title or slogan for purposes of motion pictures, radio, and television by application of rules of unfair competition. 23 A.L.R.2d 302.

Right to protection against use of trade-mark or trade name beyond the territory in which plaintiff operates. 36 A.L.R. 922.

Tags, right of one first adopting idea of attaching tags to oyster shells to prevent competition from using such tags. 17 A.L.R. 773; 30 A.L.R. 615; 5 A.L.R. Fed. 625.

Taxicab or other vehicle, right to protection against simulation of physical appearance or arrangement of. 17 A.L.R. 784; 28 A.L.R. 114.

Television trade-mark. 15 A.L.R.2d 792.

Trademark licensor’s liability for injury or death allegedly due to defect in licensed product. 90 A.L.R.4th 981.

Unfair competition and simulation or infringement of trade names in radio broadcasting. 124 A.L.R. 996; 171 A.L.R. 776.

When does product become generic term so as to warrant cancellation of registration of mark, pursuant to § 14 of Lanham Act (15 U.S.C.A. § 1064). 156 A.L.R. Fed. 131.

6-2-2. Application for registration.

  1. Subject to the limitations stated in this chapter, any person who adopts and uses a mark may file in the office of the secretary of state, on a form to be furnished by him or her, an application for registration of that mark stating, but not limited to, the following information:
    1. The name and business address of the person applying for the registration, and, if a business corporation, non-profit corporation, limited liability partnership, limited partnership, or limited liability company, the state of incorporation or formation, as applicable;
    2. The goods or services in connection with which the mark is used and the mode or manner in which the mark is used in connection with the goods or services, and the class in which the goods or services fall;
    3. The date when the mark was first used anywhere and the date when it was first used in the state by the applicant or his or her predecessor in business; and
    4. A statement that the applicant is the owner of the mark and that no other person has the right to use the mark in the state, either in the identical form of the mark or in such near resemblance to it as might be calculated to deceive or to be mistaken for it.
  2. The application shall be signed and verified by the applicant or by a member of the firm or an officer of the business corporation non-profit corporation; authorized partner of the limited liability partnership; general partner of the limited partnership; authorized person of the limited liability company; or association applying for registration.
  3. The application shall be accompanied by a specimen or facsimile of the mark in triplicate.
  4. The application for registration shall be accompanied by a filing fee of fifty dollars ($50.00), payable to the secretary of state.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 1990, ch. 65, art. 43, § 1; P.L. 2007, ch. 394, § 1; P.L. 2007, ch. 486, § 1; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-2-3. Registrability.

No person may register a mark if it:

  1. Consists of or comprises immoral, deceptive, or scandalous matter;
  2. Consists of or comprises matter that may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;
  3. Consists of or comprises the flag or coat of arms or other insignia of the United States, or of any state or municipality, or of any foreign nation or any simulation thereof;
  4. Consists of or comprises the name, signature, or portrait of any living individual, except with his or her written consent;
  5. When applied to the goods or services of the applicant is merely descriptive or deceptively misdescriptive of them; or when applied to the goods or services of the applicant is primarily geographically descriptive or deceptively misdescriptive of them; or is primarily merely a surname. Provided, however, that nothing in this subdivision shall prevent the registration of a mark used in the state by the applicant that has become distinctive of the applicant’s goods or services. The secretary of state may accept as evidence that the mark has become distinctive, as applied to the applicant’s goods or services, proof of continuous use as a mark by the applicant in the state or elsewhere for the five (5) years next preceding the date of the filing of the application for registration; or
  6. So resembles a mark registered in the state or a mark or trade name previously used in the state by another and not abandoned, as to be likely, when applied to the goods or services of the applicant, to cause confusion or mistake or to deceive.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Construction and application of trademark registration prohibition on disparaging marks under 15 U.S.C. § 1052(a). 15 A.L.R. Fed. 3d Art. 8 (2016).

Reverse confusion doctrine under state trademark law. 114 A.L.R.5th 129.

Reverse confusion doctrine under Lanham Trademark Act. 187 A.L.R. Fed. 271.

6-2-4. Certificate of registration.

  1. Upon compliance by the applicant with the requirements of this chapter, the secretary of state shall cause a certificate of registration to be issued and delivered to the applicant.
  2. The certificate of registration shall be issued under the signature of the secretary of state and the seal of the state and it shall show the name and business address and, if a business corporation, non-profit corporation, limited liability partnership, limited partnership or limited liability company, the state of incorporation, or formation, as applicable, of the person claiming ownership of the mark; the date claimed for the first use of the mark anywhere and the date claimed for the first use of the mark in the state; the class of goods or services and a description of the goods or services on which the mark is used; a reproduction of the mark; the registration date; and the term of the registration.
  3. Any certificate of registration issued by the secretary of state under the provisions of this section, or a copy of a certificate of registration duly certified by the secretary, shall be admissible in evidence as competent and sufficient proof of the registration of the mark in any action or judicial proceedings in any court of the state.
  4. Registration of or renewal of a mark provided by this chapter shall be constructive notice of the registrant’s claim of ownership and shall, when introduced in any action, be prima facie evidence of the registrant’s exclusive right to use the registered mark in this state on goods or services specified in the registration subject to any conditions or limitations stated in the registration, but shall not preclude an opposing party from proving any legal or equitable defense or defect that might have been asserted if the mark had not been registered.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2007, ch. 394, § 1; P.L. 2007, ch. 486, § 1; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Duties of secretary of state, § 42-8-1 .

NOTES TO DECISIONS

Federal Law.

In a case involving an infringement upon a registered trademark, the court properly awarded an accounting of profits, even though the trademark owner did not give the notice of registration required under federal law, because, under Rhode Island law, registration of a mark is itself constructive notice of the registrant’s claim of ownership. Schroeder v. Lotito, 474 F.2d 801 (1st Cir. 1984).

6-2-5. Duration and renewal.

  1. Registration of a mark under this chapter shall be effective for a term of ten (10) years from the date of registration and, upon application filed within six (6) months prior to the expiration of the term on a form to be furnished by the secretary of state, the registration may be renewed for a like term. A renewal fee of fifty dollars ($50.00), payable to the secretary of state, shall accompany the application for renewal of the registration.
  2. A mark registration may be renewed for successive periods of ten (10) years in like manner.
  3. The secretary of state shall notify registrants of marks under this chapter of the necessity of renewal within the year next preceding the expiration of the ten (10) years from the date of registration by writing to the last known address of the registrants.
  4. All applications for renewals under this chapter, whether of registrations made under this chapter or of registrations effected under any prior law, shall include a statement that the mark is still in use in the state.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 1990, ch. 65, art. 43, § 1; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-2-6. Assignment.

Any mark and its registration under this chapter shall be assignable with the good will of the business in which the mark is used or with that part of the good will of the business connected with the use of and symbolized by the mark. Assignment shall be by instruments in writing duly executed and may be recorded with the secretary of state upon the payment of a fee of twenty dollars ($20.00) payable to the secretary of state, who, upon recording of the assignment, shall issue in the name of the assignee a new certificate for the remainder of the term of the registration or of its last renewal. An assignment of any registration shall be void as against any subsequent purchaser for valuable consideration without notice, unless it is recorded with the secretary of state within three (3) months after the date of assignment or prior to any subsequent purchase.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-2-7. Records.

The secretary of state shall keep for public examination a record of all marks registered or renewed under this chapter.

History of Section. P.L. 1975, ch. 89, § 2.

6-2-8. Cancellation.

The secretary of state shall cancel:

  1. Any registration that the secretary of state shall receive concerning a voluntary request for cancellation from the registrant or the assignee of record;
  2. Any registration granted and not renewed in accordance with the provision of this chapter;
  3. Any registration that the superior court shall find:
    1. That the registered mark has been abandoned;
    2. That the registrant is not the owner of the mark;
    3. That the registration was improperly granted;
    4. That the registration was fraudulently obtained; or
    5. That the registered mark is so similar, as to be likely to cause confusion or mistake or to deceive, to a mark registered by another person in the United States patent office, prior to the date of the filing of the application for registration by the registrant under this chapter, and not abandoned; provided, however, that should the registrant prove that he or she is the owner of a concurrent registration of his or her mark in the United States patent office covering an area including the state, the registration under this chapter shall not be cancelled;
  4. Any registration ordered cancelled by the superior court.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Reverse confusion doctrine under Lanham Trademark Act. 187 A.L.R. Fed. 271.

Reverse confusion doctrine under state trademark law. 114 A.L.R.5th 129.

When does product become generic term so as to warrant cancellation of registration of mark, pursuant to § 14 of Lanham Act (15 U.S.C.A. § 1064). 156 A.L.R. Fed. 131.

6-2-9. Classification.

The secretary of state shall promulgate rules and regulations for the determination of classes of goods and services for the convenience of the administration of this chapter.

History of Section. P.L. 1975, ch. 89, § 2.

Cross References.

Duties of secretary of state, § 42-8-1 .

6-2-10. Fraudulent registration.

Any person who shall for him or herself, or on behalf of any other person, procure the filing or registration of any mark in the office of the secretary of state by knowingly making any false or fraudulent representation or declaration, verbally or in writing, or by any other fraudulent means, shall be liable to pay all damages sustained in consequence of the filing or registration, to be recovered by or on behalf of the party injured thereby in any court of competent jurisdiction.

History of Section. P.L. 1975, ch. 89, § 2.

6-2-11. Infringement.

Subject to the provisions of § 6-2-14 , any person who shall:

  1. Use, without consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of a mark registered under this chapter in connection with the sale, offering for sale, or advertising of any goods or services on or in connection with which the use is likely to cause confusion or mistake or to deceive as to the source of origin of the goods or services; or
  2. Reproduce, counterfeit, copy, or colorably imitate any mark and apply the reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in conjunction with the sale or other distribution in the state of the goods or services; shall be liable to a civil action by the owner of the registered mark for any or all of the remedies provided in § 6-2-13 , except that under this section the registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that the mark is intended to be used to cause confusion or mistake or to deceive.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Injunction.

A nonunion shop’s use of a mark confusingly similar to a “union bug,” a mark placed on commercially-printed materials to designate and distinguish work as having been produced by union labor, constituted infringement subject to permanent injunction. Schroeder v. Lotito, 577 F. Supp. 708, 1983 U.S. Dist. LEXIS 10371 (D.R.I. 1983), aff'd, 747 F.2d 801, 1984 U.S. App. LEXIS 17098 (1st Cir. 1984).

Collateral References.

Admissibility and weight of consumer survey in litigation under trademark opposition, trademark infringement, and false designation of origin provisions of Lanham Act (15 USCS §§ 1063, 1114, and 1125). 98 A.L.R. Fed. 20.

Application of doctrine of “reverse passing off” under Lanham Act. 194 A.L.R. Fed. 175.

Initial interest confusion doctrine under Lanham Trademark Act. 183 A.L.R. Fed. 553.

Lanham Act trademark infringement actions in internet and website context. 197 A.L.R. Fed. 17.

Liability as vicarious or contributory infringer under Lanham Act — Modern cases. 152 A.L.R. Fed. 573.

Parody as trademark or tradename infringement. 92 A.L.R. Fed. 25.

Parody as trademark or tradename dilution or infringement. 179 A.L.R. Fed. 181.

“Post-sale confusion” in trademark or trade dress infringement actions under § 43 of the Lanham Trademark Act (15 USCA § 1125). 145 A.L.R. Fed. 407.

What constitutes “famous mark” for purposes of federal Trademark Dilution Act, 15 U.S.C. § 1125(c), which provides remedies for dilution of famous marks. 165 A.L.R. Fed. 625.

When is trade dress “inherently distinctive” for purposes of trade dress infringement actions under § 43(a) of Lanham Act (15 U.S.C.A. § 1125(a)) — Cases after Two Pesos. 161 A.L.R. Fed. 327.

World wide web domain as violating state trademark protection statute or state Unfair Trade Practices Act. 96 A.L.R.5th 1.

6-2-12. Injury to business reputation — Dilution.

Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark registered under this chapter or a mark valid at common law or a trade name valid at common law shall be a ground for injunctive relief notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Confusion.

Where a trademark holder and the competitor directly competed in the market for worker’s compensation insurance, the holder was not required to show direct evidence of economic loss where a factfinder could infer commercial injury from the confusion. Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d 8, 2004 U.S. App. LEXIS 14256 (1st Cir. 2004).

6-2-13. Remedies.

Any owner of a mark registered under this chapter may proceed by suit to enjoin the manufacture, use, display, or sale of any counterfeits or imitations, and the superior court may grant injunctions to restrain the manufacture, use, display, or sale as may be deemed just and reasonable by the court and may require the defendants to pay to the owner all profits derived from and all damages suffered by reason of the wrongful manufacture, use, display, or sale; and the court may also order that any counterfeits or imitations in the possession or under the control of any defendant in the case be delivered to an officer of the court, or to the complainant, to be destroyed.

History of Section. P.L. 1975, ch. 89, § 2; P.L. 2014, ch. 528, § 4.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Award of Damages or Profits Under § 35(a) of Lanham Act (15 U.S.C. § 1117(a)) for False Designation of Origin and False Descriptions (15 U.S.C. § 1125(a)). 31 A.L.R. Fed. 3d Art. 13 (2018).

6-2-14. Common law rights.

Nothing in this chapter shall adversely affect the rights or the enforcement of the rights in marks acquired in good faith at any time in common law.

History of Section. P.L. 1975, ch. 89, § 2.

6-2-15. Severability.

If any provision of any section of this chapter shall be held invalid, the remainder of the sections and the application of the provisions to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.

History of Section. P.L. 1975, ch. 89, § 2.

6-2-16. Termination of prior registrations — Notice.

Any registration of trademarks in force on October 1, 1975 shall expire ten (10) years from the date of the registration or one year after October 1, 1975, whichever is later, and may be renewed by filing an application with the secretary of state on a form furnished by the secretary and paying the renewal fee within six (6) months prior to the expiration of the registration.

History of Section. P.L. 1975, ch. 89, § 3; P.L. 2001, ch. 86, § 17.

Chapters 3 - 8 Sale of Goods. Repealed

Chs. 3 - 8. SALE OF GOODS. REPEALED.

Repealed Sections.

These chapters (P.L. 1908, ch. 1548, §§ 1-76; G.L. 1909, chs. 261-266; G.L. 1923, chs. 305-310; G.L. 1938, chs. 459-464; G.L. 1956, §§ 6-3-1 — 6-8-6) were repealed by P.L. 1960, ch. 147, § 2. For present provisions of law, see Uniform Commercial Code, § 6A-2-101 et seq.

Chapter 9 Sale of Oils [Repealed.]

6-9-1. Repealed.

History of Section. G.L. 1896, ch. 143, § 1; G.L. 1909, ch. 169, § 1; G.L. 1923, ch. 199, § 1; G.L. 1938, ch. 381, § 1; G.L. 1956, § 6-9-1 ; Repealed by P.L. 2014, ch. 528, § 5, effective December 31, 2014.

Compiler’s Notes.

Former § 6-9-1 concerned “Spermaceti oil”.

6-9-2. Repealed.

History of Section. G.L. 1896, ch. 143, § 2; G.L. 1909, ch. 169, § 2; G.L. 1923, ch. 199, § 2; G.L. 1938, ch. 381, § 2; G.L. 1956, § 6-9-2 ; Repealed by P.L. 2014, ch. 528, § 5, effective December 31, 2014.

Compiler’s Notes.

Former § 6-9-2 concerned liability for sale of adulterated oil for spermaceti.

6-9-3. Repealed.

History of Section. G.L. 1896, ch. 143, § 3; G.L. 1909, ch. 169, § 3; G.L. 1923, ch. 199, § 3; G.L. 1938, ch. 381, § 3; G.L. 1956, § 6-9-3 ; Repealed by P.L. 2014, ch. 528, § 5, effective December 31, 2014.

Compiler’s Notes.

Former § 6-9-3 concerned forfeiture for sale of adulterated oil without disclosure.

6-9-4. Repealed.

History of Section. G.L. 1896, ch. 143, § 4; G.L. 1909, ch. 169, § 4; G.L. 1923, ch. 199, § 4; G.L. 1938, ch. 381, § 4; G.L. 1956, § 6-9-4 ; Repealed by P.L. 2014, ch. 528, § 5, effective December 31, 2014.

Compiler’s Notes.

Former § 6-9-4 concerned liability for undisclosed sale of tight-pressed oil.

Chapter 10 Labeling of Thread

6-10-1. Labeling as to weight or length required.

It shall be unlawful to keep for the purpose of sale, offer or expose for sale, or sell any sewing, basting, mending, darning, crochet, tatting, handknitting, or embroidery thread, put up or packaged in advance of sale on spools, tubes, cones, bobbins, or in balls, skeins, or other similar forms referred to in this chapter as units, for either wholesale or retail sale, unless each of the units is definitely, plainly, and conspicuously marked to show the net weight in terms of avoirdupois pounds and ounces, or the length in yards of the thread, subject, however, to all of the following provisions of this chapter.

History of Section. G.L. 1896, ch. 141, § 1; G.L. 1909, ch. 167, § 1; G.L. 1923, ch. 197, § 1; G.L. 1938, ch. 387, § 1; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-1 .

Comparative Legislation.

Labeling thread:

Conn. Gen. Stat. § 43-45.

Mass. Ann. Laws ch. 94, § 285 et seq.

6-10-2. Length of small units to be shown — Bobbins — Packages for household use.

When the net weight of the thread in or on any unit is less than two (2) ounces avoirdupois, the unit shall be marked to show the length of the thread in yards as unwound from the unit. Ready-wound bobbins that are not sold separately shall not be required to be individually marked, but the package containing the bobbins shall be marked to show the number of bobbins contained in the package and the net weight or measure of the thread on each bobbin. Any retail unit of thread, sold only for household use, consisting of a package containing two (2) or more similar individual units, that are not sold separately, shall be marked to show the number of individual units in the package and the net weight or measure of the thread in each individual unit, but this provision shall not apply where the individual units are separately marked.

History of Section. G.L. 1938, ch. 387, § 2; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-2 ; P.L. 2014, ch. 528, § 6.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-10-3. Identification of manufacturer or distributor.

The marking required by this chapter shall in all cases be in combination with the name and place of business of the manufacturer or distributor of the thread, or a trademark, symbol, brand, or other mark that positively identifies the manufacturer or distributor and which shall be filed with the state sealer of weights and measures in the state department of labor and training.

History of Section. G.L. 1938, ch. 387, § 3; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-3 ; P.L. 2014, ch. 528, § 6.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-10-4. Determination of net content.

The net content of any unit of thread shall be determined by ascertaining the average net weight or yardage of not less than ten (10) units of thread of the same type and put-up, selected at random from the units kept for the purpose of sale, sold, exposed, or offered for sale. That average shall not be less by more than three percent (3%) than the weight or yardage marked on the units or the package containing the units.

History of Section. G.L. 1938, ch. 387, § 4; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-4 .

6-10-5. Enforcement of chapter.

The state sealer of weights and measures in the state department of labor and training shall enforce and administer the provisions of this chapter. All actions, suits, complaints, and prosecutions for the violation of any of the provisions of this chapter shall be brought by and in the name of the state sealer of weights and measures, or by and in the name of the state director of labor and training or his or her duly authorized representative.

History of Section. G.L. 1938, ch. 387, § 5; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-5 .

6-10-6. Penalty for violations.

Any person, firm, or corporation who willfully violates any of the provisions of this chapter shall be guilty of a misdemeanor and shall upon conviction be punished by a fine of not more than fifty dollars ($50.00) for each separate offense.

History of Section. G.L. 1896, ch. 141, § 2; G.L. 1909, ch. 167, § 2; G.L. 1923, ch. 197, § 2; G.L. 1938, ch. 387, § 2; G.L., ch. 387, § 6; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-6 ; P.L. 2001, ch. 86, § 18; P.L. 2014, ch. 528, § 6.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-10-7. Wool products exempt.

The provisions of this chapter shall not apply to wool or to textile products made in whole or in part of wool.

History of Section. G.L. 1938, ch. 387, § 7; P.L. 1952, ch. 3009, § 1; G.L. 1956, § 6-10-7 .

Chapter 11 Gold and Silver Products

6-11-1. Mislabeling of gold products as to fineness — Brazing or uniting alloys.

  1. Any person, firm, corporation, or association who or which makes for sale or sells, or offers to sell or dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or in part of gold or any alloy of gold, and having stamped, branded, engraved, or imprinted upon any part the article, or upon any tag, card, or label attached to the article, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, any mark indicating, or designed or intended to indicate, that the gold or alloy of gold in the article is of a greater degree of fineness than the actual fineness or quality of the gold or alloy, unless the actual fineness of the gold or alloy, in the case of flatware and watch cases, not less by more than three one-thousandths (3/1000) parts, and in the case of all other articles, not less by more than one-half (1/2) karat, than the fineness indicated by the mark stamped, branded, engraved, or imprinted upon any part of the article, or upon any tag, card, or label attached to the article, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, according to the standards and subject to the qualifications prescribed by this chapter, is guilty of a misdemeanor.
  2. In any test for the ascertainment of the fineness of the gold or its alloy in any article, according to the tests and standards prescribed in this section, the part of the gold or of its alloy taken for the test, analysis, or assay shall be a part or portion that does not contain or have attached to it any solder or alloy of inferior fineness used for brazing or uniting the parts of the article; provided, in addition to the previously mentioned tests and standards, that the actual fineness of the entire quantity of gold and of its alloys contained in any article mentioned in this section (except watch cases and flatware), including all solder or alloy of inferior metal used for brazing or uniting the parts of the article (all gold, alloys, and solder being assayed as one piece), shall not be less by more than one karat than the fineness indicated by the mark stamped, branded, engraved, or imprinted upon the article, or upon any tag, card, or label attached to the article, or upon any box, package, cover, or wrapper in which the article is encased or enclosed.

History of Section. P.L. 1907, ch. 1454, § 1; G.L. 1909, ch. 199, § 1; G.L. 1923, ch. 226, § 1; G.L. 1938, ch. 399, § 1; G.L. 1956, § 6-11-1 .

Cross References.

Forgery or counterfeiting of coins, penalties, § 11-17-7 et seq.

License for hawkers and peddlers, § 5-11-1.1 et seq.

Purchase and handling of precious metals by pawnbrokers, § 19-26-9 .

Comparative Legislation.

Gold and silver products:

Conn. Gen. Stat. § 53-324 et seq.

Mass. Ann. Laws ch. 266, §§ 77, 78.

6-11-2. Labeling of gold plate, filled, and rolled products.

Any person, firm, corporation, or association who or that makes for sale or sells, or offers to sell or dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or in part of inferior metal having deposited or plated on the article or brazed or otherwise affixed to it a plate, plating, covering, or sheet of gold or of any alloy of gold, and the article is known in the market as “rolled gold plate”, “gold plate”, “gold filled”, or “gold electroplate”, or by any similar designation, and having stamped, branded, engraved, or imprinted upon any part of the article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, any word or mark usually employed to indicate the fineness of gold, unless that word is accompanied by other words plainly indicating that the article or some part of the article is made of rolled gold plate, or gold plate or gold electroplate, or is gold filled, as the case may be, is guilty of a misdemeanor.

History of Section. P.L. 1907, ch. 1454, § 3; G.L. 1909, ch. 199, § 6; G.L. 1923, ch. 226, § 6; G.L. 1938, ch. 399, § 6; G.L. 1956, § 6-11-2 ; P.L. 2014, ch. 528, § 7.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11-3. Sterling silver.

Any person, firm, corporation, or association who or that makes for sale or sells, or offers to sell or dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or in part of silver or of any alloy of silver, and having marked, stamped, branded, engraved, or imprinted upon any part of the article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, the words “sterling silver” or “sterling,” or any colorable imitation thereof, unless nine hundred twenty-five one-thousandths (925/1000) of the component parts of the metal appearing or purporting to be silver of which the article is manufactured are pure silver, subject to the qualifications prescribed by this chapter, is guilty of a misdemeanor; provided, that in the case of all articles, there shall be allowed a divergence in fineness of four one-thousandths (4/1000) parts from the previously mentioned standard.

History of Section. P.L. 1907, ch. 1454, § 2; G.L. 1909, ch. 199, § 2; G.L. 1923, ch. 226, § 2; G.L. 1938, ch. 399, § 2; G.L. 1956, § 6-11-3 ; P.L. 2014, ch. 528, § 7.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11-4. Coin silver.

Any person, firm, corporation, or association who or that makes for sale or sells, or offers to sell, or dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or in part of silver or of any alloy of silver, and having marked, stamped, branded, engraved, or imprinted upon any part of the article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, the words “coin” or “coin silver,” or any colorable imitation thereof, unless nine hundred one-thousandths (900/1000) of the component parts of the metal appearing or purporting to be silver of which the article is manufactured are pure silver, subject to the qualifications prescribed by this chapter, is guilty of a misdemeanor; provided, that in the case of all articles, there shall be allowed a divergence in fineness of four one-thousands (4/1000) parts from the previously mentioned standards.

History of Section. P.L. 1907, ch. 1454, § 2; G.L. 1909, ch. 199, § 3; G.L. 1923, ch. 226, § 3; G.L. 1938, ch. 399, § 3; G.L. 1956, § 6-11-4 ; P.L. 2014, ch. 528, § 7.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11-5. Labeling as to fineness of silver products.

Any person, firm, corporation, or association who or that makes for sale or sells, or offers to sell, or dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or in part of silver or of any alloy of silver, and having stamped, branded, engraved, or imprinted upon any part of the article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, any mark or word (other than the word “sterling” or the word “coin”) indicating, or designed or intended to indicate, that the silver or alloy of silver in the article is of greater degree of fineness than the actual fineness or quality of the silver or alloy, unless the actual fineness of the silver or alloy of silver of which the article is composed is not less by more than four one-thousandths (4/1000) parts than the actual fineness indicated by the mark or word (other than the word “sterling” or “coin”) stamped, branded, engraved, or imprinted upon any part of the article or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, subject to the qualifications prescribed in this chapter, is guilty of a misdemeanor.

History of Section. P.L. 1907, ch. 1454, § 2; G.L. 1909, ch. 199, § 4; G.L. 1923, ch. 226, § 4; G.L. 1938, ch. 399, § 4; G.L. 1956, § 6-11-5 ; P.L. 2014, ch. 528, § 7.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11-6. Testing of silver products — Brazing and uniting alloys.

In any test for the ascertainment of the fineness of any article mentioned in §§ 6-11-3 6-11-5 according to the previously mentioned standards, the part of the article taken for the test, analysis, or assay shall be a part or portion that does not contain or have attached to it any solder or alloy of inferior metal used for brazing or uniting the parts of the article; provided, that in addition to the previously mentioned test and standards, the actual fineness of the entire quantity of metal purporting to be silver contained in any article mentioned in §§ 6-11-3 6-11-5 including all solder or alloy of inferior fineness used for brazing or uniting the parts of any article (all silver, alloy, or solder being assayed as one piece), shall not be less by more than ten one-thousandths (10/1000) parts than the fineness indicated, according to the previously mentioned standards, by the mark stamped, branded, engraved, or imprinted upon the article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed.

History of Section. P.L. 1907, ch. 1454, § 2; G.L. 1909, ch. 199, § 5; G.L. 1923, ch. 226, § 5; G.L. 1938, ch. 399, § 5; G.L. 1956, § 6-11-6 .

6-11-7. Labeling of silver plated products as sterling or coin silver.

Any person, firm, corporation, or association who or that makes for sale or sells, or offers to sell or dispose of, or has in his, her, or its possession with intent to sell or dispose of, any article of merchandise made in whole or in part of inferior metal having deposited or plated on it or brazed or otherwise affixed to it a plate, plating, covering, or sheet of silver or of any alloy of silver, and which article is known in the market as “silver plate” or “silver electroplate”, or by any similar designation, and having stamped, branded, engraved, or imprinted upon any part of the article, or upon any tag, card, or label attached to it, or upon any box, package, cover, or wrapper in which the article is encased or enclosed, the word, “sterling” or the word “coin”, either alone or in conjunction with any other words or marks, is guilty of a misdemeanor.

History of Section. P.L. 1907, ch. 1454, § 4; G.L. 1909, ch. 199, § 7; G.L. 1923, ch. 226, § 7; G.L. 1938, ch. 399, § 7; G.L. 1956, § 6-11-7 ; P.L. 2014, ch. 528, § 7.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11-8. Penalty for violations — Previously manufactured articles.

Every person, firm, corporation, or association guilty of a violation of any one of §§ 6-11-1 6-11-7 and every officer, manager, director, or managing agent of any person, firm, corporation, or association directly participating in the violation or consenting to it, shall be punished by a fine of not more than five hundred dollars ($500) or imprisonment for not more than three (3) months, or both, at the discretion of the court; provided, that if the person charged with violation of this chapter shall prove that the article concerning which the charge is made was manufactured prior to the thirteenth day of June, 1907, then the charge shall be dismissed.

History of Section. P.L. 1907, ch. 1454, § 5; G.L. 1909, ch. 199, § 8; G.L. 1923, ch. 226, § 8; G.L. 1938, ch. 399, § 8; G.L. 1956, § 6-11-8 .

Chapter 11.1 Purchase and Sale of Precious Metals

6-11.1-1. License required — “Person” defined.

  1. No person, including a pawnbroker, consignment shop, or salvage yard operator or second-hand dealer, as defined in § 5-21-1 , shall engage in the business of buying or receiving for the purpose of selling: gold, silver, platinum group metals, or precious stones, or any articles containing those items, including catalytic converters, other than coins purchased for their numismatic value rather than their metal content, referred to in this chapter as “precious metals”, from the general public for the purpose of reselling the precious metals in any condition without first obtaining a license from the attorney general of the state of Rhode Island, also called “the attorney general” in this chapter. The attorney general shall not issue any license to a person who has not registered a permanent place of business within the state for the purchase or sale of precious metals. The criteria for determining a person’s permanent place of business shall be formulated by the attorney general immediately on or after July 1, 1981.
  2. The word “person,” when used in this chapter, shall include individuals, partnerships, associations, and corporations.
  3. This chapter shall not apply to any financial institution that is covered by federal or state deposit insurance, nor to jewelry and silverware manufacturers purchasing precious metals directly from trade suppliers.
  4. The word “catalytic converter” when used in this chapter shall be defined as an air pollution abatement device that removes pollutants from motor vehicle exhaust, either by oxidizing them into carbon dioxide and water or reducing them to nitrogen.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 1981, ch. 294, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2006, ch. 109, § 1; P.L. 2006, ch. 139, § 1; P.L. 2007, ch. 43, § 1; P.L. 2007, ch. 47, § 1; P.L. 2007, ch. 376, § 1; P.L. 2008, ch. 349, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Comparative Legislation.

Purchase and sale of precious metals:

Conn. Gen. Stat. § 53-324 et seq.

Mass. Ann. Laws ch. 266, §§ 77, 78.

6-11.1-2. Application for license — Annual fee — Attorney general to promulgate rules and regulations.

  1. Application for the license shall be in writing, under oath, and in the form prescribed by the attorney general and shall contain the name and the address (both of the residence and place of business) of the applicant, and if the applicant is a partnership or association, of every member, and if a corporation, of each officer and director and of the principal owner or owners of the issued and outstanding capital stock; also the city or town with the street and number where the business is to be conducted and any further information that the attorney general may require.
  2. After receipt of an application for a license, the attorney general shall conduct an investigation to determine whether the facts presented in the application are true. The attorney general may also request a record search and a report from the National Crime and Information Center (NCIC) of the Federal Bureau of Investigation. If the application discloses that the applicant has a disqualifying criminal record, or if the investigation indicates that any of the facts presented in the application are not true; or if the records of the department of the attorney general indicate criminal activity on the part of the person signing the application and any other persons named in the application; or if the NCIC report indicates an outstanding warrant for the person signing the application and any other persons named in the application; then the attorney general may initiate a nationwide criminal records check that shall include fingerprints submitted to the Federal Bureau of Investigation regarding the person signing the application and any other persons named in the application. Upon the annual renewal of a license or the opening of a new branch designated in the license, the attorney general may initiate a nationwide criminal records check that shall include fingerprints submitted to the Federal Bureau of Investigation regarding the licensee and any other persons named in the license. The individual who is subject to the national records check shall be responsible for the cost of conducting such check.
  3. The applicant at the time of making his or her initial application only shall pay to the attorney general the sum of fifty dollars ($50.00) as a fee for investigating the application and the additional sum of fifty dollars ($50.00) shall be paid annually. The licensee shall pay an additional fifty dollars ($50.00) annually for each branch designated in the license. Licenses shall not be assignable or transferable to any other person or entity.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 1985, ch. 474, § 1; P.L. 1986, ch. 201, § 1; P.L. 1996, ch. 166, § 1; P.L. 1996, ch. 201, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2013, ch. 502, § 1; P.L. 2013, ch. 507, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-3. Identification and authority of seller — Posting of prices — Weighing.

  1. Every person required to be licensed under this chapter shall require positive proof of identification with photograph, date of birth, and current address of every seller from whom precious metals or an article made from or containing a precious metal is to be purchased and shall require the seller to sign a statement on a form to be approved by the attorney general stating that the seller is the legal owner of the property or is the agent of the owner authorized to sell the property and when and where or in what manner the property was obtained.
  2. Every person required to be licensed under this chapter shall, before purchasing any precious metal or article made from or containing a precious metal, shall require the seller, if a minor, to be accompanied by the parent or legal guardian of the minor.
  3. Every person required to be licensed under this chapter shall post the prices per ounce that are currently being paid for precious metals in full sight of the prospective seller and the precious metals shall be weighed in full sight of the prospective seller.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 1981, ch. 294, § 1; P.L. 1996, ch. 166, § 1; P.L. 1996, ch. 201, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-4. Record of transactions required — Reports to police.

  1. Every person licensed under this chapter shall keep a copy of the report form obtained from or under the direction of the attorney general, containing a comprehensive record of all transactions concerning precious metals including catalytic converters. The comprehensive record shall be hand printed legibly or typed. The record shall include the name, address, telephone number and date of birth of the seller; a complete and accurate description of the property purchased or sold including any serial numbers or other identifying marks or symbols; and the date and hour of the transaction.
  2. All persons licensed under this chapter shall deliver or mail weekly to the chief of police of the city or town in which the business is located and electronically submit to the attorney general, in a manner specified by the attorney general, all report forms from the preceding seven-day (7) period.
  3. Every person licensed under this chapter shall retain a copy of the report form for a period of one year from the date of the sale stated on the form.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 1993, ch. 368, § 1; P.L. 1996, ch. 166, § 1; P.L. 1996, ch. 201, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2008, ch. 349, § 1; P.L. 2013, ch. 502, § 1; P.L. 2013, ch. 507, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-5. Fourteen-day holding period — Recovery of stolen property — Return to rightful owner.

  1. All persons licensed under this chapter shall retain in their possession in an unaltered condition for a period of fourteen (14) days all precious metals or articles made from or containing a precious metal including catalytic converters except items of bullion, including coins, bars, and medallions, that do not contain serial numbers or other identifying marks. The fourteen-day (14) holding period shall commence with the date the report of its acquisition was delivered to or received by the chief of police or the attorney general, whichever is later. The records so received by the chief of police and the attorney general shall be available for inspection only by law enforcement officers for law enforcement purposes. If the chief of police has probable cause that precious metals or an article made from or containing a precious metal has been stolen, he or she may give notice, in writing, to the person licensed, to retain the metal or article for an additional period of fifteen (15) days, and the person shall retain the property for this additional fifteen-day (15) period, unless the notice is recalled, in writing, within the fifteen-day (15) period. Within the fifteen-day (15) period the chief of police, or his or her designee, shall designate, in writing, an officer to secure the property alleged to be stolen and the persons in possession of the property shall deliver the property to the officer upon display of the officer’s written designation by the chief of police or his or her designee. Upon receipt of the property from the officer, the clerk or person in charge of the storage of alleged stolen property for a police department shall enter into a book a description of every article of property alleged to be stolen that was brought to the police department and shall attach a number to each article. The clerk or person in charge of the storage of alleged stolen property shall deliver the property to the owner of the property upon satisfactory proof of ownership, without any cost to the owner, provided that the following steps are followed:
    1. A complete photographic record of the property is made;
    2. A signed declaration of ownership under penalty of perjury is obtained from the person to whom the property is delivered;
    3. The person from whom the custody of the property was taken is served with written notice of the claim of ownership and is given ten (10) days from the mailing of the notice to file a petition in district court objecting to the delivery of the property to the person claiming ownership. If a petition is filed in a timely manner, the district court shall, at a hearing, determine by a preponderance of the evidence that the property was stolen and that the person claiming ownership of the property is the true owner. The decision of the district court may only be appealable by writ of certiorari to the supreme court.
  2. The clerk or person in charge of the storage of alleged stolen property shall not be liable for damages for any official act performed in good faith in the course of carrying out the provisions of this section. The photographic record of the alleged stolen property shall be allowed to be introduced as evidence in any court of this state in place of the actual alleged stolen property; provided that the clerk in charge of the storage of the alleged stolen property shall take photographs of the property and those photographs shall be tagged and marked and remain in his possession or control.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 1981, ch. 294, § 1; P.L. 1982, ch. 381, § 1; P.L. 1984, ch. 44, § 1; P.L. 1986, ch. 201, § 1; P.L. 1993, ch. 368, § 1; P.L. 1996, ch. 166, § 1; P.L. 1996, ch. 201, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2007, ch. 43, § 1; P.L. 2007, ch. 47, § 1; P.L. 2008, ch. 349, § 1; P.L. 2013, ch. 502, § 1; P.L. 2013, ch. 507, § 1; P.L. 2014, ch. 528, § 8.

Compiler’s Notes.

P.L. 1996, ch. 166, § 3 and P.L. 1996, ch. 201, § 3 each provides: “If any provision of this act or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the act, which can be given effect without the invalid provisions or application, and to this end the provisions are declared to be severable.”

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-6. Persons injured by violations of chapter — Damages and costs.

Any person who has been damaged or injured by the failure of a person required to be licensed under this chapter to comply with the provisions of this chapter may recover the actual damages sustained. The court, in its discretion may also award punitive damages and/or the costs of suit and reasonable attorneys’ fees to a prevailing plaintiff.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-7. Penalties.

  1. Every person who shall violate the provisions of this chapter shall be guilty of a misdemeanor and shall be fined not more than five hundred dollars ($500) or imprisoned for not more than one year, or both.
  2. If the value of the property involved in a transaction that is in violation of this chapter exceeds five hundred dollars ($500), a person convicted of a violation shall be fined not more than two thousand dollars ($2,000) or imprisoned for not more than three (3) years or both.
  3. The attorney general shall have the authority to suspend the license of any person required to be licensed under this chapter as a result of violations of this chapter or attorney general regulations leading to penalties under this chapter.

History of Section. P.L. 1980, ch. 399, § 1; P.L. 1981, ch. 294, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-8. Rules and regulations.

The attorney general is authorized to promulgate, adopt, and enforce any and all rules and regulations deemed necessary to carry out the duties and responsibilities of this chapter. Rules and regulations shall be adopted in accordance with the Administrative Procedure Act, chapter 35 of title 42.

History of Section. P.L. 1985, ch. 475, § 2; P.L. 2004, ch. 595, art. 26, § 1.

Transferred Sections.

The former section (P.L. 1981, ch. 294, § 2), concerning severability, was redesignated as § 6-11.1-14 by P.L. 1985, ch. 474, § 1.

6-11.1-9. Refusal to issue license.

The attorney general shall refuse to issue a license when the attorney general has found that the application for the license contains a false representation of a material fact; when investigation reveals that the person applying for the license has previously been guilty of a violation of this chapter or has been a partner of a partnership, member of an association, or an officer or director of a corporation that has previously been guilty of a violation of this chapter; or has a disqualifying criminal record as defined in § 6-11.1-13 . The attorney general may, in his or her discretion, issue a license if the disqualifying criminal record is more than ten (10) years old.

History of Section. P.L. 1985, ch. 474, § 2; P.L. 1986, ch. 201, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-10. Suspension, revocation, and nonrenewal of license.

The attorney general, upon his or her own motion or upon receipt of a signed, written complaint alleging violations of this chapter or of the rules and regulations promulgated pursuant to this chapter, may, after a hearing, suspend, revoke, or refuse to renew any license issued pursuant to this chapter.

History of Section. P.L. 1985, ch. 474, § 2; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-11. Hearings.

Hearings conducted pursuant to this chapter shall be in accordance with the Administrative Procedures Act, chapter 35 of title 42.

History of Section. P.L. 1985, ch. 474, § 2.

6-11.1-12. Appeals.

Appeals from a decision by the attorney general shall be made to the sixth division district court in Providence. Appeals from the decision of the sixth division district court shall be to the supreme court in accordance with the Administrative Procedures Act, chapter 35 of title 42, as amended.

History of Section. P.L. 1985, ch. 474, § 2; P.L. 2004, ch. 595, art. 26, § 1.

6-11.1-13. Disqualifying criminal records — Employees or agents of licensee.

A licensee convicted in a court of this state, a court of another state, or in a federal court, of a felony charge of forgery; embezzlement; obtaining money under false pretenses; bribery; larceny; extortion; conspiracy to defraud; receiving stolen goods; burglary; breaking and entering; or any similar offense or offenses; or tax evasion associated with the conduct of business under a license issued pursuant to this chapter; shall forfeit his or her license. Prior to forfeiture of the license, the licensee may request a hearing on the forfeiture. The attorney general, when so requested, shall hold a hearing. No licensee shall employ or engage any person as an employee or agent while engaging in the business of trading in precious metals who has been convicted of any of the offenses as they are described in this section and which shall be deemed to be a disqualifying criminal record.

History of Section. P.L. 1985, ch. 474, § 2; P.L. 1986, ch. 201, § 1; P.L. 1987, ch. 32, § 1; P.L. 2004, ch. 595, art. 26, § 1; P.L. 2014, ch. 528, § 8.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-11.1-14. Severability.

If any provision or phrase of this chapter or application of this chapter to any person or circumstances is held invalid, the invalidity shall not affect other provisions or phrases or applications of this chapter that can be given effect without the invalid provision or phrase or application, and to this end the provisions and phrases of this chapter are severable.

History of Section. P.L. 1981, ch. 294, § 2; G.L. 1956, § 6-11.1-8 ; as redesignated by P.L. 1985, ch. 474, § 1.

Chapter 11.2 Purchase and Sale of Regulated Metals

6-11.2-1. Short title.

This chapter shall be known and may be cited as the “Copper Theft Prevention Act.”

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-2. Definitions.

  1. “Electronic Reporting System” means an electronic process that records, reports, processes, stores and sends data and digital images of transactions in accordance with § 6-11.2-6 .
  2. The word “person(s),” when used in this chapter, shall include any individual(s), partnership(s), association(s), and corporation(s).
  3. “Public property” means property owned and maintained by a municipality, the state, the United States, or any quasi-governmental entity, and shall include, but not be limited to, items associated with public streets and sidewalks as follows:
    1. Manhole covers, or other types of utility access covers including, but not limited to, water maintenance covers;
    2. Highway and street signs;
    3. Street light poles and fixtures;
    4. Guardrails for bridges, highways, and roads;
    5. Historical, commemorative, and memorial markers and plaques; and
    6. Traffic directional and control signs and light signals.
  4. “Regulated metals property” means all ferrous and nonferrous metals, including, but not limited to, copper, copper alloy, bronze and aluminum, not including aluminum beverage containers.
  5. “Secondary metals recycler” means any person, firm or corporation in the state that is engaged, from a fixed location or otherwise, in the business of paying compensation for regulated metals that has served its original economic purposes, whether or not engaged in the business of performing the manufacturing process by which regulated metals are converted into raw materials products consisting of prepared grades and having an existing or potential economic value.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-3. License required.

  1. No person, including a secondary metals recycler, salvage yard operator or second hand dealer, shall engage in the business of purchasing, selling, bartering or dealing any regulated metals property or any articles containing those metals, from the general public for the purpose of reselling or recycling the regulated metals in any condition without first obtaining a license from the department of attorney general.
  2. This section shall not apply to the purchase of old metals from a person who is licensed to engage in the business of purchasing, selling, bartering or dealing in junk, old metals or secondhand articles, and who has previously recorded the contents of the load, pursuant to this section, and such person provides a written statement affirming such record at the time of the transaction.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-4. Application for license — Annual fee — Department of attorney general to promulgate rules and regulations.

  1. The application for the license pursuant to § 6-11.2-3 shall be in writing, under oath, and in the form prescribed by the department of attorney general. The application shall contain the following information:
    1. Full name, including middle name, any aliases, address of residence and the business, social security number and/or federal employer identification number of applicant and/or principals of any applicant corporation; and
    2. The city or town, and the street address where the business is to be conducted, and any further information that the department of attorney general may require.
  2. The applicant shall annually pay to the department of attorney general a license fee in the sum of seventy dollars ($70.00).
  3. The licensee shall not assign or transfer to any other person or entity its license issued pursuant to this chapter.
  4. Every licensee under this chapter shall display its license in a visible place at the licensee’s place of business.
  5. All licenses granted under the provisions of this chapter shall expire on the first day of January each year and no rebate shall be made from the license fee for such license for any license term less than one year.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-5. Identification of seller of goods.

  1. Every person licensed under this chapter shall require the seller of any goods or merchandise to present a valid motor vehicle operator’s license containing his or her photograph or other such suitable identification containing his or her photograph.
  2. The licensee shall maintain a record of the same, together with any other records required by law.
  3. Every seller shall sign a statement, on a form to be approved by the department of attorney general, stating that the seller is the legal owner of the property, or is the agent of the owner authorized to sell the property.
  4. Every person required to be licensed under this chapter shall, before purchasing any regulated metal or article made from or containing a regulated metal, require the seller, if a minor, to be accompanied by the parent or legal guardian of the minor.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-6. Payment.

Payment in full made for all material purchased pursuant to this chapter may be made by check, wire transfer, cash, or any other legal means.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-7. Record of transactions required — Reports to police.

  1. Every person licensed under this chapter shall keep a copy of the report form obtained from or under the direction of the department of attorney general, containing a comprehensive record of all transactions concerning regulated metals. The comprehensive record shall be hand printed legibly or typed. The licensee shall, upon request, send any records as defined in subsection (b) by hand delivery, mail or electronic submission, whenever applicable, to the chief of police of said requesting department.
  2. The record shall include the following information:
    1. Date of transactions;
    2. The name, address, telephone number, if available, and signature of the person from whom the old or used metals are purchased or received, as well as a photocopy or digital image of the person’s photo identification;
    3. The license plate number, state of issue, make and model, of the vehicle used to deliver the regulated metals to the secondary recycler, whenever applicable;
    4. The price paid for the old or used metals;
    5. A description of the regulated metals, or in the alternative a digital image of the transaction, in a manner approved by the attorney general; and
    6. Any further information that the department of attorney general may deem relevant to the specific requested transaction.
  3. Nothing in this section shall be construed as requiring additional recordkeeping for junked automobiles or automobile parts beyond what is otherwise required by law.
  4. Every person licensed under this chapter shall retain a copy of the report form for a period of two (2) years from the date of the sale stated on the form. These records are to be made available for inspection by any law enforcement agency requesting to review them. A secondary metals recycler is prohibited from releasing a customer’s information without the customer’s consent unless the disclosure is made in response to a request from a law enforcement agency.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-8. Holding period for property acquired by licensee.

  1. Every person licensed under this chapter shall keep, for a period of three (3) days, and shall immediately notify the police department of the following property purchased or received consisting of brass, bronze, copper, cast iron, stainless steel, and/or wrought iron:
    1. Statues and sculptures;
    2. Weathervanes;
    3. Downspouts;
    4. Handrails;
    5. Decorative fencing;
    6. Grave markers, sculptures, plaques and vases, the appearance of which suggest that the articles have been obtained from a cemetery; and
    7. Beer kegs.
  2. During said holding period, property shall be kept separate and distinct and shall not be disfigured or treated in any manner to alter or destroy its identity.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-9. Acquisition of public property.

  1. Every person licensed under this chapter shall not accept any public property as defined in this chapter, unless evidence of a valid contract with a government entity is provided at the time of the transaction.
  2. A licensee shall immediately notify the police department of any individual attempting to sell public property without authorization from a governmental entity.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-10. Persons injured by violations of chapter — Damages and costs.

Any person who has been damaged or injured by failure of a person required to be licensed under this chapter, to comply with the provisions of this chapter, may recover the actual value of the property involved in the transaction.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-11. Penalties.

  1. Every person who shall violate the provisions of this chapter shall be guilty of a misdemeanor and shall be fined not more than five hundred dollars ($500), or imprisoned for not more than one year, or both.
  2. If the value of the property involved in a transaction which is in violation of this chapter exceeds two hundred fifty dollars ($250), a person convicted of a violation shall be fined not more than one thousand dollars ($1,000) or both.
  3. The department of attorney general shall have the authority to suspend the license of any person required to be licensed under this chapter as a result of violations of this chapter regulations leading to penalties under this chapter.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-12. Rules and regulations.

The department of attorney general is authorized to adopt and enforce any regulations deemed necessary to carry out the duties and responsibilities of this chapter. Regulations shall be adopted in accordance with the “Administrative Procedures Act”, chapter 42-35.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-13. Refusal to issue license.

The department of attorney general shall refuse to issue a license when the department of attorney general has found that the application for the license contains a false representation of a material fact, when investigation reveals that the person applying for the license has previously been guilty of a violation of this chapter or has been a partner of a partnership, member of an association, or an officer, director or member of a corporation which has previously been guilty of a violation of this chapter.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-14. Suspension, revocation, and nonrenewal of license.

Upon determination by the attorney general of a valid written complaint, the attorney general may issue a final order suspending, revoking or refusing any license issued, pursuant to this chapter. Hearings conducted pursuant to this chapter shall be in accordance with the “Administrative Procedures Act” chapter 42-35.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-15. Appeals.

Appeals from a final order by the department of attorney general shall be made in accordance with the “Administrative Procedures Act”, chapter 42-35.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-16. Severability.

The provisions of this chapter are severable, and if any provision hereof shall be held invalid in any circumstances, any invalidity shall not affect any other provisions or circumstances. This chapter shall be construed in all respects so as to meet any constitutional requirements. In carrying out the purposes and provisions of this chapter, all steps shall be taken which are necessary to meet constitutional requirements.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

6-11.2-17. Preemption.

The provisions of this chapter shall not preempt any ordinance or regulation adopted by any town or city in accordance with chapter 5-21.

History of Section. P.L. 2013, ch. 189, § 1; P.L. 2013, ch. 239, § 1.

Chapter 12 Fair Trade Act [Repealed.]

6-12-1 — 6-12-8. Repealed.

History of Section. P.L. 1936, ch. 2427, §§ 1-7; P.L. 1938, ch. 2607, § 1; G.L. 1938, ch. 393, §§ 1-7; P.L. 1940, ch. 864, § 1; P.L. 1942, ch. 1227, § 1; G.L., ch. 393, § 5; P.L. 1942, ch. 1227, § 2; G.L. 1956, §§ 6-12-1 — 6-12-8; Repealed by P.L. 1970, ch. 79, § 1.

Compiler’s Notes.

Former chapter 12 containing §§ 6-12-1 — 6-12-8 concerned fair trade.

Chapter 13 Unfair Sales Practices

6-13-1. Definitions.

  1. “Cost to the retailer” means the invoice cost of the merchandise to the retailer within thirty (30) days prior to the date of the sale, or the replacement cost of the merchandise to the retailer within thirty (30) days prior to the date of the sale, in the quantity last purchased, whichever is lower; less all trade discounts except customary discounts for cash; to which shall be added:
    1. Freight charges not otherwise included in the cost of the merchandise;
    2. Cartage to the retail outlet if performed or paid for by the retailer, which cartage cost shall be deemed to be three-fourths of one percent (0.75%) of the cost of the merchandise to the retailer, unless the retailer claims and proves a lower cartage cost; and
    3. A markup to cover in part the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be six percent (6%) of the total cost at the retail outlet.
  2. “Cost to the wholesaler” means the invoice cost of the merchandise to the wholesaler within thirty (30) days prior to the date of the sale, or the replacement cost of the merchandise to the wholesaler within thirty (30) days prior to the date of the sale, in the quantity last purchased, whichever is lower; less all trade discounts except customary discounts for cash; to which shall be added:
    1. Freight charges not otherwise included in the cost of the merchandise;
    2. Cartage to the retail outlet if performed or paid for by the wholesaler, which cartage cost shall be deemed to be three-fourths of one percent (0.75%) of the cost of the merchandise to the wholesaler, unless the wholesaler claims and proves a lower cartage cost; and
    3. A markup to cover in part the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be two percent (2%) of the total cost at the wholesale establishment.
  3. Where two (2) or more items are advertised; offered for sale; or sold at a combined price; the price of each item shall be determined in the manner stated in subsections (a) and (b).
  4. “Sell at retail”, “sales at retail”, and “retail sale” mean and include any transfer of title to tangible personal property for a valuable consideration made in the ordinary course of trade or in the usual prosecution of the seller’s business to the purchaser for consumption or use other than resale or further processing or manufacturing. In this and in the preceding subsection the previous terms shall include any transfer of property where title is retained by the seller as security for the payment of the purchase price.
  5. “Retailer” means and includes every person, co-partnership, corporation, or association engaged in the business of making sales at retail within this state; provided, that, in the case of a retailer engaged in the business of making sales both at retail and at wholesale, the term shall be applied only to the retail portion of the business.
  6. “Wholesaler” means and includes every person, partnership, corporation, or association engaged in the business of making sales at wholesale within this state; provided, that, in the case of a wholesaler engaged in the business of making sales both at wholesale and at retail, the term shall be applied only to the wholesale portion of the business.
  7. Whenever any person, partnership, corporation, or association in the course of doing business performs the functions of both wholesaler and retailer without actually being engaged in the business of making sales at wholesale, the term “wholesaler” means and includes that function of the business of preparation for sale at the retail outlet, and the term “retailer” shall be applied only to the retail portion of the business.
  8. “Household” means and includes those who dwell under the same roof, house, or apartment.
  9. “Rebate” means a refund of a portion of the purchase price made to consumer to induce purchase of product.

History of Section. P.L. 1939, ch. 671, § 1; G.L. 1956, § 6-13-1 ; P.L. 1985, ch. 150, § 6; P.L. 2006, ch. 627, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Comparative Legislation.

Unfair sales:

Conn. Gen. Stat. § 42-111 et seq.

Mass. Ann. Laws ch. 93, § 14E et seq.

Collateral References.

Coverage of leases under state consumer protection statutes. 89 A.L.R.4th 854.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like. 41 A.L.R.4th 675.

6-13-2. Computation of cost of tobacco products.

For purposes of this chapter:

  1. The tax imposed by chapter 20 of title 44 shall be deemed to be a part of the original cost of cigarettes to the wholesaler;
  2. The invoice or replacement cost of cigarettes, cigars, smoking tobacco, chewing tobacco, snuff, and other tobacco products, to any wholesaler or retailer, shall be deemed to be the minimum price in this state at which the products may be purchased in this state by the wholesaler or retailer; and
  3. Merchandise given gratis to a wholesaler or to a retailer for display, advertising, or promotion purposes, or otherwise, shall not be considered in determining the cost of merchandise to the wholesaler or retailer, as the case may be.

History of Section. P.L. 1939, ch. 663, § 4; P.L. 1941, ch. 1039, § 1; G.L. 1956, § 6-13-2 ; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Preemption.

City’s Price and Flavor Ordinances on tobacco sales, regulating certain discounting and prohibiting certain flavored tobacco sales were not preempted by Rhode Island’s state law regulating tobacco sales, minimum pricing, and advertising, because the Rhode Island General Assembly had at no time disclosed, by implication or otherwise, its intent to occupy exclusively the field of regulating smoking. Nat'l Ass'n of Tobacco Outlets v. City of Providence, 731 F.3d 71, 2013 U.S. App. LEXIS 19928 (1st Cir. 2013).

6-13-2.1. Sales of milk.

  1. It shall be unlawful for any person, with intent to injure competitors or destroy competition, to sell within the state any milk or render any service in connection with the sale or distribution of milk at a price less than the cost of the milk or services, including, in the case of milk sold, the original purchase price, and in every instance all regular direct or indirect elements of cost, services, physical handling, and financial investment in the milk in question. No milk dealer shall, with this intent, use any method or device, either by discount or rebate; free service; advertising allowance; or by a combination price for the milk together with another commodity or service; that results in the total price of the milk and the other commodity or service being less than the aggregate of the prices for the milk and commodity or service when sold or offered for sale or performed separately or otherwise.
  2. Any person who shall violate the provisions of this section shall upon conviction be subject to the penalty provided in § 6-13-3 . The provisions of §§ 6-13-3 6-13-8 shall apply to milk in the same manner as if milk were “merchandise”.

History of Section. P.L. 1962, ch. 75, § 6; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-3. Penalty for advertising or sale to injure competitors or destroy competition.

Any retailer, who, with intent to injure competitors or destroy competition, advertises, offers to sell, or sells at retail any item of merchandise at less than cost to the retailer, or any wholesaler who, with intent as previously mentioned, advertises, offers to sell, or sells at wholesale any item of merchandise at less than cost to the wholesaler, shall, if the offender is an individual, be punished by a fine of not more than five hundred dollars ($500) or by imprisonment for not less than one month nor more than one year, or both; or, if the offender is a corporation, by a fine as previously mentioned. Notwithstanding the provisions of this section, as it pertains to a Class A or a Class B distributor of tobacco, any offense of this title shall be punished by a fine of not more than five thousand dollars ($5,000) for a first offense; a fine of not more than ten thousand dollars ($10,000) and a license suspension of not more than fourteen (14) calendar days for a second offense; and a fine of not more than twenty thousand dollars ($20,000) and a license suspension or revocation for a third offense.

History of Section. P.L. 1939, ch. 671, § 2; G.L. 1956, § 6-13-3 ; P.L. 2005, ch. 348, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Combinations to fix milk prices, § 4-8-16 .

NOTES TO DECISIONS

Constitutionality.

The limitation in this section of the acts prohibited to those done with intent to injure competitors or destroy competition makes this act a valid and reasonable exercise of the police power and it is not in violation of U.S. Const. Amend. 14. Avella v. Almac's, Inc., 100 R.I. 95 , 211 A.2d 665, 1965 R.I. LEXIS 357 (1965).

Collateral References.

Validity, construction, and application of state statutory provision prohibiting sales of commodities below cost — Modern cases. 41 A.L.R.4th 612.

6-13-4. Below-cost sales as evidence of intent.

Evidence of any advertisement; offer to sell; or sale of any item of merchandise by any retailer or wholesaler at less than cost to him or her, as defined in this chapter, shall be prima facie evidence of intent to injure competitors or destroy competition.

History of Section. P.L. 1939, ch. 671, § 2; G.L. 1956, § 6-13-4 ; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Constitutionality.

Whether or not this section violates the due process clause of U.S. Const. Amend. 14 in that it creates a presumption of guilt and deprives an accused person of the presumption of innocence will not be decided in an action for equitable relief only. Avella v. Almac's, Inc., 100 R.I. 95 , 211 A.2d 665, 1965 R.I. LEXIS 357 (1965).

Number of Sales.

The statute provides that any sale below costs with the intent to injure competitors or destroy competition shall be prima facie evidence of intent and while the number of sales and period of time over which they are made may have a bearing on the intent, a single or multiple sale constitutes, within the provisions of the statute, a single cause of complaint. Socony Mobile Oil Co. v. Superior Court, 97 R.I. 396 , 198 A.2d 44, 1964 R.I. LEXIS 94 (1964).

6-13-5. Sales exempt from chapter.

This chapter shall not apply with respect to advertising or offering to sell or selling, at retail or at wholesale, as the case may be, if done:

  1. In an isolated transaction and not in the usual course of business;
  2. Where merchandise is sold in bona fide clearance sales, if advertised or offered for sale as such or marked and sold as such, or where merchandise is marked down in an effort to sell the merchandise after bona fide efforts to sell the merchandise prior to the markdown;
  3. Where perishable merchandise must be sold promptly in order to forestall loss;
  4. Where merchandise is imperfect or damaged or its sale is being discontinued, if advertised or offered for sale as such or marked and sold as such;
  5. Where merchandise is advertised or offered for sale or sold upon the final liquidation of any business;
  6. Where merchandise is advertised or offered for sale or sold for charitable purposes or to relief agencies;
  7. Where merchandise is sold on contract to any department, board, or commission of this state, or of any of its political subdivisions, or to any institution maintained thereby; or
  8. Where merchandise is advertised or offered for sale or sold by any fiduciary or other officer acting under the order or direction of any court.

History of Section. P.L. 1939, ch. 671, § 3; G.L. 1956, § 6-13-5 ; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

State purchases generally, § 37-2-1 et seq.

6-13-6. Enforcement of chapter.

Upon the complaint of any person, the superior court shall have jurisdiction to restrain and enjoin any act forbidden or declared illegal by any provisions of this chapter and it shall be the duty of the attorney general of this state to enforce and restrain the violation of the sections of this chapter.

History of Section. P.L. 1939, ch. 671, § 4; G.L. 1956, § 6-13-6 ; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Multiple Defendants.

In a proceeding under this section, it was proper to join as respondents three separate oil companies charged with separate violations and not acting in concert. Socony Mobile Oil Co. v. Superior Court, 97 R.I. 396 , 198 A.2d 44, 1964 R.I. LEXIS 94 (1964).

Proper Party.

A manufacturer is a proper party to bring an action to enjoin the sale of its products in violation of this act and to enjoin a conspiracy by such retailers to do so. Catalina, Inc. v. P. Zwetchkenbaum & Sons, 107 R.I. 444 , 267 A.2d 702, 1970 R.I. LEXIS 793 (1970).

This section does not limit the right to bring an action to enjoin violations of the act but authorizes any person to do so. Catalina, Inc. v. P. Zwetchkenbaum & Sons, 107 R.I. 444 , 267 A.2d 702, 1970 R.I. LEXIS 793 (1970).

6-13-7. Conflict with other law.

Whenever the application of any provisions of any other law of this state conflicts with the application of any provision of this chapter then this chapter shall prevail.

History of Section. P.L. 1939, ch. 671, § 5; G.L. 1956, § 6-13-7 .

6-13-8. Severability.

If any of the provisions of this chapter, or the application of any provision to any person or circumstance, shall be held invalid, the remainder of this chapter, or the application of the provisions to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

History of Section. P.L. 1939, ch. 671, § 6; G.L. 1956, § 6-13-8 .

6-13-9. Retail sales of electrical appliances.

Any person who shall sell any electrical appliance at retail at a price in excess of fifty dollars ($50.00) shall conspicuously note on any bill of sale any model year designated by the manufacturer of the electrical appliance.

History of Section. P.L. 1970, ch. 180, § 1.

6-13-10. Unsolicited goods.

The receipt of unsolicited goods, wares, or merchandise through the mail or otherwise shall for all purposes be deemed an unconditional gift to the recipient who may use or dispose of the unsolicited goods, wares, or merchandise in any manner he or she sees fit without any obligation on his or her part to the sender.

History of Section. P.L. 1970, ch. 193, § 1.

6-13-11. Discount price advertisement.

It shall be unlawful to use, communicate, or publish any advertisement that states that an item or product is being sold or offered for sale at below the regular price or at a percentage off the regular price without posting the regular price at the point of purchase. Whenever an item or product is advertised for sale at below the regular price or at a percentage off the regular price, the advertisement shall clearly state whether there is an additional charge for equipment or services that are reasonably necessary for the proper use of the product. Any person, firm, or corporation who or that shall violate the provisions of this section shall be punished by a fine of not more than five hundred dollars ($500).

History of Section. P.L. 1977, ch. 87, § 1; P.L. 1986, ch. 212, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Preemption.

City’s Price and Flavor Ordinances on tobacco sales, regulating certain discounting and prohibiting certain flavored tobacco sales were not preempted by Rhode Island’s state law regulating tobacco sales, minimum pricing, and advertising, because the Rhode Island General Assembly had at no time disclosed, by implication or otherwise, its intent to occupy exclusively the field of regulating smoking. Nat'l Ass'n of Tobacco Outlets v. City of Providence, 731 F.3d 71, 2013 U.S. App. LEXIS 19928 (1st Cir. 2013).

Collateral References.

Fraudulent Representations Concerning Price, Discount, Condition, Quality, Availability or Shipping Costs of Consumer Goods and Services Sold on Internet. 38 A.L.R.7th Art. 4 (2019).

6-13-12. Sales of gift certificates.

  1. “Gift certificate” means a record evidencing a promise, made for monetary consideration, by the seller or issuer for the record that goods or services will be provided to the owner of the record to the value shown in the record and includes, but is not limited to: (1) A record that contains a microprocessor chip, magnetic strip, or other means of storage of information that is pre-funded and for which the value is decremented upon each use; (2) A gift card, an electronic gift card, stored-value card or certificate; (3) A store card; (4) Prepaid long-distance telephone service that is activated by a prepaid card that requires dialing an access number or an access code for each call in addition to dialing the phone number to which the user of the prepaid card seeks to connect; or (5) A similar record or card. Any person, firm, or corporation that sells gift certificates for any product or merchandise sold by the person, firm, or corporation, shall be required to record the sales and keep an accurate and complete record of each gift certificate sold. The record shall include the date of sale; the full value of the certificate; the identification number assigned by the retailer to the certificate; and the state in which the sale of the certificate took place. The retailer shall further be required to give to the purchaser of gift certificates exceeding fifty dollars ($50.00) a written and numbered receipt evidencing the sale of the certificate. It shall be unlawful for any person, firm, or corporation of any kind to charge any surcharge or additional monthly or annual service or maintenance fees on gift certificates or to limit the time for the redemption of a gift certificate or to place an expiration date upon the gift certificate. No gift certificate or any agreement with respect to such gift certificate may contain language suggesting that an expiration date may apply to the gift certificate. Any person, firm, or corporation that shall violate the provisions of this section shall be punished by a fine of not more than two hundred dollars ($200). Due to the unlimited redemption period, the division of taxation shall not escheat the funds paid for those unredeemed gift certificates. Any unused portion of a redeemed gift certificate shall be afforded to the consumer by reissuing the gift certificate for the unused amount or providing cash where the balance due the consumer is less than one dollar ($1.00). This section shall not apply to the following:
  2. Gift certificates that are distributed to a consumer pursuant to an awards, loyalty, or promotional program without any money or other thing of value being given in exchange for the gift certificate by the consumer. Any restrictions or limitations that such gift certificates may be subject to must be disclosed to the consumer, in writing, at the time the gift certificates are distributed to the consumer.
  3. Prepaid wireless telephone service or prepaid wireless telephone card. “Prepaid wireless telephone service” means wireless telephone service that is activated in advance by payment for a finite dollar amount of service or for a finite set of minutes that terminate either upon use by a customer and delivery by the wireless provider of an agreed-upon amount of service corresponding to the total dollar amount paid in advance or within a certain period of time following the initial purchase or activation, unless additional payments are made.
  4. Gift cards or prepaid or store value cards that are issued by state-chartered financial institutions and credit unions or that are issued by third-party issuers usable at multiple, unaffiliated merchants or service providers; provided that said financial institutions, credit unions, or third-party issuers comply with the guidelines on disclosure and marketing as published by the office of the comptroller of the currency.

History of Section. P.L. 1978, ch. 274, § 1; P.L. 1983, ch. 54, § 1; P.L. 1986, ch. 239, § 1; P.L. 1989, ch. 148, § 1; P.L. 1997, ch. 221, § 1; P.L. 1997, ch. 333, § 1; P.L. 2004, ch. 541, § 1; P.L. 2004, ch. 548, § 1; P.L. 2004, ch. 604, § 1; P.L. 2005, ch. 209, § 1; P.L. 2005, ch. 378, § 1; P.L. 2005, ch. 439, § 1; P.L. 2008, ch. 251, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-12.1. Donation of gift certificates.

Any gift certificate/card as defined in § 6-13-12 that has been donated for fundraising purposes shall be exempt from the provisions of § 6-13-12 relating to expiration dates, provided, that the gift certificate/card clearly states that the gift certificate/card has been donated for charity purposes and is subject to a clearly defined expiration date not less than one year from the issuance of the gift certificate/card to the gift certificate/card recipient.

History of Section. P.L. 2012, ch. 270, § 1; P.L. 2012, ch. 281, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-13. Cash register windows — Obstruction of view.

It shall be unlawful to intentionally obstruct the view of any price being registered by a cash register or similar device, or the total cost of purchases, during a sale at retail of any goods or merchandise if the price is not visible to the consumer in another display on the same register or device. Any person, firm, or corporation in violation of the provisions of this section shall be punished by a fine of twenty-five dollars ($25.00). For the purpose of this section, an obstruction to the view of any price shall not be prima facie evidence of intent.

History of Section. P.L. 1981, ch. 29, § 1.

6-13-14. Automatic lease renewal — Notice required.

  1. For purposes of this section, “automatic lease renewal” means a provision in a written lease of personal property providing that, unless the lessee gives written notice to the contrary, the lease shall be automatically renewed for an additional term at the end of the initial lease term or at the end of any subsequent lease term.
  2. Subject to the exclusions stated in subsection (d) of this section, every lessor of personal property under a written lease containing an automatic lease renewal shall give written notice to the lessee not more than ninety (90) nor less than forty-five (45) days prior to the expiration of the lease term. The notice shall state the date upon which the lease term will expire and shall advise the lessee that the lease will be automatically renewed unless the lessee gives written notice to the contrary.
  3. In the event that the lessor fails to give notice as required by subsection (b) of this section, the automatic lease renewal shall be voidable at the option of the lessee.
  4. This section shall not apply to any lease having a term of less than one year. This section shall not apply to any lease wherein the fair market value of the property being leased exceeds one hundred thousand dollars ($100,000) on the date the lease is executed.

History of Section. P.L. 1985, ch. 480, § 1.

6-13-15. Prohibition against recording credit card or social security numbers on checks.

It shall be unlawful, during a sale at retail of any goods or merchandise, to record any credit card or all or part of a social security number obtained from a purchaser as a means of identification upon the check of the purchaser tendered for the sale. Any person, firm, or corporation that shall violate the provisions of this section shall be punished by a fine of not more than one hundred dollars ($100). This section does not prohibit any person from requesting production of, or recording, a credit card number as a condition for cashing or accepting a check, provided the person has agreed with the credit card issuer to cash or accept checks from card holders of the issuer; the issuer has agreed to guarantee card holder checks cashed or accepted by that person; and the card holder has given actual, apparent, or implied authority for the use of his or her card number in the manner and for the purpose described in this section.

History of Section. P.L. 1993, ch. 351, § 1; P.L. 2011, ch. 57, § 1; P.L. 2011, ch. 69, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-16. Prohibition against recording personal information in credit card transactions.

  1. No person, firm, partnership, or corporation that accepts credit cards for the transaction of business shall require the credit card holder to write or cause to be written on a transaction form any personal identification information, including, but not limited to, the credit card holder’s address or telephone number, that is not required by the credit card issuer to complete the credit card transactions.
  2. The credit card holder’s address and telephone number may be required on a transaction form where: (1) this information is necessary for shipping, delivery, installation of purchased merchandise, consumer rental transactions, warranty, or for special orders; (2) authorization from the credit card issuer as to the availability of credit is required by the issuer to complete the credit card transaction; or (3) the person, firm, partnership, or corporation processes credit card transactions by mailing transaction forms to the designated bankcard center for settlement.
  3. This section shall not preclude a person, firm, partnership, or corporation that accepts credit cards from requesting this personal identification and recording it, if it is provided by the card holder pursuant to that request.
  4. Any person, firm, partnership, or corporation who or that shall violate the provisions of this section shall be punished by a fine of not more than one hundred dollars ($100).

History of Section. P.L. 1993, ch. 351, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-17. Requiring consumers to furnish social security numbers.

  1. Unless otherwise required by federal law, no person shall require that a consumer of goods or services disclose all or part of a social security number incident to the sale of consumer goods or services; provided, however, that:
    1. Insurance companies and institutions licensed by the state or federal government for financial services may require applicants for those services to disclose their social security number;
    2. Social security numbers may be required for the providing and billing of health care or pharmaceutical-related services, including the issuance of identification cards and account numbers for users of health care or pharmaceutical-related services; and
    3. Disclosure may be required of a consumer as a condition of applying for a credit card for the purchase of goods or services.
  2. Any person violating the provisions of this section shall be guilty of a misdemeanor, and upon conviction, shall be fined not more than five hundred dollars ($500).
  3. In any civil action alleging a violation of this section, the court may award damages, reasonable attorney’s fees, and costs to a prevailing consumer and afford injunctive relief against any person or business that commits or proposes to commit a violation of this section.

History of Section. P.L. 1993, ch. 435, § 1; P.L. 2011, ch. 57, § 1; P.L. 2011, ch. 69, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-18. Check cashing discrimination.

A business that willingly accepts personal checks from Rhode Island customers for goods or services shall be prohibited from refusing checks based solely on the geographic area in which the customer lives within the state of Rhode Island. Any person, firm, or corporation violating the provisions of this section shall be punished by a civil penalty of not more than one hundred dollars ($100) per violation.

History of Section. P.L. 2001, ch. 196, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Discrimination based on marital status under Equal Credit Opportunity Act (15 U.S.C. §§ 1691 et seq.) as defense to liability for financial obligations. 16 A.L.R. Fed. 3d Art. 9 (2016).

6-13-19. Requiring consumers to furnish social security numbers.

No person, firm, corporation, or other business entity that offers discount cards for purchases made at any business maintained by the offeror shall require that a consumer of goods who applies for a discount card furnish all or part of his or her social security number as a condition precedent to the application for the consumer discount card. No information obtained on the application or by use of a discount card can be sold or given to any other person, firm, corporation, or business entity, provided that the person, firm, corporation, or other business may: (a) disclose such information to its affiliates, to service providers that perform services for it, or as required by law; and/or (b) transfer such information in connection with the sale of its business operations.

History of Section. P.L. 2004, ch. 311, § 1; P.L. 2005, ch. 408, § 1; P.L. 2011, ch. 57, § 1; P.L. 2011, ch. 69, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-20. Rebate restrictions — prohibited.

No person, firm, business, partnership or corporation that issues rebates to its customers in the course of their transactions of business shall restrict their use to one per household per item purchased; provided, however, that this section shall not apply to rebates on the sale of beverages.

History of Section. P.L. 2006, ch. 627, § 2; P.L. 2007, ch. 138, § 1; P.L. 2007, ch. 270, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13-21. Price gouging — Essential commodities.

  1. Upon a declaration of a state of emergency by the governor, or federal disaster declaration by the president, it shall be an unfair sales practice for individuals or retailers to participate in price gouging by making sales, or offering to sell, within the area for which the market emergency is declared, essential commodities to consumers for an amount that represents an unconscionably high price.
  2. As used in this section:
    1. “Unconscionably high price” means the amount charged represents a gross disparity between the average prices at which the same or similar commodity was readily available and sold or offered for sale within the local trade area in the usual course of business during the thirty (30) days immediately before the declaration of the market emergency and the additional charges are not substantially attributable to increased cost to retailers, imposed by their suppliers, including replacement costs imposed by the vendors’ source. Additionally, the average price calculation during said thirty-day (30) period shall not include discounted prices set and offered as a result of bona fide manufacturer’s or supplier’s limited discounts or rebates.
  3. (i) Under a federal disaster declaration by the president or upon a declaration of a state of emergency by the governor, it is unlawful and a violation of chapter 13 of title 6, and § 30-15-9(e)(12) , to sell, or offer to sell, at an unconscionably high price, any essential commodity. (2) “Price gouging” means charging a consumer an unconscionably high price for essential commodities during a declared market emergency. (3) “Essential commodities” means any goods, services, materials, merchandise, supplies, equipment, resources, or other article of commerce, and includes, without limitation, home heating fuels, motor fuels, food, water, ice, chemicals, petroleum products, and lumber necessary for consumption or use as a direct result of the market emergency. (4) “Market emergency” means any declaration of a state of emergency by the governor or federal disaster declaration by the president. The market emergency shall exist until the declaration expires or is terminated. (5) “Individual” means a person, corporation, partnership, limited liability company, association, joint venture, agency, or any other legal or commercial entity.

    (6) “Consumer” means an individual who enters into a transaction primarily for personal, family, or household purposes.

    (7) “Retailer” means and includes every individual licensed to engage in the business of making sales at retail within this state.

    (c) This section shall not prohibit the fluctuation in price of essential commodities that occur during the normal course of business.

    (d) Any violation of this section shall constitute an unfair sales practice under the terms of chapter 13.1 of this title.

    (e) In addition to the penalties provided in chapter 13.1 of this title, and subdivision 30-15-9(e)(12) , the court may impose orders and civil penalties, including, but not limited to:

    1. A fine of not more than one thousand dollars ($1,000) per violation with an aggregate total not to exceed twenty-five thousand dollars ($25,000) for any twenty-four-hour (24) period;
    2. An order to pay costs of litigation relating to the offense;
    3. An order for disgorgement of profits earned; and
    4. Any other relief determined by the court to be appropriate.

      (f) All monetary penalties so collected shall accrue to the enforcing authority to further consumer enforcement efforts.

History of Section. P.L. 2012, ch. 311, § 1; P.L. 2012, ch. 333, § 1; P.L. 2014, ch. 528, § 9.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 13.1 Deceptive Trade Practices

6-13.1-1. Definitions.

As used in this chapter:

  1. “Documentary material” means the original or a copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording wherever situated.
  2. “Examination” of documentary material includes the inspection, study, or copying of any documentary material, and the taking of testimony under oath or acknowledgment in respect of any documentary material or copy of any documentary material.
  3. “Person” means natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity.
  4. “Rebate” means the return of a payment or a partial payment that serves as a discount or reduction in price.
  5. “Trade” and “commerce” mean the advertising, offering for sale, sale, or distribution of any services and any property, tangible or intangible, real, personal, or mixed, and any other article, commodity, or thing of value wherever situate, and include any trade or commerce directly or indirectly affecting the people of this state.
  6. “Unfair methods of competition and unfair or deceptive acts or practices” means any one or more of the following:
    1. Passing off goods or services as those of another;
    2. Causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
    3. Causing likelihood of confusion or of misunderstanding as to affiliation, connection, or association with, or certification by, another;
    4. Using deceptive representations or designations of geographic origin in connection with goods or services;
    5. Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he or she does not have;
    6. Representing that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used, or secondhand; and if household goods have been repaired or reconditioned, without conspicuously noting the defect that necessitated the repair on the tag that contains the cost to the consumer of the goods;
    7. Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
    8. Disparaging the goods, services, or business of another by false or misleading representation of fact;
    9. Advertising goods or services with intent not to sell them as advertised;
    10. Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;
    11. Making false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions;
    12. Engaging in any other conduct that similarly creates a likelihood of confusion or of misunderstanding;
    13. Engaging in any act or practice that is unfair or deceptive to the consumer;
    14. Using any other methods, acts, or practices that mislead or deceive members of the public in a material respect;
    15. Advertising any brand name goods for sale and then selling substituted brand names in their place;
    16. Failure to include the brand name and or manufacturer of goods in any advertisement of the goods for sale, and, if the goods are used or secondhand, failure to include the information in the advertisement;
    17. Advertising claims concerning safety, performance, and comparative price unless the advertiser, upon request by any person, the consumer council, or the attorney general, makes available documentation substantiating the validity of the claim;
    18. Representing that work has been performed on or parts replaced in goods when the work was not in fact performed or the parts not in fact replaced; or
    19. Failing to separately state the amount charged for labor and the amount charged for services when requested by the purchaser as provided for in § 44-18-12(b)(3).
    20. Advertising for sale at a retail establishment the availability of a manufacturer’s rebate by displaying the net price of the advertised item (the price of the item after the rebate has been deducted from the item’s price) in the advertisement, unless the amount of the manufacturer’s rebate is provided to the consumer by the retailer at the time of the purchase of the advertised item. It shall be the retailer’s burden to redeem the rebate offered to the consumer by the manufacturer.

History of Section. P.L. 1968, ch. 12, § 1; P.L. 1970, ch. 249, § 1; P.L. 1976, ch. 302, § 1; P.L. 1976, ch. 317, § 1; P.L. 1978, ch. 325, § 1; P.L. 1986, ch. 207, § 1; P.L. 1989, ch. 231, § 1; P.L. 1991, ch. 169, § 1; P.L. 2006, ch. 209, § 1; P.L. 2006, ch. 334, § 1; P.L. 2007, ch. 31, § 1; P.L. 2007, ch. 38, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Tampering with automobile odometer as deceptive trade practice, § 31-23.2-11 .

Comparative Legislation.

Deceptive or unfair trade practices:

Conn. Gen. Stat. § 42-115c et seq.

Mass. Ann. Laws ch. 93A, § 1 et seq.

NOTES TO DECISIONS

Arbitration.

Trial court properly denied the motion to stay proceedings and compel arbitration filed by related computer companies in a class action suit involving deceptive trade practices as it could not be said that the purchasing consumers were bound by an agreement to arbitrate that was included in the packaging of the computers purchased. DeFontes v. Dell, Inc., 984 A.2d 1061, 2009 R.I. LEXIS 142 (2009).

Consumer.

A tenant is not a “consumer” under this chapter, and the tenant’s request that her landlord make repairs to her apartment did not elevate the tenant to the status of a consumer entitled to a remedy under the unfair trade practice statute. Kelley v. Cowesett Hills Assocs., 768 A.2d 425, 2001 R.I. LEXIS 86 (2001).

“Regulatory Body.”

Because the Office of the Comptroller of the Currency (OCC) monitors and controls a national bank’s credit card solicitations, the OCC is a “regulatory body” for purposes of the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws § 6-13.1 et seq. Chavers v. Fleet Bank (RI), N.A., 844 A.2d 666, 2004 R.I. LEXIS 38 (2004).

Soliciting Reaffirmation of Dischargeable Debt.

A creditor did not violate this chapter by mailing a letter to the debtor’s counsel, with a copy to the debtor, soliciting the reaffirmation of a dischargeable debt. Jefferson v. G. Fox, 144 B.R. 620, 1992 Bankr. LEXIS 1470 (Bankr. D.R.I. 1992).

Venue.

There is no meaningful public policy obstacle thwarting the proposed shifting of venue of a cause of action under the Deceptive Trade Practices Act to another state. D'Antuono v. CCH Computax Systems, Inc., 570 F. Supp. 708, 1983 U.S. Dist. LEXIS 13661 (D.R.I. 1983).

Collateral References.

Commercial competitor’s truthful denomination of his goods as copies of designs of another, using designer’s name, as trademark infringement, unfair competition, or the like. 1 A.L.R.3d 760.

Constitutional right to jury trial in cause of action under state unfair or deceptive trade practices law. 54 A.L.R.5th 631.

Coverage of insurance transactions under state consumer protection statutes. 77 A.L.R.4th 991.

Coverage of leases under state consumer protection statutes. 89 A.L.R.4th 854.

Implied warranty coverage for service transactions under state consumer protection and deceptive trade statutes. 72 A.L.R.4th 282.

Practices forbidden by state deceptive trade practice and consumer protection acts, generally. 89 A.L.R.3d 449.

Private right of action, right to private action under state consumer protection act. 62 A.L.R.3d 169.

Rights and remedies with respect to another’s use of a deceptively similar advertising slogan. 2 A.L.R.3d 748.

Validity of express statutory grant of power to state to seek, or to court to grant, restitution of fruits of consumer fraud. 59 A.L.R.3d 1222.

Who is a “consumer” entitled to protection of state deceptive trade practice and consumer protection acts. 63 A.L.R.5th 1.

6-13.1-2. Unlawful acts or practices.

Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are declared unlawful.

History of Section. P.L. 1968, ch. 12, § 1.

NOTES TO DECISIONS

Applicability.

Because chapter 24.5 of title 23 regulates asbestos abatement, an action for unfair or deceptive trade practices filed by an apartment tenant was preempted pursuant to § 6-13.1-4 . Kelley v. Cowesett Hills Assocs., 768 A.2d 425, 2001 R.I. LEXIS 86 (2001).

Bad Faith Not Standard.

Deceptive Trade Practices Act, R.I. Gen. Laws Chapter 13.1 of Title 6, does not require a showing of bad faith but only requires an “unfair or deceptive” act or practice; while trade practices undertaken in bad faith are also likely to be unfair or deceptive, bad faith is not the statutory standard. Long v. Dell, Inc., 93 A.3d 988, 2014 R.I. LEXIS 105 (2014).

Legitimate Purpose.

There was no genuine dispute that a towing policy did not constitute an unfair or deceptive trade practice since the policy served the legitimate purpose of providing access to plows and emergency vehicles and since the residents of the area had notice of the policy and had complied with it in the past. Ames v. Oceanside Welding & Towing Co., 767 A.2d 677, 2001 R.I. LEXIS 74 (2001).

Unfair or Deceptive Practice.

Superior court erred in granting a seller summary judgment because a factfinder could conclude that its practice of charging sales tax on service contracts was unfair or deceptive under the Deceptive Trade Practices Act, R.I. Gen. Laws Chapter 13.1 of Title 6; a factfinder could conclude that the seller’s sales tax calculation and collection practice offended public policy, was immoral, unethical, oppressive, or unscrupulous, and caused substantial injury to consumers, and that its misrepresentation to a purchaser was deceptive. Long v. Dell, Inc., 93 A.3d 988, 2014 R.I. LEXIS 105 (2014).

Collateral References.

Former employee’s duty, in absence of express contract, not to solicit former employer’s customers or otherwise use his knowledge of customer lists acquired in earlier employment. 28 A.L.R.3d 7.

Fraudulent Representations Concerning Price, Discount, Condition, Quality, Availability or Shipping Costs of Consumer Goods and Services Sold on Internet. 38 A.L.R.7th Art. 4 (2019).

Rights and remedies with respect to another’s use of a deceptively similar advertising slogan. 2 A.L.R.3d 748.

Unfair competition by imitation in sign or design or business place. 86 A.L.R.3d 884.

Use of “family name” by corporation as unfair competition. 72 A.L.R.3d 8.

World wide web domain as violating state trademark protection statute or state Unfair Trade Practices Act. 96 A.L.R.5th 1.

6-13.1-3. Interpretation.

It is the intent of the legislature that in construing §§ 6-13.1-1 and 6-13.1-2 due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to § 5(a) of the Federal Trade Commission Act. 15 U.S.C. § 45(a)(1), as from time to time amended.

History of Section. P.L. 1968, ch. 12, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Unfair or Deceptive Practice.

Superior court erred in granting a seller summary judgment because a factfinder could conclude that its practice of charging sales tax on service contracts was unfair or deceptive under the Deceptive Trade Practices Act, R.I. Gen. Laws Chapter 13.1 of Title 6; a factfinder could conclude that the seller’s sales tax calculation and collection practice offended public policy, was immoral, unethical, oppressive, or unscrupulous, and caused substantial injury to consumers, and that its misrepresentation to a purchaser was deceptive. Long v. Dell, Inc., 93 A.3d 988, 2014 R.I. LEXIS 105 (2014).

6-13.1-4. Exemptions.

  1. Nothing in this chapter shall apply to actions or transactions permitted under laws administered by the department of business regulation or other regulatory body or officer acting under statutory authority of this state or the United States.
  2. For actions brought by the attorney general, the exemption in subsection (a)  applies only if the person claiming the exemption shows that:
    1. The person’s business activities are subject to regulation by a state or federal agency; and
    2. The activity or conduct is in compliance with orders, including insurance bulletins, or rules of, or a statute administered by, a federal or state government agency.

History of Section. P.L. 1968, ch. 12, § 1; P.L. 2021, ch. 206, § 1, effective July 7, 2021; P.L. 2021, ch. 329, § 1, effective July 9, 2021.

Compiler's Notes.

P.L. 2021, ch. 206, § 1, and P.L. 2021, ch. 329, § 1 enacted identical amendments to this section.

NOTES TO DECISIONS

Activities Exempted.

The legislature exempted from the provisions of the Deceptive Trade Practices Act all those activities and businesses which are subject to monitoring by state or federal regulatory bodies or officers. State v. Piedmont Funding Corp., 119 R.I. 695 , 382 A.2d 819, 1978 R.I. LEXIS 605 (1978); Doyle v. Chihoski, 443 A.2d 1243, 1982 R.I. LEXIS 831 (1982).

Where defendants were engaged in the business of selling insurance and securities, both of these activities were approved by various governmental agencies and regulatory bodies on both the state and federal level, and were therefore exempt from the provisions of this chapter. State v. Piedmont Funding Corp., 119 R.I. 695 , 382 A.2d 819, 1978 R.I. LEXIS 605 (1978).

Where defendants produced evidence that the sale of insurance and of mutual funds is regulated by the insurance commissioner and the federal securities exchange commission, respectively, and have shown that failure to comply with the rules and regulations promulgated by these agencies will result in the revocation of the license to sell insurance or mutual funds, the evidence was sufficient to bring the activities involved within the exemption provision of this section. State v. Piedmont Funding Corp., 119 R.I. 695 , 382 A.2d 819, 1978 R.I. LEXIS 605 (1978).

Because chapter 24.5 of title 23 regulates asbestos abatement, an action for unfair or deceptive trade practices filed by an apartment tenant was preempted pursuant to § 6-13.1-4 . Kelley v. Cowesett Hills Assocs., 768 A.2d 425, 2001 R.I. LEXIS 86 (2001).

Pursuant to R.I. Gen. Laws § 6-13.1-4 , the activities of the defendant contractor, in relation to the construction of plaintiff homeowners’ house were exempt from the Deceptive Trade Practices Act, R.I. Gen. Laws Chapter 13.1 of Title 6, since the contractor was regulated by the state building contractor’s registration board. Kondracky v. Crystal Restoration, Inc., 791 A.2d 482, 2002 R.I. LEXIS 23 (2002).

Credit card solicitations by a national bank were subject to the monitoring, supervision, and regulation by federal agencies, including the Office of the Comptroller of the Currency, which acted pursuant to the Truth in Lending Act, 15 U.S.C. §§ 1601-1667f, and the Federal Reserve Board, which acted pursuant to Regulation Z, 12 C.F.R. § 226; accordingly, such activities are exempt from and not subject to the mandates of the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws § 6-13.1 et seq., based on the exemption of R.I. Gen. Laws § 6-13.1-4 . Chavers v. Fleet Bank (RI), N.A., 844 A.2d 666, 2004 R.I. LEXIS 38 (2004).

Attorney General could not enforce a civil investigative demand issued pursuant to the Deceptive Trade Practices Act (DTPA) because the particular activity complained of, selling residential property without disclosing the existence of lead paint, was exempted from the DTPA. Lynch v. Conley, 853 A.2d 1212, 2004 R.I. LEXIS 168 (2004).

Step one of the exemption analysis under the Deceptive Trade Practices Act requires the party claiming the exemption to demonstrate that the general activities complained of are subject to monitoring or regulation by a state or federal government agency. Lynch v. Conley, 853 A.2d 1212, 2004 R.I. LEXIS 168 (2004).

Since the safe harbor exemption of the Rhode Island Deceptive Trade Practices Act (RIDTPA) was significantly broader in scope than the safe harbor exemption under the laws of the other states at issue and because defendant showed that it was subject to monitoring in relevant respects by the Rhode Island Department of Health, defendant showed it qualified for the RIDTPA safe harbor exemption (class action suit alleging defendant fraudulently sold bottled water as “spring water”). Patane v. Nestlé Waters N. Am., Inc., 478 F. Supp. 3d 318, 2020 U.S. Dist. LEXIS 144646 (D. Conn. 2020).

Burden of Proof.

Where the party claiming an exemption from this chapter shows that the general activity in question is regulated by a regulatory body or officer within the meaning of this section, the opposing party then has the burden of showing that the specific acts at issue are not covered by the exemption. State v. Piedmont Funding Corp., 119 R.I. 695 , 382 A.2d 819, 1978 R.I. LEXIS 605 (1978); Perron v. Treasurer of Woonsocket, 121 R.I. 781 , 403 A.2d 252, 1979 R.I. LEXIS 1978 (1979).

6-13.1-5. Restraining prohibited acts.

  1. Whenever the attorney general has reason to believe that any person is using, has used, or is about to use any method, act, or practice declared to be unlawful by § 6-13.1-2 , and that proceedings would be in the public interest, the attorney general may bring an action in the name of the state against the person to restrain by temporary or permanent injunction the use of the method, act, or practice, upon the giving of appropriate notice to that person and to seek any other relief that may be appropriate.
  2. The action may be brought in the superior court of the county in which the person shall dwell or be found; or have his or her principal place of business; or with consent of the parties; or if the person is a nonresident or has no principal place of business within this state or if the superior court shall not be in session in the counties previously said to be applicable, may be brought in the superior court of Providence County. The superior courts are authorized to issue temporary or permanent injunctions to restrain and prevent violations of this chapter and the injunctions shall be issued without bond.
  3. The court may make any additional orders or judgments that may be necessary to restore to any person in interest any moneys or property, real or personal, that may have been acquired by means of any practice in this chapter declared to be unlawful, including the appointment of a receiver in any case where the superior court finds that the assets of a corporation are in danger of being misapplied, dissipated, wasted, or lost, or the revocation of a license or certificate authorizing that person to engage in business in this state, or both.
  4. Actions under this chapter may be brought without regard to the pendency of criminal proceedings arising out of the same acts or practices and no action shall bar the institution of criminal proceedings arising out of the same acts or practices. No involuntary admission by any person in the action shall be admissible in any subsequent criminal proceeding.
  5. Any person who violates the terms of an injunction issued under this section shall forfeit and pay to the state a civil penalty of not more than ten thousand dollars ($10,000) per violation. For the purposes of this section, the superior court of a county issuing an injunction shall retain jurisdiction, and the cause shall be continued, and in those cases the attorney general, acting in the name of the state, may petition for recovery of civil penalties and damages.

History of Section. P.L. 1968, ch. 12, § 1; P.L. 1970, ch. 249, § 2; P.L. 2014, ch. 528, § 10; P.L. 2021, ch. 206, § 1, effective July 7, 2021; P.L. 2021, ch. 329, § 1, effective July 9, 2021.

Compiler's Notes.

P.L. 2021, ch. 206, § 1, and P.L. 2021, ch. 329, § 1 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Standing.

A corporation does not have standing to assert a claim under this chapter. Scully Signal Co. v. Joyal, 881 F. Supp. 727, 1995 U.S. Dist. LEXIS 3376 (D.R.I. 1995).

6-13.1-5.1. Power of receiver.

When a receiver is appointed by the court pursuant to this chapter, he or she shall have the power to sue for, collect, receive, and take into his or her possession all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes, and property of every description derived by means of any practice declared to be illegal and prohibited by this chapter, including property with which the property has been mingled if it cannot be identified in kind because of the commingling, and to sell, convey, and assign the property and hold and dispose of the proceeds under the direction of the court. Any person who has suffered damages as a result of the use of or employment of any unlawful practices and submits proof to the satisfaction of the court that he or she has in fact been damaged, may participate with general creditors in the distribution of the assets to the extent he or she has sustained out-of-pocket losses. In the case of a partnership or business entity, the receiver shall settle the estate and distribute the assets under the direction of the court. The court shall have jurisdiction of all questions arising in the proceedings and may make any orders and judgments therein as may be required.

History of Section. P.L. 1970, ch. 249, § 3.

6-13.1-5.2. Private and class actions.

  1. Any person who purchases or leases goods or services primarily for personal, family, or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act, or practice declared unlawful by § 6-13.1-2 , may bring an action under the rules of civil procedure in the superior court of the county in which the seller or lessor resides; is found; has his or her principal place of business or is doing business; or in the superior court of the county as is otherwise provided by law, to recover actual damages or five hundred dollars ($500), whichever is greater. The court may award damages equal to three (3) times the amount of actual damages and, in its discretion, provide other equitable relief that it deems necessary or proper.
  2. Persons entitled to bring an action under subsection (a) of this section may, if the unlawful method, act, or practice has caused similar injury to numerous other persons similarly situated and if they adequately represent the similarly situated persons, bring an action on behalf of themselves and other similarly injured and situated persons to recover damages as provided for in subsection (a) of this section. In any action brought under this section, the court may in its discretion order, in addition to damages, injunctive or other equitable relief.
  3. Upon commencement of any action brought under subsection (a) of this section, the clerk of court shall mail a copy of the complaint or other initial pleading to the attorney general and, upon entry of any judgment or decree in the action, shall mail a copy of the judgment or decree to the attorney general.
  4. In any action brought by a person under this section, the court may award, in addition to the relief provided in this section, reasonable attorney’s fees and costs.
  5. Any permanent injunction, judgment, or order of the court made under § 6-13.1-5 shall be prima facie evidence in an action brought under this section that the respondent used or employed a method, act, or practice declared unlawful by § 6-13.1-2 .

History of Section. P.L. 1970, ch. 249, § 3; P.L. 2014, ch. 528, § 10; P.L. 2021, ch. 206, § 1, effective July 7, 2021; P.L. 2021, ch. 329, § 1, effective July 9, 2021.

Compiler's Notes.

P.L. 2021, ch. 206, § 1, and P.L. 2021, ch. 329, § 1 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Business Entities.

This chapter does not provide a private right of action for business persons or entities. Scully Signal Co. v. Joyal, 881 F. Supp. 727, 1995 U.S. Dist. LEXIS 3376 (D.R.I. 1995).

Since the plaintiff in this case is a competitor of the defendant in the video rental business, the plaintiff clearly does not have standing to bring a private action under this statute. ERI Max Entertainment v. Streisand, 690 A.2d 1351, 1997 R.I. LEXIS 78 (1997).

Exemptions.

A national bank was granted summary judgment in a class action suit by credit-card account holders, alleging a violation of the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws § 6-13.1 et seq., arising from the bank’s having solicited them to open accounts on favorable terms, only to thereafter change the terms, as the claim under R.I. Gen. Laws § 6-13.1-5.2 fit within the exemption of R.I. Gen. Laws § 6-13.1-4 because the matter was subject to control and monitoring of the Office of the Comptroller of the Currency, as well as its enforcement authority under 15 U.S.C. § 45(a) and 12 U.S.C. § 1818. Chavers v. Fleet Bank (RI), N.A., 844 A.2d 666, 2004 R.I. LEXIS 38 (2004).

Jurisdiction.

Based on a car buyer’s consumer fraud claim under the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws § 6-13.1, a superior court had jurisdiction to hear the car buyer’s class action case regarding a truck’s missing $ 200 security system which was listed as a standard feature on a window sticker. Park v. Ford Motor Co., 844 A.2d 687, 2004 R.I. LEXIS 35 (2004).

In a suit involving consumers (yet-to-be class certified) asserting that a computer business improperly collected a tax from them on service contracts they purchased along with a new computer, the Rhode Island Superior Court had subject matter jurisdiction over the action as their claims were being asserted under the Rhode Island Deceptive Trade Practices Act, R.I. Gen. Laws § 6-13.1-5.2(a) , and common-law negligence, and did not present a tax aggrievement case. As a result, the motion to dismiss filed by the intervening tax administrator for the Rhode Island Division of Taxation was denied. Long v. Dell, Inc., 984 A.2d 1074, 2009 R.I. LEXIS 141 (2009).

Standing.

Foreclosure sale purchaser did not have standing to bring a private claim under the Unfair Trade Practice and Consumer Protection Act against mortgagees because the purchaser was a Rhode Island limited liability company. Premier Home Restoration, LLC v. Fannie Mae, 245 A.3d 745, 2021 R.I. LEXIS 10 (2021).

Unfair or Deceptive Practice.

Superior court erred in granting a seller summary judgment because a factfinder could conclude that its practice of charging sales tax on service contracts was unfair or deceptive under the Deceptive Trade Practices Act, R.I. Gen. Laws Chapter 13.1 of Title 6; a factfinder could conclude that the seller’s sales tax calculation and collection practice offended public policy, was immoral, unethical, oppressive, or unscrupulous, and caused substantial injury to consumers, and that its misrepresentation to a purchaser was deceptive. Long v. Dell, Inc., 93 A.3d 988, 2014 R.I. LEXIS 105 (2014).

Collateral References.

Right to private action under state consumer protection act — Equitable relief available. 115 A.L.R.5th 709.

Right to private action under state consumer protection act — Preconditions to action. 117 A.L.R.5th 155.

6-13.1-6. Assurances of voluntary compliance.

In the administration of this chapter, the attorney general may accept an assurance of voluntary compliance with respect to any method, act, or practice deemed to be a violation of the chapter from any person who has engaged or was about to engage in any method, act, or practice. Any assurance shall be in writing and filed with and subject to the approval of the superior court of the county in which the alleged violator shall dwell or have his or her principal place of business, or the superior court of Providence County. The assurance of voluntary compliance shall not be considered an admission of a violation for any purpose. Matters thus closed may be reopened at any time by the attorney general for further proceedings in the public interest pursuant to § 6-13.1-5 .

History of Section. P.L. 1968, ch. 12, § 1.

NOTES TO DECISIONS

Review.

Where defendant entered into an assurance of voluntary compliance with the state in which it was stipulated that in the event of defendants’ failure to abide by their promises, the state could then seek to hold them in contempt, it was improvident for the Supreme Court to issue a writ of certiorari while such contempt proceedings were pending. State v. New Eng. Roofing & Gutter Co., 119 R.I. 576 , 381 A.2d 1043, 1978 R.I. LEXIS 588 (1978).

6-13.1-7. Investigations — Procedure — Remedies for failure to comply.

  1. When it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in, any act or practice declared to be unlawful by this chapter, or when the attorney general believes it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in, is engaging in, or is about to engage in, any act or practice declared to be unlawful by this chapter, he or she may execute, in writing, and cause to be served upon any person who is believed to have information, documentary material, or physical evidence relevant to the alleged or suspected violation, an investigative demand stating the general subject matter of the investigation and the statute and section under which the suspected violation is alleged and require the person to furnish, under oath or otherwise, a report in writing stating the relevant facts and circumstances of which the person has knowledge, or to appear and testify or to produce relevant, documentary material or physical evidence for examination, at any reasonable time and place that may be stated in the investigative demand, concerning the advertisement, sale, or offering for sale of any goods or services or the conduct of any trade or commerce that is the subject matter of the investigation. All civil investigative demands may, at the discretion of the attorney general, be filed in the superior court of the county in which the person served with the demand shall dwell or have his principal place of business.
  2. At any time before the return date specified in an investigative demand, or within twenty (20) days after the demand has been served, whichever period is shorter, a petition to extend the return date or to modify or set aside the demand, stating good cause, may be filed in the superior court in which the person served with the demand shall dwell or have his or her principal place of business, or in the superior court of Providence County.
  3. To accomplish the objectives and to carry out the duties prescribed by this chapter, the attorney general, in addition to other powers conferred upon him or her by this chapter, may issue subpoenas to any person; administer an oath or affirmation to any person; conduct hearings in aid of any investigation or inquiry; and prescribe any forms and promulgate any rules and regulations that may be necessary, which rules and regulations shall have the force of law; provided that none of the powers conferred by this chapter shall be used for the purpose of compelling any natural person to furnish testimony or evidence that might tend to incriminate the person or subject him or her to a penalty or forfeiture; and provided further that information obtained pursuant to the powers conferred by this chapter shall not be made public or disclosed by the attorney general or his or her employees beyond the extent necessary for law enforcement purposes in the public interest.
  4. Service of any notice, demand, or subpoena under this chapter shall be made personally within this state, but if personal service cannot be obtained, substituted service may be made in the following manner:
    1. Personal service without this state;
    2. The mailing of any notice, demand, or subpoena under this chapter by registered or certified mail to the last known place of business, residence, or abode within or without this state of the person for whom the service is intended;
    3. As to any person other than a natural person, in the manner provided in the rules of civil procedure as if a complaint or other pleading that institutes a civil proceeding had been filed; or
    4. Service that the superior court may direct in lieu of personal service within this state.
  5. A person upon whom a demand is served pursuant to the provisions of this section shall comply with the terms of the demand unless otherwise provided by order of court. Subject to the protections provided for in subsection (c) relating to self incrimination, any person who, with intent to avoid, evade, or prevent compliance, in whole or in part, with any civil investigative demand under this section, removes from any place, conceals, withholds, or destroys, mutilates, alters, or by any other means falsifies any documentary material in the possession, custody, or control of any person subject of any demand, or knowingly conceals any relevant information, shall be fined not more than five thousand dollars ($5,000).
  6. If any person fails or refuses to file any statement or report, or obey any subpoena or investigative demand issued by the attorney general, the attorney general may file in the superior court of the county in which the person shall dwell or be found; or has his or her principal place of business; or of Providence County, if the superior court at the previously mentioned county shall not be in session, or if the person is a nonresident or has no principal place of business in this state; or of the other county as may be agreed upon by the parties to the petition; and serve upon the person a petition for an order of the court for the enforcement of this section, and the petition may request, and the court shall have jurisdiction to grant, after notice and a hearing, an order:
    1. Granting injunctive relief to restrain the person from engaging in the advertising or sale of any merchandise, or the conduct of any trade or commerce, that is involved in the alleged or suspected violation;
    2. Vacating, annulling, or suspending the corporate charter of a corporation created by or under the laws of this state or revoking or suspending the certificate of authority to do business in this state of a foreign corporation or revoking or suspending any other licenses, permits, or certificates issued pursuant to law to the person that are used to further the allegedly unlawful practice; and
    3. Granting any other relief that may be required, until the person files the statement or report, or obeys the subpoena or investigative demand.
  7. Any final order so entered shall be subject to appeal to the state supreme court. Any disobedience of any final order entered under this section by any court shall be punished as a contempt of court.

History of Section. P.L. 1968, ch. 12, § 1; P.L. 1970, ch. 249, § 4; P.L. 1987, ch. 131, § 1; P.L. 2014, ch. 528, § 10; P.L. 2016, ch. 535, § 1.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-8. Civil penalties.

Any person who violates the provisions of this chapter shall forfeit and pay to the state a civil penalty of not more than ten thousand dollars ($10,000) per violation. The attorney general, acting in the name of the state, may petition for recovery of civil penalties.

History of Section. P.L. 1968, ch. 12, § 1; P.L. 2021, ch. 206, § 1, effective July 7, 2021; P.L. 2021, ch. 329, § 1, effective July 9, 2021.

Compiler's Notes.

P.L. 2021, ch. 206, § 1, and P.L. 2021, ch. 329, § 1 enacted identical amendments to this section.

6-13.1-9. Forfeiture of corporate franchise.

Upon petition by the attorney general, the superior court may, in its discretion, order the dissolution or suspension or forfeiture of franchise of any corporation that violates the terms of an injunction issued under § 6-13.1-5 .

History of Section. P.L. 1968, ch. 12, § 1.

6-13.1-10. Severability.

If any provision of this chapter is declared unconstitutional, or the application of any provision of this chapter to any person or circumstance is held invalid, the constitutionality of the remainder of the chapter and its applicability to other persons and circumstances shall not be affected thereby.

History of Section. P.L. 1968, ch. 12, § 1.

6-13.1-11. Short title.

This chapter shall be known and designated as the “Unfair Trade Practice and Consumer Protection Act.”

History of Section. P.L. 1968, ch. 12, § 1.

6-13.1-12. Appliances — Providing parts and manuals.

No person who manufactures or distributes parts for electric and/or gas appliances shall refuse to sell or provide the parts or to sell or provide a service manual to any person engaged in the business of servicing and repairing the appliances.

History of Section. P.L. 1970, ch. 182, § 1.

6-13.1-12.1. Appliances — Information concerning used or rebuilt parts.

Any person engaged in the business of servicing or repairing electric and/or gas appliances for consumers shall, prior to any servicing or repair, inform the consumer of the intention to utilize any used or rebuilt parts. The utilization of used or rebuilt parts shall be indicated on the customer’s repair invoice. Any person who violates the provisions of this section shall pay a civil penalty of up to five hundred dollars ($500).

History of Section. P.L. 2000, ch. 370, § 1.

6-13.1-13. Price discrimination prohibited.

No person who manufactures or distributes parts for electric and/or gas appliances shall discriminate in the price for which it offers the appliance parts for sale to any person engaged in the business of servicing or repairing the appliances.

History of Section. P.L. 1970, ch. 182, § 1.

6-13.1-14. Penalties.

Any person who violates the provisions of §§ 6-13.1-12 and/or 6-13.1-13 shall be guilty of a misdemeanor and shall pay a fine of five hundred dollars ($500).

History of Section. P.L. 1970, ch. 182, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-15. Piracy of recordings.

  1. As used in this section, “article” means a phonograph record, disc, wire, tape, film, compact disc, audio or video cassette, compact video disc, or other device on which sounds or images are or can be recorded or otherwise stored.
  2. Unless exempt under subsection (d), it is unlawful for any person, firm, partnership, corporation, or association knowingly to:
    1. Transfer or cause to be transferred any sounds recorded on any article on which sounds are recorded onto any other article;
    2. Transfer or cause to be transferred any performance, whether live before an audience or transmitted by wire or through the air by radio or television, onto any article; or
    3. Sell, distribute, circulate, offer for sale, distribution, or circulation, possess for the purpose of sale, distribution, or circulation, or cause to be sold, distributed, circulated, offered for sale, distribution, or circulation, or possessed for sale, distribution, or circulation, any article on which sounds or performances have been transferred without the consent of the person who owns the master article from which the sounds are derived or the right to record the performance.
  3. It is unlawful for any person, firm, partnership, corporation, or association to sell, distribute, circulate, offer for sale, distribution, or circulation or possess for the purposes of sale, distribution, or circulation, any article on which sounds or images have been transferred unless the article bears the actual name and address of the transferor of the sounds in a prominent place on its outside face or package.
  4. This section does not apply to any person who transfers or causes to be transferred any sounds or images intended for, or in connection with, radio or television broadcast transmission or related uses for archival purposes or solely for the personal use of the person transferring or causing the transfer and without any compensation being derived by the person from the transfer.
  5. Every person who violates the provisions of this section is guilty of a felony and:
    1. For the first offense is punishable by a fine of not more than five thousand dollars ($5,000) or by imprisonment in the state prison for not more than six (6) years, or by both fine and imprisonment.
    2. For a subsequent offense is punishable by a fine of not more than five thousand dollars ($5,000) or by imprisonment in the state prison for not more than ten (10) years, or by both fine and imprisonment.
    3. The court in its judgment of conviction may order the forfeiture and destruction or other disposition of all infringing articles and all implements, devices, and equipment used in the manufacture of the infringing articles.

History of Section. P.L. 1976, ch. 257, § 1; P.L. 1990, ch. 387, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-16. Disclosure of service contract agreements.

  1. It shall be a deceptive trade practice in violation of this chapter for any service contractor to fail to disclose to any person who is a prospective customer, at the time that the person makes initial contact by any means with the service contractor, that a service call made by the service contractor to the home or business of the prospective customer will require the payment by the prospective customer of separate and distinct fees for the following:
    1. Service charge — the fee charged by the service contractor to respond to the request for service.
    2. Labor charge.
  2. As used in this section:
    1. “Service contractor” means a person engaged in the business of repairing, overhauling, adjusting, assembling, or disassembling consumer goods.
    2. “Person” means a natural person, corporation, trust, partnership, incorporated or unincorporated association, and any other legal entity.

History of Section. P.L. 1979, ch. 134, § 1.

6-13.1-17. Contracts — Provision to sell real estate.

It is unlawful for any person, firm, partnership, corporation, or association to provide in any contract for the purchase of consumer goods or documents related to them a provision allowing the seller the power to sell or attach real estate for default without first obtaining an order by a court exercising proper jurisdiction of the subject matter.

History of Section. P.L. 1982, ch. 280, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-18. Manufacturers’ duties under motor vehicle warranties.

Failure by a motor vehicle manufacturer, as defined in § 31-5.2-1 , to comply with the provisions of chapter 5.2 of title 31 entitled “Consumer Enforcement of Motor Vehicle Warranties” shall constitute a deceptive trade practice under the terms of this chapter. All of the public and private remedies provided for in this chapter shall be available to enforce the provisions of chapter 5.2 of title 31.

History of Section. P.L. 1984, ch. 353, § 2; P.L. 1984, ch. 361, § 2.

6-13.1-19. Motor vehicle dealer’s duty when selling used vehicle.

Failure of a motor vehicle dealer to comply with the provisions of chapter 5.3 of title 31 shall constitute a deceptive trade practice under the terms of this chapter. All of the public and private remedies provided for in this chapter shall be available to enforce the provisions of chapter 5.3 of title 31.

History of Section. P.L. 1985, ch. 478, § 2.

Collateral References.

Liability on implied warranties in sale of used motor vehicle. 47 A.L.R.5th 677.

6-13.1-20. Credit reports — Definitions.

As used in this chapter:

  1. “Credit bureau” means any entity or person who or that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing credit reports to third parties;
    1. “Credit report” means any written, oral, or other communication of any information by a credit bureau bearing on a consumer’s credit worthiness, credit standing, or credit capacity, that is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for:
      1. Credit or insurance to be used primarily for personal, family, or household purposes;
      2. Employment purposes; or
      3. Other purposes authorized under the federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.
    2. “Credit report” does not include:
      1. Any report containing information solely as to transactions or experiences between the consumer and the person making the report;
      2. Any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;
      3. Any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his or her decision with respect to that request if the third party advises the consumer of the name and address of the person to whom the request was made and the person makes the disclosures to the consumer required under the federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.; or
      4. Any report containing information solely on a consumer’s character, general reputation, personal characteristics, or mode of living that is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on, or with others with whom he or she is acquainted or who may have knowledge concerning those items of information, only if the report is not used in granting, extending, or decreasing credit.

History of Section. P.L. 1993, ch. 430, § 1; P.L. 1994, ch. 265, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

What Constitutes “Consumer Reporting Agency” Within Meaning of Fair Credit Reporting Act, 15 U.S.C. § 1681a(f). 48 A.L.R. Fed. 3d Art. 5 (2020).

6-13.1-21. Credit reports — Notice to individual — Requirements of users of credit reports.

  1. No person or business shall request a credit report in connection with a consumer’s application for credit, employment, or insurance unless a consumer is first informed that a credit report may be requested in connection with the application.
  2. Whenever credit or insurance for personal, family, household purposes, or employment involving a consumer is denied or the charge for that credit or insurance is increased either wholly or partly because of information contained in a credit report from a credit bureau, the user of the credit report shall advise the consumer against whom the adverse action has been taken and supply the name and address of the credit bureau making the report.

History of Section. P.L. 1993, ch. 430, § 1; P. L. 1994, ch. 265, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-22. Access to credit reports.

Any consumer who requests disclosure of his or her credit file from a credit bureau shall be entitled to have mailed to the consumer a copy of the information in the files of the credit bureau that pertains to the consumer at the time of the consumer’s request for disclosure within four (4) working days of the request. The credit bureau may impose a reasonable charge for the report, but that charge shall not exceed eight dollars ($8.00) per report. The maximum charge for the report may be raised annually not to exceed the increase in the Consumer Price Index (CPI). The copy shall be furnished without charge if the request for a copy of the report is the result of a consumer being notified that adverse action has been taken on a credit application based on the credit report, provided the request for the report is made within sixty (60) days of receipt of the notice.

History of Section. P.L. 1993, ch. 430, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-23. Disputed credit report.

  1. If the completeness or accuracy of any item of information contained in a consumer’s file is disputed by that consumer, and the dispute is directly conveyed to the credit bureau by the consumer, the credit bureau shall within thirty (30) calendar days reinvestigate the current status of that information unless it has reasonable grounds to believe that the dispute by the consumer is frivolous or irrelevant. If after the reinvestigation that information is found to be inaccurate or can no longer be verified, the credit bureau shall promptly delete that information. The presence of contradictory information in the consumer’s file does not in and of itself constitute reasonable grounds for believing the dispute is frivolous or irrelevant.
  2. If the reinvestigation does not resolve the dispute, the consumer may file a brief statement stating the nature of the dispute. The credit bureau may limit statements of dispute to not more than one hundred (100) words if it provides the consumer with assistance in writing a clear summary of the dispute.
  3. Whenever a statement of dispute is filed, unless there is reasonable grounds to believe that it is frivolous or irrelevant, the credit bureau shall, in any subsequent consumer report containing the information in question, clearly note that it is disputed by the consumer and provide either the consumer’s statement or a clear and accurate codification or summary of that statement.
  4. Following any deletion or correction of information that is found to be inaccurate or whose accuracy can no longer be verified or any notation as to disputed information, the credit bureau shall properly furnish a copy of the corrected credit report to the consumer at no charge, and at the request of the consumer, furnish a copy of the corrected report to any person specifically designated by the consumer who has within two (2) years prior thereto received a credit report for employment purposes, or within six (6) months received a credit report for any other purpose, that contained the deleted, corrected, or disputed information. The credit bureau shall clearly and conspicuously disclose to the consumer his rights to make that request. The disclosure shall be made at or prior to the time the information is deleted or the consumer’s statement regarding the disputed information is received.

History of Section. P.L. 1993, ch. 430, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-24. Registration with secretary of state.

Any credit bureau doing business in this state shall immediately register in the office of the secretary of state and shall state its corporate or company name; agent for service of process; business address; and phone number. Any credit bureau shall notify the office of secretary of state, in writing, of any change in name, agent, address, or telephone number within thirty (30) days of the change.

History of Section. P.L. 1993, ch. 430, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-25. Penalties.

A violation of §§ 6-13.1-21 , 6-13.1-22 or 6-13.1-23 shall constitute a deceptive trade practice for enforcement purposes. Any credit bureau that negligently fails to comply with the requirements imposed under this chapter with respect to any consumer and that does not achieve compliance within three (3) working days of being notified of its noncompliance by the consumer is liable to that consumer in an amount equal to the sum of ten dollars ($10.00) per day for each day of noncompliance, beginning on the fourth day following the date that the credit bureau is notified by the consumer of the noncompliance; provided that there is noncompliance as determined by the court, plus any actual damages sustained by the consumer as a result of the negligent failure; and in the case of any successful action to enforce any provision under this chapter, the costs of the action together with reasonable attorney’s fees as determined by the court.

History of Section. P.L. 1993, ch. 430, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-26. Severability.

If any one or more sections, clauses, sentences or parts of this chapter shall for any reason be adjudged unconstitutional or otherwise invalid in any court, that judgment shall not affect, impair or invalidate the remaining provisions of this chapter but shall be confined in its operation to the specific provisions so held unconstitutional or invalid and the inapplicability or invalidity of any section, clause or provisions of this chapter in any one or more instances or circumstances shall not be taken to affect or prejudice in any way its applicability or validity in any other instance.

History of Section. P.L. 1993, ch. 430, § 1.

6-13.1-27. Employment status information.

A consumer may, at no charge, furnish a statement, sworn and notarized, of any lapse in employment to the credit bureau to become part of the record in the consumer file. This employment information is subject to the provisions of § 6-13.1-23 .

History of Section. P.L. 1995, ch. 59, § 1.

6-13.1-28. Financing of motor vehicles — Term and rate of interest prominently displayed.

  1. Any contract to finance the sale of a motor vehicle shall prominently display the term and rate of interest.
  2. The borrower’s initials or signature shall appear immediately adjacent to the term and to the rate of interest on the loan agreement that shall only serve as an acknowledgement that the borrower has been informed of the terms and rate. The borrower shall also be required to separately sign the loan agreement to bind himself or herself to the contract.
  3. Any agreement to finance a motor vehicle that does not comply with the provision of this section shall be voidable within thirty (30) days at the option of the borrower; provided, however, the borrower shall be responsible for any damage to the vehicle.

History of Section. P.L. 2007, ch. 171, § 1; P.L. 2008, ch. 381, § 1; P.L. 2008, ch. 390, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-29. Furnishing of credit reports.

No credit bureau doing business in this state shall use all or part of a consumer’s social security number as the sole factor when determining whether a credit report in its files matches the identity of a person who is the subject of a credit inquiry from a user of credit reports. When a social security number is used as a factor, a credit bureau may disclose a credit report in its files to an inquiring user of credit reports only if the name and, at a minimum, at least one other identifier such as address; prior address; date of birth; mother’s maiden name; place of employment; or prior place of employment; also match the identity of the person who is the subject of the inquiry.

History of Section. P.L. 2012, ch. 404, § 1; P.L. 2012, ch. 412, § 1; P.L. 2014, ch. 528, § 10.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.1-30. Cash payment for retail purchases.

It shall be a deceptive trade practice in violation of this chapter for any retail establishment offering goods or services for sale to discriminate against a prospective customer by requiring the use of credit for purchase of goods or services. All retail establishments shall accept legal tender currency when offered as payment. Provided, the provisions of this section shall not apply to online purchases or sales made over the internet.

History of Section. P.L. 2019, ch. 47, § 1; P.L. 2019, ch. 78, § 1.

Compiler’s Notes.

P.L. 2019, ch. 47, § 1, and P.L. 2019, ch. 78, § 1 enacted identical versions of this section.

Chapter 13.2 Comparison Price Advertising for Precious Metal and Stones

6-13.2-1. Declaration of policy.

  1. Price comparison advertising is a form of advertising commonly used in the sale or offering for sale of precious metals and stones whereby current prices are compared with former or future prices or other stated values to demonstrate price reductions or cost savings. While price comparisons accurately reflecting market values in the trade area provide consumers with useful information in making value comparisons and market buying decisions, price comparisons based on arbitrary or inflated prices or values can only serve to deceive or mislead. Further abuse occurs when sellers fail to disclose material information essential to consumer understanding of the comparisons made.
  2. The use of arbitrary or inflated price comparisons in violation of this rule as an inducement to the sale of precious metals and stones is injurious to both the consuming public and competitors, and is an unfair trade practice and unfair method of competition.

History of Section. P.L. 1992, ch. 408, § 1.

6-13.2-2. Definitions.

The following words as used in this chapter, unless a different meaning is required by the context or is specifically prescribed, shall have the following meanings:

  1. “Advertisement” means any oral, written, or graphic statement or representation made in connection with the solicitation of business in any manner for the purpose of soliciting a consumer in this state by a seller and includes, without limitation because of enumeration, statements and representations, but does not include price tags or in-store signs, or printed in any sales literature or brochure excepting catalogs. The terms “producer”, “manufacturer”, “wholesaler”, “importer”, or words of similar meaning, mean sellers engaged in resales, not sellers of products or services for consumer, personal, family, or household use or consumption. No price comparison may be made by a seller for precious metal and stones at wholesale, wholesale prices, factory prices, or the like. If the prices for the sale being offered are the net-cost prices retailers usually and customarily pay when they buy that merchandise for resale, sales may be termed net-cost sales and in that event sellers may advertise cost prices providing the substantiation of net-cost prices that are maintained for six (6) months. In no event may retailers, in their departments that sell precious metals or stones, hold themselves or their sale out as wholesalers or as wholesale prices or otherwise;
  2. “Consumer property” means precious metals and stones sold primarily for personal, family, gift, or household use and not for resale or for use or consumption in a trade or business. For purposes of this chapter, “consumer property” includes “merchandise”;
  3. “Date”, as applied to “date on which a price comparison is stated in the advertisement” in newspapers or other printed publications, means either the date of publication or distribution or the date on which the completed advertising copy is submitted to the printer for final printing and publication, provided the submission date does not exceed thirty (30) days from the date of actual publication or distribution;
  4. “Precious metal” means metals that are prized because of chemical and physical properties (notably resistant to corrosion, hardness, strength, and beauty) desirable in jewelry, coinage, and objects of art, and that are at the same time relatively rare or inexpensive. Gold, silver, and the six (6) metals of the platinum group are usually considered precious metals;
  5. “Precious stones” means one of the three (3) traditional categories of natural gemstones, the most valuable, as distinguished from semi-precious and decorative. Diamond, ruby, emerald, sapphire and pearl have long been considered “precious,” but, in accordance with their spiraling prices, alexandrite, black opal, cat’s eye, demantoid, and jadeite are included in this category;
  6. “Price comparison” means the comparison, whether or not expressed wholly or in part in dollars, cents, fractions or percentages, in an advertisement of a seller’s current price for consumer property or services with any other price or statement of value for consumer property, whether or not these prices are actually stated in the advertisement; or, the making of price reductions claims or savings claims with respect to the seller’s current price. The term includes, but shall not be limited to, such comparisons as “fifty percent off ”; “up to seventy percent off ”; “save one-third”; “half-price” sale; “thirty percent to seventy percent off ”; “was twenty dollars, now half price”; “ten-dollar value, now eight dollars”; “was seven dollars now six dollars”; “list price fifty dollars our price twenty-nine dollars”; “clearance price”; or “liquidation price”;
  7. “Sale” means a reduction from the seller’s price at which consumer property is offered to the public for a fixed period of time; and
  8. “Seller” means a person engaged in the sale of consumer property and includes individuals, corporations, partnerships, associations, and any other form of business organization or entity. The term shall not include banks, savings and loan associations, insurance companies, and public utilities.

History of Section. P.L. 1992, ch. 408, § 1; P.L. 2014, ch. 528, § 11.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.2-3. Records of fact.

Any seller advertising products or services in Rhode Island for the purpose of soliciting a consumer in this state in which these advertisements contain representations of statements as to any type of saving claims, including reduced price claims and comparative value claims, shall maintain, for six (6) months, adequate records that disclose the factual basis for these representations or statements and from which the validity of any claims can be established.

History of Section. P.L. 1992, ch. 408, § 1; P.L. 2014, ch. 528, § 11.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.2-4. Price comparison — General.

  1. It shall be an unfair or deceptive act or practice for a seller to make any price comparison:
    1. Based upon a price other than one at which the consumer property was either sold or offered for sale by the seller or a competitor, or will be sold or offered for sale by the seller in the future, in the regular course of business in the trade area in which the price comparison is made;
    2. In which the consumer property materially differs in composition; grade or quality; style or design; model; name or brand; kind or variety; or service and performance characteristics; unless the general nature of the material differences is conspicuously disclosed in the advertisement with the price comparison, or the class of property being offered is similar to but is of superior quality grade, materials, or draftsmanship than the consumer property to which the seller is comparing its product; or
    3. Unless all the material price terms and conditions of any offer that are based upon the purchase of other merchandise are conspicuously disclosed. Those types of offers shall include, but are not limited to “free”; “two for one”; “two-fer”; “half-price sale”; “one cent sale”; “fifty percent off ”; or other similar type of offer.
  2. No price comparison under this section may be made by a seller based on a price that exceeds his or her cost plus normal markup regularly used by him or her in the sale of that property, or consumer property or services of like kind.

History of Section. P.L. 1992, ch. 408, § 1; P.L. 2014, ch. 528, § 11.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.2-5. Price comparison advertisements.

It shall be an unfair or deceptive act or practice for a seller to advertise or make any price comparison:

  1. Based upon a price at which consumer property was sold by the seller unless:
    1. The price is a price at which the consumer property was actually sold in substantial quantities by the seller in the last ninety (90) days immediately preceding the date on which the price comparison is stated in the advertisement; or
    2. The price is a price at which the consumer property was actually sold in substantial quantities by the seller during any other period and the advertisement discloses with the price comparison the date, time, or seasonal period when the sales were made.
  2. Based upon a price at which the seller has offered for sale but has not sold consumer property unless:
    1. The price is the price at which the consumer property was actually offered for sale by the seller for at least four (4) weeks during the last ninety (90) days immediately preceding the date on which the price comparison is stated in the advertisement; or
    2. The price is a price at which the consumer property was actually offered for sale by the seller for at least four (4) weeks during any other ninety-day (90) period and the advertisement clearly discloses the date, time, or seasonal period of that offer.
  3. In which the seller represents that the seller is conducting a “sale” unless:
    1. The termination date of the “sale” is clearly stated in the advertisement; except that this disclosure shall not apply to “clearance”, “closeouts”, “permanent markdown”, or “special purchases” with limited quantities and are advertised as such; and
    2. The day after the “sale” ends, the consumer property reverts in price to the price charged by the seller for the item before the “sale” began or to a price that is higher than the “sale” price, except for “clearance”, “closeout”, or “permanent markdown” sales where the item will be reduced in price until it is removed from sale.
  4. Referencing a higher price at which consumer property will be offered or sold in the future unless:
    1. The advertisement clearly discloses that the price comparison is based upon a future price increase;
    2. The effective date of the future higher price, if more than ninety (90) days after the price comparison is first stated in an advertisement, is clearly disclosed in the advertisement; and
    3. The future higher price increase takes effect on the date disclosed in the advertisement or, if not disclosed in the advertisement, within ninety (90) days after the price comparison is stated in the advertisement, except where compliance becomes impossible because of circumstances beyond the seller’s control.
  5. Based upon advertised savings of a particular percentage or a range of percentages (e.g., “save thirty percent” or “twenty percent to sixty percent off”) unless:
    1. The minimum percent reduction is clearly stated in the advertisement in the manner as conspicuously as the maximum percentage reduction, when applicable;
    2. The basis other than a regular price comparison for the advertised percentage reduction is clearly and conspicuously disclosed in the advertisement.
  6. Based upon the use of the term “original” or “originally”, to fail to disclose that intermediate markdowns have been taken, if that is the case. A seller may use the term “original” or “originally”, when offering a reduction from an original price that was the price at which the consumer property was actually offered for sale in the recent, regular course of business. If the comparative price, identified as “original” or “originally”, is not also the last, previous selling price, that fact shall be disclosed by stating the last, previous selling price, (e.g., “originally $ 599.95, formerly $ 499.95, now $ 399.95”) or indicating “intermediate markdowns taken”.

History of Section. P.L. 1992, ch. 408, § 1; P.L. 2014, ch. 528, § 11.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.2-6. Competitor’s prices.

It shall be an unfair or deceptive act or practice for a seller to make any price comparison:

  1. Based upon a competitor’s price unless:
    1. The competitor’s price is either a price at which the competitor sold or advertised consumer property for sale at any time within the ninety-day (90) period immediately preceding the date on which the price comparison is stated in the advertisement, or the date on which the completed advertising copy was submitted to the printer for final printing and publication, provided each submission date does not exceed eight (8) weeks from the date of actual publication or distribution;
    2. The competitor’s price is a price that is representative of prices at which the consumer property is sold or advertised for sale in the trade area in which the price comparison is made and is not an isolated price; or
    3. Disclosure is made with the price comparison that the price used as a basis for the comparison was not the seller’s own price.
  2. Based upon a “manufacturer’s suggested price”; “distributor’s suggested price”; “list price”; “suggested retail”, or any similar term implying a suggested or list price established by anyone other than the seller, unless either:
    1. The seller has actually offered and sold the consumer property for sale at the suggested price as its regular price; or
    2. The seller can substantiate that it is the actual price at which the consumer property was being offered for sale by representative retailers in the trade area in which the claim is made at any time within the ninety-day (90) period immediately preceding either the date on which the price comparison is stated in the advertisement; the comparative price is for property of same composition, grade or quality, style or design, model, name or brand, kind or variety; or the date on which the completed advertising copy was submitted to the printer for final printing and publication, provided the submission date does not exceed eight (8) weeks from the date of actual publication or distribution.

History of Section. P.L. 1992, ch. 408, § 1; P.L. 2014, ch. 528, § 11.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.2-7. Retail price labels.

A price label or tag permanently imprinted on or affixed to consumer property or its container by the manufacturer or supplier (“preticketed price”) and not under control of the retail seller or instigated by him or her or that is required to be attached to consumer property under federal law, need not be covered, obliterated, or removed for purposes of compliance with this statute, unless that item was actually sold at that labeled price in not insubstantial quantities on a substantial basis:

  1. When the retail seller’s current offering price is attached to, printed on, or placed on a label, tag, or sign accompanying the consumer property, provided no price comparison is made by the retail seller based solely on the manufacturer’s price thereon unless the comparison would be valid based on past sales records; or
  2. When the retail seller’s original offering price attached to, printed on, or placed on a label, tag, or sign accompanying the consumer property, is identical to the preticketed price.

History of Section. P.L. 1992, ch. 408, § 1; P.L. 2014, ch. 528, § 11.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.2-8. Penalty — Enforcement.

Whoever violates the provisions of this chapter may be enjoined from doing so by an action brought by the attorney general, or any aggrieved party, and shall be punished by a fine of not less than five hundred dollars ($500) for each separate advertised infraction.

History of Section. P.L. 1992, ch. 408, § 1.

Chapter 13.3 Environmental Marketing Act

6-13.3-1. Declaration of policy.

  1. It is the public policy of the state that environmental marketing claims, whether explicit or implied, must be substantiated by competent and reliable evidence so as not to deceive or mislead consumers about the environmental impact of products and packages.
  2. Accurate and useful information about the environmental impact of products and packages must be made available to consumers. The uniform standards for environmental marketing claims, as contained in the Federal Trade Commission guidelines for environmental marketing claims are hereby adopted by the state of Rhode Island.

History of Section. P.L. 1995, ch. 326, § 1; P.L. 2014, ch. 528, § 12.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.3-2. Deceptive environmental marketing claims.

It is unlawful for any person, in the course of that person’s business, vocation or occupation, to make any untruthful, deceptive, or misleading environmental marketing claims about a product or package sold or offered for sale in this state. For the purposes of this chapter, “person” means any individual, corporation, partnership, or other legal entity.

History of Section. P.L. 1995, ch. 326, § 1; P.L. 2014, ch. 528, § 12.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.3-3. Remedies.

  1. If the attorney general has probable cause to believe that a person is violating or has violated § 6-13.3-2 , the attorney general may bring suit in the name of Rhode Island in the appropriate court to restrain that person from further violations of that section.
  2. Before filing a suit under subsection (a) of this section, the attorney general shall, in writing, notify the person charged with the alleged violation of the alleged unlawful conduct and the relief to be sought. No suit shall be brought by the attorney general until thirty (30) days after that notice.
  3. The court may award reasonable attorney fees at trial and on appeal to a prevailing party in a suit brought under this section.

History of Section. P.L. 1995, ch. 326, § 1; P.L. 2014, ch. 528, § 12.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-13.3-4. Defenses.

It shall be a defense to any suit brought under this chapter that the person’s environmental marketing claims conform to the standards or are consistent with the examples contained in the guides for use of environmental marketing claims published by the Federal Trade Commission July 27, 1992.

History of Section. P.L. 1995, ch. 326, § 1; P.L. 2014, ch. 528, § 12.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 14 Closing Out Sales

6-14-1. “Person” defined.

As used in this chapter, “person” includes individuals, partnerships, voluntary associations, and corporations.

History of Section. P.L. 1956, ch. 3762, § 11; G.L. 1956, § 6-14-1 .

6-14-2. Repealed.

History of Section. P.L. 1956, ch. 3762, § 1; G.L. 1956, § 6-14-2 ; Repealed by P.L. 1966, ch. 137, § 2.

Compiler’s Notes.

Former § 6-14-2 concerned acceptance of this chapter by cities and towns.

6-14-3. License required for sale.

No person shall offer for sale a stock of goods, wares, and merchandise under the description of “closing-out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling-out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or other designation of like meaning, or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, unless he or she shall have first obtained a license to conduct a sale from the clerk of the city or town in which he or she proposes to conduct a sale.

History of Section. P.L. 1956, ch. 3762, § 2; G.L. 1956, § 6-14-3 ; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-4. Application for license.

The applicant for a license shall make an application to the clerk, in writing and under oath, at least fourteen (14) days prior to the opening date of the sale, showing all the facts in regard to the “closing out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or other designation of like meaning, or in regard to the damage caused to the goods, wares, and merchandise by fire, smoke, water, or otherwise, and showing all the facts in regard to the sale that the applicant proposes to conduct and the place and manner of conducting the sale including an inventory of the goods, wares, and merchandise to be sold at the sale, which inventory shall contain only goods, wares, and merchandise actually in the place of business in or at which the sale is to be conducted at the time of the application together with the established retail price of the goods, wares, and merchandise, and a statement, as far as possible, of the names of the persons from whom the goods, wares, and merchandise to be sold were obtained; the date of the delivery of the goods, wares and merchandise to the person applying for the license; and the place from which the goods, wares, and merchandise were last taken; and all details to fully identify the goods, wares, and merchandise to be sold. The application shall specify the proposed period of time over which the sale shall continue, which period shall not exceed sixty (60) days; provided, that if it shall be made to appear upon sworn application to the city or town clerk, at any time during the period of sixty (60) days, that all of the goods, wares, and merchandise described and inventoried in the original application have not been sold and if upon the application it is accompanied by a statement of inventory of what remains, a license supplemental to the one provided for in § 6-14-6 shall be issued by the clerk upon the same terms and conditions as the original license granting authority to continue the sale for a period of only thirty (30) days. The original application shall also specify whether the applicant proposes to advertise or conduct the sale as a “closing out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or other designation of like meaning, or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise.

History of Section. P.L. 1956, ch. 3762, § 2; G.L. 1956, § 6-14-4 ; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-5. False statements as perjury.

Any person making a false statement in the application provided for in § 6-14-4 shall, upon conviction, be deemed guilty of perjury.

History of Section. P.L. 1956, ch. 3762, § 4; G.L. 1956, § 6-14-5 .

Cross References.

Penalty for perjury, § 11-33-2 .

6-14-6. Issuance of license — Bond — Change of ownership.

If the clerk shall be satisfied from the application that the proposed sale is of the character that the applicant desires to conduct and advertise, the clerk shall issue a license, upon the payment of the fee of one hundred dollars ($100), together with a good and sufficient bond payable to the city or town in the penal sum of one thousand dollars ($1,000) with sureties approved by a justice of the district court whose judicial district is situated in the city or town in which the sale is to be conducted, conditioned upon compliance with §§ 6-14-3 and 6-14-4 and other pertinent sections of this chapter, to the person applying for the license, authorizing him or her to advertise and conduct a sale of the particular kind mentioned in the application, according to the requirements of this chapter; provided, that, after a change in the ownership of the whole of the goods, wares, and merchandise, or of the entire balance in case a portion has already been sold, no person shall carry on the sale until the new owner of the goods, wares, and merchandise or balance of the goods, wares, and merchandise shall have obtained from the city or town clerk the license required by § 6-14-3 in the manner previously provided; provided further, however, that any merchant who shall have been conducting a business in the same location where the sale is to be held for a period of at least one full year, prior to the holding of the sale, shall be exempted from the payment of the fee and the filing of the bond provided for in this section.

History of Section. P.L. 1956, ch. 3762, § 2; G.L. 1956, § 6-14-6 ; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-7. Record of license application.

Every city or town clerk to whom application is made as provided for in § 6-14-4 shall endorse upon the application the date of its filing; shall preserve the application as a record of this office; and shall make an abstract of the facts stated in the application in a book kept for that purpose, properly indexed, containing the name of the person asking for the license; the nature of the proposed sale; the place where the sale is to be conducted; its duration; the inventory value of the goods, wares, and merchandise to be sold; and a general statement as to where the goods, wares, and merchandise came from, and shall make in the book a notation as to the issuance or refusal of that license applied for together with the date of the issuance or refusal; and shall endorse on the application the date the license is granted or refused, and the application and abstract shall be prima facie evidence of all statements therein contained. A copy of the application shall be forwarded by the city or town clerk to the office of the department of the attorney general.

History of Section. P.L. 1956, ch. 3762, § 3; G.L. 1956, § 6-14-7 ; P.L. 1977, ch. 143, § 1; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-8. Acts authorized by license.

The license as provided for in §§ 6-14-3 6-14-6 shall be valid only for a sale of the goods, wares, and merchandise inventoried and described in the application for the license, in the manner and at the time and place mentioned and presented in the application, and any advertising relating to the sale shall prominently state the designation of the sale as contained in the license granted; the final date of the sale; and the license number. No license shall thereafter issue for conducting a sale of any goods, wares, and merchandise that have been removed from the place of sale inventoried and described in the application for the license under the provisions of this chapter at any other place or places.

History of Section. P.L. 1956, ch. 3762, § 5; G.L. 1956, § 6-14-8 ; P.L. 1977, ch. 143, § 2; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-9. Additions to stock in contemplation of sale.

No person, in contemplation of conducting a “closing-out-sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or a sale of other designation of like meaning; or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, under a license as provided for in §§ 6-14-3 6-14-6 , shall order any goods, wares, or merchandise for the purpose of selling and disposing of the goods, wares, or merchandise at the sale, and any unusual purchase and additions to the stock of the goods, wares, and merchandise within thirty (30) days prior to the filing of the application for license to conduct the sale mentioned in § 6-14-3 shall be presumptive evidence that the purchases and additions to stock were made in contemplation of the sale and for the purpose of selling the purchases and additions to stock at the sale.

History of Section. P.L. 1956, ch. 3762, § 6; G.L. 1956, § 6-14-9 ; P.L. 1966, ch. 137, § 1; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Evidence.

Even though a trial justice in a bench trial misinterpreted R.I. Gen. Laws § 6-14-9 by failing to acknowledge that goods purchased outside the 30-day period prior to applying for a going out of business (GOB) permit could be evidence of a violation of the statute, the error was harmless because the plaintiff did not submit evidence of the GOB company’s stock prior to and during the GOB sale. A judgment against plaintiff on its claim under the statute was proper. V. George Rustigian Rugs, Inc. v. Renaissance Gallery, Inc., 853 A.2d 1220, 2004 R.I. LEXIS 131 (2004).

6-14-10. Additions during sale.

No person carrying on or conducting a “closing-out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or a sale of other designation of like meaning; or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, under a license as provided for in §§ 6-14-3 6-14-6 shall, during the continuance of the sale, for the purpose of selling and disposing of the goods, wares, and merchandise at the sale, add any goods, wares, and merchandise to the stock of goods, wares, or merchandise described and inventoried in the original application for the license, and no goods, wares, or merchandise described and inventoried in the original application, and each addition of goods, wares, or merchandise to the stock of goods, wares, or merchandise described and inventoried in the application, for the purpose of selling and disposing of the goods, wares, and merchandise at the sale, and each sale of the goods, wares, and merchandise at the sale, that were not inventoried and described in the application, shall constitute a separate offense under this chapter.

History of Section. P.L. 1956, ch. 3762, § 7; G.L. 1956, § 6-14-10 ; P.L. 1966, ch. 137, § 1; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-11. Continuance of business after expiration of license.

Any person who, under the provisions of this chapter, conducts a “closing-out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or a sale of other designation of like meaning; or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, beyond the date specified by the sale, or who upon conclusion of the sale: (1) Continues that business that had been represented as “closing out,” or “going out of business,” or by similar designation as described in this chapter; or (2) Having discontinued the business, resumes the business within one year from the expiration date of the license for the sale provided for in this chapter, under the same name, or under a different name, at the same location, or elsewhere in the same city or town where the inventory for the sale was filed, or who, upon conclusion of the sale, continues business contrary to the designation of the sale; shall be deemed guilty of a misdemeanor and shall, upon conviction, be fined in a sum not less than fifty dollars ($50.00) nor more than five hundred dollars ($500) or shall be imprisoned for not less than ten (10) days nor more than six (6) months, or both, within the discretion of the court.

History of Section. P.L. 1956, ch. 1956, § 8; G.L. 1956, § 6-14-11 ; P.L. 1966, ch. 137, § 1; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-11.1. Purchase of stock or inventory following a sale.

  1. It shall be unlawful for any person who purchases from another the remaining stock or inventory or a portion of the stock or inventory remaining from a “closing-out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or other designation of like meaning; or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise; or who purchases stock or inventory from a person who no longer sells similar merchandise at the same location; to engage in the following conduct:
    1. To advertise that the stock previously belonging to the original person or business is being offered for sale unless it is clearly stated what portion of the total merchandise as a percentage of the total dollar value of the entire inventory being offered for sale is the goods that were purchased from the original person or business.
    2. To offer for sale stock previously belonging to the original person or business along with additional merchandise unless items belonging to the original person or business are clearly labeled as such.
  2. Any person who shall violate the provisions of this section shall be deemed guilty of a misdemeanor, and shall, upon conviction, be fined in the sum of not less than fifty dollars ($50.00) nor more than five hundred dollars ($500), or shall be imprisoned for not less than ten (10) days nor more than six (6) months, or both, within the discretion of the court. In lieu of, or in addition to the penalty previously provided in this subsection, the court may order the defendant to pay to the court a sum not to exceed five hundred dollars ($500) for the purpose of paying for an advertisement, prepared by the department of the attorney general, for placement in Rhode Island newspapers, pointing out the violation(s) of this section as presented in the false advertising, provided that the advertisement shall not indicate the name or address of the person convicted under the provisions of this section.

History of Section. P.L. 1980, ch. 101, § 1; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-12. Unlicensed sales.

Any person who shall advertise, represent, or hold out for sale a stock of goods, wares, and merchandise under the description of “closing-out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or other designation of like meaning; or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, without first having complied with the provisions of this chapter, shall be deemed guilty of a misdemeanor and shall, upon conviction, be fined in a sum not less than fifty dollars ($50.00) nor more than five hundred dollars ($500), or shall be imprisoned for not less than ten (10) days nor more than six (6) months, or both, within the discretion of the court.

History of Section. P.L. 1956, ch. 3762, § 9; G.L. 1956, § 6-14-12 ; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-13. Penalty for violations generally.

Any person who shall hold, conduct, or carry on any sale of goods, wares, or merchandise under the description of “closing-out sale”; “going-out-of-business sale”; “discontinuance-of-business sale”; “selling out”; “liquidation”; “lost our lease”; “must vacate”; “forced out”; “removal”; or other designation of like meaning; or a sale of goods, wares, and merchandise damaged by fire, smoke, water, or otherwise, contrary to the provisions of this chapter, or who shall violate any of the provisions of this chapter, shall be deemed guilty of a misdemeanor and shall, upon conviction, be fined in the sum of not less than fifty dollars ($50.00) nor more than five hundred dollars ($500), or shall be imprisoned for not less than ten (10) days nor more than six (6) months, or both, within the discretion of the court. In lieu of, or in addition to, the penalty previously provided in this section, the court may order the defendant to pay to the court a sum not to exceed five hundred dollars ($500) for the purpose of paying for an advertisement, prepared by the department of the attorney general, for placement in Rhode Island newspapers, pointing out the violation(s) of this chapter as presented in the false advertising, provided that the advertisement shall not indicate the name or address of the person convicted under the provisions of this chapter.

History of Section. P.L. 1956, ch. 3762, § 10; G.L. 1956, § 6-14-13 ; P.L. 1977, ch. 143, § 3; P.L. 2014, ch. 528, § 13.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-14-14. Enforcement in equity.

Upon complaint of any person, the superior court shall have jurisdiction in equity to restrain and enjoin any act forbidden or declared illegal by any provisions of §§ 6-14-3 6-14-13 . In addition the court may award the complainant reasonable attorneys’ fees and may impose a civil penalty of one hundred thousand dollars ($100,000).

History of Section. P.L. 1956, ch. 3762, § 13; G.L. 1956, § 6-14-14 ; P.L. 1994, ch. 206, § 1.

6-14-15. Exemption of public officers and acts under judicial authority.

The provisions of this chapter with the exception of §§ 6-14-9 and 6-14-10 shall not apply to sheriffs, constables, or other public or court officers, or to any other person or persons acting under the license, direction, or authority of any court, state or federal, selling goods, wares, or merchandise in the course of their official duties.

History of Section. P.L. 1956, ch. 3762, § 12; G.L. 1956, § 6-14-15 ; P.L. 1994, ch. 206, § 1.

6-14-16. Failure to comply.

Failure to comply with the provisions of this chapter shall constitute an unfair method of competition and an unfair or deceptive act or practice under chapter 13.1 of this title, entitled “Deceptive Trade Practices”, and the penalties and remedies provided in that chapter shall apply against any individual, corporation, or partnership violating any provision of this section.

History of Section. P.L. 1977, ch. 143, § 4.

Repealed Sections.

The former section (P.L. 1956, ch. 3762, § 14; G.L. 1956, § 6-14-16 ), concerning towns not accepting this chapter, was repealed by P.L. 1966, ch. 166, § 2.

Chapter 15 Accounts Receivable [Repealed.]

6-15-1. [Transferred.]

Transferred Sections.

This section (P.L. 1908, ch. 1596, §§ 1, 2; G.L. 1909, ch. 184, §§ 1, 2; G.L. 1923, ch. 210, §§ 1, 2; G.L. 1938, ch. 384, §§ 1, 2; G.L. 1956, §§ 6-15-1 ), concerning receipt of instalment payments, was transferred to § 11-9.1-1 by P.L. 1969, ch. 43.

6-15-2. Repealed.

History of Section. P.L. 1943, ch. 1345, § 1; G.L. 1956, § 6-15-2 ; Repealed by P.L. 1960, ch. 147, § 2.

Compiler’s Notes.

Former § 6-15-2 concerned assignments of accounts receivable, was repealed by P.L. 1960, ch. 147, § 2. For present provisions of law, see Uniform Commercial Code, § 6A-9-318 .

Chapter 16 Uniform Voidable Transactions Act

6-16-1. Definitions.

As used in this chapter:

  1. “Affiliate” means:
    1. A person who directly or indirectly owns, controls, or holds with power to vote twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
      1. As a fiduciary or agent without sole discretionary power to vote the securities; or
      2. Solely to secure a debt, if the person has not exercised the power to vote;
    2. A corporation, twenty percent (20%) or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the debtor or a person who directly or indirectly owns, controls, or holds, with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
      1. As a fiduciary or agent without sole power to vote the securities; or
      2. Solely to secure a debt, if the person has not in fact exercised the power to vote;
    3. A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or
    4. A person who operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets.
  2. “Asset” means property of a debtor, but the term does not include:
    1. Property to the extent it is encumbered by a valid lien;
    2. Property to the extent it is generally exempt under nonbankruptcy law; or
    3. An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant.
  3. “Claim” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
  4. “Creditor” means a person who has a claim.
  5. “Debt” means liability on a claim.
  6. “Debtor” means a person who is liable on a claim.
  7. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
  8. “Insider” includes:
    1. If the debtor is an individual:
      1. A relative of the debtor or of a general partner of the debtor;
      2. A partnership in which the debtor is a general partner;
      3. A general partner in a partnership described in subsection (8)(i)(B); or
      4. A corporation of which the debtor is a director, officer, or person in control;
    2. If the debtor is a corporation:
      1. A director of the debtor;
      2. An officer of the debtor;
      3. A person in control of the debtor;
      4. A partnership in which the debtor is a general partner;
      5. A general partner in a partnership described in subsection (8)(ii)(D); or
      6. A relative of a general partner, director, officer, or person in control of the debtor;
    3. If the debtor is a partnership:
      1. A general partner in the debtor;
      2. A relative of a general partner in, a general partner of, or a person in control of the debtor;
      3. Another partnership in which the debtor is a general partner;
      4. A general partner in a partnership described in subsection (8)(iii)(C); or
      5. A person in control of the debtor;
    4. An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and
    5. A managing agent of the debtor.
  9. “Lien” means a charge against, or an interest in, property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement; a judicial lien obtained by legal or equitable process or proceedings; a common-law lien; or a statutory lien.
  10. “Organization” means a person other than an individual.
  11. “Person” means an individual, estate, partnership, association, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal or commercial entity.
  12. “Property” means anything that may be the subject of ownership.
  13. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium, and retrievable in perceivable form.
  14. “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.
  15. “Sign” means with present intent to authenticate or adopt a record:
    1. To execute or adopt a tangible symbol; or
    2. To attach to or logically associate with the record an electronic symbol, sound, or process.
  16. “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance.
  17. “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 1992, ch. 9, § 5; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Repealed Sections.

The former section (G.L. 1896, ch. 202, § 1; G.L. 1909, ch. 253, § 1; G.L. 1923, ch. 297, § 1; G.L. 1938, ch. 482, § 1; G.L. 1956, § 6-16-1 ), concerning fraudulent conveyances, was repealed by P.L. 1986, ch. 438, § 1, effective June 25, 1986. Section 2 of P.L. 1986, ch. 438 enacted the present chapter concerning the same subject matter.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

Cross References.

Concealment or transfer of property with intent to defraud creditors, penalty, § 11-18-25 .

Conveyances between husband and wife, § 15-4-4 .

Employer not insured for workers’ compensation, fraudulent conveyance by, § 28-36-16 .

Execution against the body, § 9-25-15 .

Fraudulent retention of possession of goods by seller, § 6A-2-402 .

Insurance premiums paid in fraud of creditors, § 27-4-11 .

Comparative Legislation.

Fraudulent conveyances:

Conn. Gen. Stat. § 52-552a et seq.

Mass. Ann. Laws ch. 109A, § 1 et seq.

NOTES TO DECISIONS

Assignment for Benefit of Creditors.

An assignment for the benefit of creditors is not void under this section if it attempts to appropriate assigned property to pay creditors who have released their claims without payment under a prior assignment, although the court will direct that nothing be paid from the assigned funds to the released creditors. Nightingale v. Harris & Lippitt, 6 R.I. 321 , 1859 R.I. LEXIS 49 (1859).

The statute is not violated by an assignment for the benefit of creditors merely because the instrument does not purport to assign all of the debtor’s property if, in fact, the assignment does convey all of his property. Nightingale v. Harris & Lippitt, 6 R.I. 321 , 1859 R.I. LEXIS 49 (1859).

A purported assignment for the benefit of creditors made for the purpose of postponing payment of creditors for the benefit of the assignor is fraudulent and void. Gardner v. Commercial Nat'l Bank, 13 R.I. 155 , 1880 R.I. LEXIS 71 (1880).

Assignment for benefit of creditors which showed on its face that it was for the benefit of the assignors in preventing the sacrifice of their property while tending to hinder and defraud creditors, and giving the assignees the power to carry on the business as long as they deemed advisable, was prima facie fraudulent and void. Gardner v. Commercial Nat'l Bank, 13 R.I. 155 , 1880 R.I. LEXIS 71 (1880).

Where the debtor has unreservedly assigned his entire estate for the benefit of creditors, the transfer cannot be held to be fraudulent. Austin v. A. & W. Sprague Mfg. Co., 14 R.I. 464 , 1884 R.I. LEXIS 31 (1884).

An assignment which operated merely as a preference of certain creditors over others was not fraudulent. Perkins v. Hutchinson, 17 R.I. 450 , 22 A. 1111, 1891 R.I. LEXIS 51 (1891).

Bankruptcy Proceedings.

Trustee in bankruptcy, being subrogated to the rights of the creditors, could proceed under this section to set aside fraudulent conveyance of stock made by debtor outside the period under which he could set aside fraudulent conveyances under the Bankruptcy Act. Doyle v. Heath, 22 R.I. 213 , 47 A. 213, 1900 R.I. LEXIS 82 (1900).

Where creditor by original writ attached property fraudulently conveyed by debtor, obtained judgment and levied on such property, which was sold and conveyed to creditor, creditor acquired an interest at the time of the attachment which ripened into title at the time of delivery of the sheriff’s deed to him, so that his title was unaffected by the fact that debtor was adjudged a bankrupt more than ten months after delivery of the deed, where such bankruptcy proceedings were not begun within four months after the attachment. Tucker v. Denico, 26 R.I. 560 , 59 A. 920, 1905 R.I. LEXIS 3 (1905).

Although the bankruptcy court had no authority to issue an injunction to prevent a resolution trust company from foreclosing on real property which the debtor had allegedly fraudulently transferred, because the trustee’s fraudulent conveyance cause of action constituted property of the estate with potential value for creditors, the foreclosure sale of the property was stayed under 11 U.S.C. § 362. McGowan v. Ciccone (In re Ciccone), 171 B.R. 4, 1994 Bankr. LEXIS 1320 (Bankr. D.R.I. 1994).

Rhode Island Supreme Court would apply the Uniform Fraudulent Transfer Act as written, and would not adopt the Ninth Circuit rule exempting “above-board” leveraged buyouts (LBOs) from the constructive fraudulent transfer provisions, and deny standing to post-LBO creditors in “well-publicized” LBOs. Zahn v. Yucaipa Capital Fund, 218 B.R. 656, 1998 U.S. Dist. LEXIS 2266 (D.R.I. 1998).

As to fraudulent transfer counts pursuant to the Rhode Island Uniform Fraudulent Transfer Act, R.I. Gen. Laws § 6-16-1 et seq., Chapter 7 debtors were not entitled to summary judgment because the trustee properly filed her complaint within two years of the petition date pursuant to 11 U.S.C.S. § 546. Ferrara v. Cabrera (In re Cabrera), 2012 Bankr. LEXIS 266 (Bankr. D.R.I. Jan. 20, 2012).

Chapter 7 trustee was not entitled to summary judgment on fraudulent transfer grounds pursuant to the Rhode Island Uniform Fraudulent Transfer Act, R.I. Gen. Laws § 6-16-1 et seq., because the issues of the existence of a creditor and the insolvency of the debtors at the time of transfer were necessary to the full adjudication of the issues in this dispute. Ferrara v. Cabrera (In re Cabrera), 2012 Bankr. LEXIS 266 (Bankr. D.R.I. Jan. 20, 2012).

Where creditor’s complaint did not allege any misrepresentations by a Chapter 13 debtor, but rather alleged as grounds for nondischargeability the debtor’s actual fraud based upon her violation of the Rhode Island Uniform Fraudulent Transfer Act, this was not sufficient to survive debtor’s motion to dismiss because actual fraud under the Bankruptcy Code nondischargeability provision carried the elements of fraudulent misrepresentation found in common law and, in the First Circuit, a misrepresentation by the debtor to the creditor was an essential element for establishing nondischarge of debt. Sauer Inc. v. Lawson (In re Lawson), 505 B.R. 117, 2014 Bankr. LEXIS 438 (Bankr. D.R.I. 2014), vacated, 791 F.3d 214, 2015 U.S. App. LEXIS 11366 (1st Cir. 2015).

Burden of Proof.

Person asserting the invalidity of conveyance had the burden of establishing that the conveyance was without consideration or in violation of the statute. Faiella v. Tortolani, 76 R.I. 488 , 72 A.2d 434, 1950 R.I. LEXIS 24 (1950).

Conditional Transfers.

Even if the defendant had delivered certain treasury checks to his mother on the condition that she return the funds if he needed them in the future, the transaction was still a “transfer” within the meaning of subsection ( l ); to construe the statute as the defendant urged would allow debtors to place their assets beyond the reach of creditors simply by conditionally transferring them to relatives, which would undermine the statute’s very purposes and render it ineffectual. Rhode Island Depositors' Economic Protection Corp. v. Mollicone, 677 A.2d 1337, 1996 R.I. LEXIS 174 (1996).

Conveyances in Consideration of Marriage.

A bona fide antenuptial conveyance of a reasonable amount of property in consideration of marriage is supported by a valuable consideration and is valid against existing as well as subsequent creditors. National Exch. Bank v. Watson, 13 R.I. 91 , 1880 R.I. LEXIS 47 (1880).

To make an antenuptial settlement void as a fraud upon creditors, it is necessary that both parties should concur in or have cognizance of the intended fraud. National Exch. Bank v. Watson, 13 R.I. 91 , 1880 R.I. LEXIS 47 (1880).

Determining Validity of Conveyances.

In administering the statute three rules are recognized:

  1. The purpose of a deed may be so written into it that it can neither be read or carried into effect without disclosing a fraud incapable of explanation or defense; its provisions may be so inconsistent with real honesty as to be referable only to a fraudulent intent
  2. Provisions not thus radically, but only apparently or prima facie, dishonest may be explained by the circumstances of the execution of the deed tending to remove the inference of fraud
  3. A deed unimpeachable on its face may be shown to be contrived of fraud by the facts which induced it. Austin v. A. & W. Sprague Mfg. Co., 14 R.I. 464 , 1884 R.I. LEXIS 31 (1884); Tucker v. Denico, 26 R.I. 560 , 59 A. 920, 1905 R.I. LEXIS 3 (1905).

The validity of a conveyance allegedly in fraud of creditors is to be determined not by the debtor’s intention, even if honest, but by the effect on the creditor’s right of recovery. Tanner v. Whitney, 52 R.I. 391 , 161 A. 122, 1932 R.I. LEXIS 70 (1932).

The person asserting the invalidity of a conveyance pursuant to this section has the burden of establishing that it was without consideration. Warwick Mun. Employees Credit Union v. Higham, 106 R.I. 363 , 259 A.2d 852, 1969 R.I. LEXIS 636 (1969).

Where parents of borrower signed his note as comakers and loan allegedly was made partly on strength of land owned by parents, and parents later, shortly before borrower filed petition in bankruptcy, transferred land to another son purportedly for his promise to support them, question with regard to fraudulent intent is not whether it was parents’ intent to put their property out of reach of lender but rather whether such a conveyance had the effect of depriving lender of a right which would have been legally effective had the conveyance not been made, especially since record showed no other means of parents to pay lender. Warwick Mun. Employees Credit Union v. Higham, 106 R.I. 363 , 259 A.2d 852, 1969 R.I. LEXIS 636 (1969).

Where defendant conveyed certain real estate to wife’s father a week before judgment was rendered against him, evidence showed such conveyance to have been in payment for a valid antecedent debt and it did not constitute a fraudulent conveyance. Ducharme v. Champagne, 110 R.I. 270 , 292 A.2d 224, 1972 R.I. LEXIS 909 (1972).

Domestic Proceedings.

Wife could not maintain bill in equity to set aside a sale made by the husband while he was the respondent in a divorce suit and under injunction therein not to convey such property. Picerne v. Redd, 72 R.I. 4 , 47 A.2d 906, 1946 R.I. LEXIS 33 (1946).

Evidence.

Proof that conveyance is fraudulent may and usually does rest upon circumstantial evidence, so that proof of the acts of the debtor and his general conduct with reference to his property may be admissible, even though not immediately connected with and a part of the particular transaction which is questioned. Sarle v. Arnold, 7 R.I. 582 , 1863 R.I. LEXIS 39 (1863).

Where statute requiring that to void a conveyance as fraudulent, proof that conveyance had been made with intent or purpose to delay, hinder or defraud creditors of their just demands must be established, the mere establishment by a plaintiff that a conveyance was made by an insolvent debtor without consideration does not give rise to presumption that it was fraudulent. Ducharme v. Champagne, 110 R.I. 270 , 292 A.2d 224, 1972 R.I. LEXIS 909 (1972).

Fraud Within Meaning of Statute.

Fraud is the gist of an inquiry under the statute and it must appear either from the nature of the transaction or the intent of the parties. Austin v. A. & W. Sprague Mfg. Co., 14 R.I. 464 , 1884 R.I. LEXIS 31 (1884); Tucker v. Denico, 26 R.I. 560 , 59 A. 920, 1905 R.I. LEXIS 3 (1905).

A conveyance made with the intention of preventing the creditors of the grantor from collecting their debts would constitute actual fraud and would be in fraud of creditors even if made for a valuable consideration. Thornley Supply Co. v. Madigan, 48 R.I. 271 , 137 A. 385, 1927 R.I. LEXIS 57 (1927), modified, 51 R.I. 310 , 154 A. 277, 1931 R.I. LEXIS 40 (1931).

In proceeding by creditor of husband to set aside deed executed in favor of wife, based on allegation of actual fraud on the part of the wife, wherein it was determined that the proof did not establish any actual fraud, the question of whether there was legal consideration for the deed or whether constructive fraud was established could not be considered. Thornley Supply Co. v. Madigan, 48 R.I. 271 , 137 A. 385, 1927 R.I. LEXIS 57 (1927), modified, 51 R.I. 310 , 154 A. 277, 1931 R.I. LEXIS 40 (1931).

This statute does not require proof of fraud in fact. Savoie v. Pion, 52 R.I. 422 , 161 A. 219, 1932 R.I. LEXIS 85 (1932).

Conveyance by husband of interest in realty to wife without valuable consideration, while insolvent and with notice of existing creditor’s just claim and threatened suit, with intent to hinder, delay and defraud such creditor, was fraudulent and void as to creditors. Sherman v. Rhode Island Hosp. Trust Co., 68 R.I. 525 , 30 A.2d 498, 1943 R.I. LEXIS 8 (1943).

A showing that there was adequate consideration for the sale of property retained by a vendor tends to rebut presumption of fraud that arises from its retention. Andrews v. Lorraine Dance Studios, 96 R.I. 133 , 189 A.2d 802, 1963 R.I. LEXIS 58 (1963).

Error on the part of the trial justice was not established by the petitioner where trial justice found that the purported transfer was intended to defraud creditors of the dance studio and denied the petition for reclamation where vendor retained possession of the property. Andrews v. Lorraine Dance Studios, 96 R.I. 133 , 189 A.2d 802, 1963 R.I. LEXIS 58 (1963).

In answer to the challenge of the principal receiver of the right of vendee to reclaim the furniture on the ground that it tended to hinder and defraud creditors of vendor, a subsidiary of the vendee, the well settled rule was set forth that the retention of possession of property by the vendor thereof constitutes presumptive evidence of fraud in such transaction under consideration. Andrews v. Lorraine Dance Studios, 96 R.I. 133 , 189 A.2d 802, 1963 R.I. LEXIS 58 (1963).

This section does not require proof of fraud in fact. Warwick Mun. Employees Credit Union v. Higham, 106 R.I. 363 , 259 A.2d 852, 1969 R.I. LEXIS 636 (1969).

To recover under this section, it was not necessary to show fraud and deceit at time note was signed; the important date is the date of conveyance. Warwick Mun. Employees Credit Union v. Higham, 106 R.I. 363 , 259 A.2d 852, 1969 R.I. LEXIS 636 (1969).

Where parents of borrower signed his note as comakers and loan was made partly on strength of land owned by parents; where parents later, shortly before borrower filed petition in bankruptcy, transferred land to another son purportedly for his promise to support them; and where there was no showing that parents had means other than the land to pay lender, conclusion of trial court that conveyance was in violation of this section was affirmed. Warwick Mun. Employees Credit Union v. Higham, 106 R.I. 363 , 259 A.2d 852, 1969 R.I. LEXIS 636 (1969).

Jurisdiction of Courts.

Equity and law have concurrent jurisdiction in matters of fraudulent conveyances. Belcher v. Arnold, 14 R.I. 613 , 1885 R.I. LEXIS 2 (1885); Tucker v. Denico, 26 R.I. 560 , 59 A. 920, 1905 R.I. LEXIS 3 (1905); Carroll v. Salisbury, 28 R.I. 16 , 65 A. 274, 1906 R.I. LEXIS 3 (1906); Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

Where plaintiff had recovered a judgment in tort against a person who, after the action was started, made a voluntary conveyance of his real estate, it was proper for plaintiff to file a bill in equity to set aside the conveyance as being a fraudulent conveyance without first having an execution returned unsatisfied, since the equitable jurisdiction is invoked in aid of an action at law and depends not on the return of the execution unsatisfied, but on the levy of the execution which gave the lien. McKenna v. Crowley, 16 R.I. 364 , 17 A. 354, 1888 R.I. LEXIS 73 (1888).

Creditor of intestate was not obligated to obtain a judgment at law before proceeding in equity to have alleged fraudulent conveyance of deceased set aside. Gardner v. Gardner, 17 R.I. 751 , 24 A. 785, 1892 R.I. LEXIS 80 (1892).

Property fraudulently conveyed within the meaning of this section is subject to judgment and execution in action at law by creditor of the grantor. Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

Where a debtor was unable to pay his debts, it was not necessary for the creditor to have an execution returned unsatisfied in order to bring a suit in equity against grantee to set aside a transfer in fraud of creditors. Tanner v. Whitney, 52 R.I. 391 , 161 A. 122, 1932 R.I. LEXIS 70 (1932).

Laches of Creditors.

Creditor was not guilty of laches in delay in suit to set aside fraudulent conveyances where debtor by his conduct purposely misled creditor as to the change in ownership and where at once on discovery the property was attached and the creditor’s claim reduced to judgment and proceeding in equity begun to set aside the deed, even though the transfer had been recorded. Tanner v. Whitney, 52 R.I. 391 , 161 A. 122, 1932 R.I. LEXIS 70 (1932).

Parties Entitled to Question Conveyances.

Creditor and not administrator was the proper party to maintain suit to set aside conveyance of decedent in fraud of creditors. Estes v. Howland, 15 R.I. 127 , 23 A. 624, 1885 R.I. LEXIS 73 (1885); Gardner v. Gardner, 17 R.I. 751 , 24 A. 785, 1892 R.I. LEXIS 80 (1892).

Purchaser of real estate at execution sale could maintain suit in equity to set aside previous conveyance by judgment debtor in fraud of his creditors. Belcher v. Arnold, 14 R.I. 613 , 1885 R.I. LEXIS 2 (1885); Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

Transfer by father to his son with a mortgage back was not fraudulent as against son’s creditors, since father was not indebted to son’s creditors. Cornell v. Kettelle, 62 R.I. 128 , 3 A.2d 654, 1939 R.I. LEXIS 3 (1939).

Persons Not in Pari Delicto.

Where deed was made for the dual purpose of securing a debt due to the grantee and to protect the property of the grantor from suits by his other creditors, and the grantee treated the deed as a mortgage securing the indebtedness without knowledge of the second purpose of the grantee, the parties were not in pari delicto and the deed would be treated in a court of equity as valid security for the debt due at the time that it was given. Nichols v. Reynolds, 1 R.I. 30 , 1835 R.I. LEXIS 2 (1835).

Preference of Creditors.

The common law rule that it is not fraud for a debtor to pay in full any debt which he owes out of any property which he has, whether attachable or not, even though the result may be that other debts will have to go unpaid, is not affected by the statute on fraudulent conveyances. Elliott v. Benedict, 13 R.I. 463 , 1881 R.I. LEXIS 50 (1881).

Preference of one creditor over another is not by itself a violation of the statute against fraudulent conveyances, even though it may in fact result in nonpayment of other debts. Faiella v. Tortolani, 76 R.I. 488 , 72 A.2d 434, 1950 R.I. LEXIS 24 (1950).

Prima Facie Case.

A prima facie case was established that conveyance was made to defraud creditors where guarantor of rent, after several notices from lessor that he was looking to guarantor for payment of rent, transferred his property, assessed for $9,240, to his wife for $10.00, and the burden was cast upon the defendants to show that conveyance was not fraudulent. Carroll v. Salisbury, 28 R.I. 16 , 65 A. 274, 1906 R.I. LEXIS 3 (1906).

Transfer of business to son for nominal consideration was void as a conveyance in fraud of creditors where vendor retained possession without explanation and no other evidence overcame presumption of fraud. Bonci v. McGovern, 53 R.I. 315 , 166 A. 29, 1933 R.I. LEXIS 82 (1933).

Property Subject to Statute.

Lands fraudulently paid for by a debtor with the legal title being taken in the name of another cannot be reached by levy of execution upon a judgment of law in favor of the creditor. Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

Ejectment would lie against debtor’s wife at suit of judgment creditor who purchased land at execution sale where debtor conveyed to third person who conveyed to debtor’s wife on the same day. Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

Where a judgment debtor created a partnership, which was the holder of a mortgage on property owned by the debtor and his wife, with the sole purpose of hindering his creditors, in violation of the Rhode Island Uniform Fraudulent Transfer Act, R.I. Gen. Laws § 6-16-1 et seq., the debtor’s motion to dismiss was denied because the creditors were entitled to further discovery to determine whether the property was an asset as defined in R.I. Gen. Laws § 6-16-1(2) . Rohm & Haas Co. v. Capuano, 301 F. Supp. 2d 156, 2004 U.S. Dist. LEXIS 1849 (D.R.I. 2004).

Purchasers in Good Faith.

Although statute formerly omitted the proviso in favor of bona fide purchasers for value without notice which was contained in the English statute, the statute was nevertheless construed as if this proviso had not been omitted, so that a deed given to a bona fide purchaser for value would not be set aside. Tiernay v. Claflin, 15 R.I. 220 , 2 A. 762, 1886 R.I. LEXIS 7 (1886).

Even if a vendor was insolvent in the vendee’s knowledge, the vendee acting in good faith could purchase personal property without a duty to see that the purchase price went to the vendor’s creditors. Gaspee Cab, Inc. v. McGovern, 51 R.I. 247 , 153 A. 870, 1931 R.I. LEXIS 24 (1931).

Relation to Other Statutes.

Former §§ 6-16-2 and 6-16-3 , relating to bulk sales, were in effect additions to former § 6-16-1 , and the mere fact that there was a compliance with the bulk sales requirements did not bar an inquiry as to whether there was actual fraud in fact. Glantz v. Gardiner, 40 R.I. 297 , 100 A. 913, 1917 R.I. LEXIS 34 (1917).

Status of Comakers.

Where parents of borrower signed his note as comakers, the lender became their creditors within the meaning of this section. Warwick Mun. Employees Credit Union v. Higham, 106 R.I. 363 , 259 A.2d 852, 1969 R.I. LEXIS 636 (1969).

Status of Title.

Under this section the creditors of a fraudulent grantor may treat the title as still in the grantor unaffected by such fraudulent conveyance. Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

An order vacating an equitable attachment of real estate in an action under this section to set aside conveyance of such real estate as fraudulent was final and subject to appeal as it left plaintiff without any real estate to impress the fraudulent conveyance upon. Eidam v. Eidam, 108 R.I. 673 , 279 A.2d 413, 1971 R.I. LEXIS 1322 (1971).

Time From Which Conveyances Deemed Void.

Conveyances are deemed to be void under this section from the time they first obstruct the creditor in his just demand. Tucker v. Denico, 26 R.I. 560 , 59 A. 920, 1905 R.I. LEXIS 3 (1905).

Transactions Between Husband and Wife.

Where husband while solvent purchased property and took title in name of his wife in order to place it beyond the reach of attachment while he was out of the state, and third party subsequently purchased such property from the wife with knowledge of its status, such third party was not entitled to assert that the original transaction was void as to creditors. Hudson v. White, 17 R.I. 519 , 23 A. 57, 1891 R.I. LEXIS 66 (1891).

Judgment creditor of husband who purchased land at execution sale could not bring ejectment against wife who had purchased at previous execution sale under valid proceedings against husband in favor of the state, even if husband furnished purchase money. Monks v. De Slandes, 38 R.I. 2 , 94 A. 854, 1915 R.I. LEXIS 54 (1915).

Conveyance of residence of debtor to his wife was in fraud of creditors where made without consideration and after debts had occurred, even though original purchase was made with joint bank assets created by sale of former home originally owned by wife who had conveyed one-half interest to debtor husband, and even though there were other alleged grounds for the transfer. Tanner v. Whitney, 52 R.I. 391 , 161 A. 122, 1932 R.I. LEXIS 70 (1932).

A voluntary conveyance of all a person’s property to his wife for a nominal consideration upon notification of a claim against him makes out a prima facie case of a transfer in fraud of creditors and requires stronger proof to overcome it than if the action had been between strangers. Savoie v. Pion, 52 R.I. 422 , 161 A. 219, 1932 R.I. LEXIS 85 (1932).

Voluntary conveyance of half interest in real estate in joint tenancy to debtor’s wife for nominal consideration, leaving him insufficient property to satisfy debt, shortly after being notified of the claim, was invalid as in fraud of creditors, even though alleged consideration was given in an unexecuted contract between husband and wife, where she at some indefinite future time was to be released from liability on a note for which they were both liable. Savoie v. Pion, 52 R.I. 422 , 161 A. 219, 1932 R.I. LEXIS 85 (1932).

Where voluntary transfer from husband to wife did not render husband unable to pay existing creditors then or other creditors for some time, and where no contemporary fraudulent intent was shown to hinder either existing or subsequent creditors, such conveyance could not be set aside by subsequent judgment creditors as a fraudulent conveyance. Harriss v. Orr, 65 R.I. 369 , 14 A.2d 674, 1940 R.I. LEXIS 117 (1940).

Finding of trial court that husband intended to hinder, delay, and defraud existing creditor at time he gratuitously conveyed interest in realty to wife was sustained by evidence that husband withdrew all bank deposits and hid the money in his home just prior to such conveyance. Sherman v. Rhode Island Hosp. Trust Co., 68 R.I. 525 , 30 A.2d 498, 1943 R.I. LEXIS 8 (1943).

Evidence that husband did not have property enough to pay creditor’s claim exclusive of realty conveyed to wife was sufficient to support finding of insolvency at time of such conveyance. Sherman v. Rhode Island Hosp. Trust Co., 68 R.I. 525 , 30 A.2d 498, 1943 R.I. LEXIS 8 (1943).

Where wife conveyed her property to herself and husband as joint tenants for purpose of obtaining veteran’s tax exemption of property to which husband was entitled, there was an intent on part of wife to make husband a joint tenant and conveyance back to wife after husband encountered financial difficulties was subject to this section. Lafayette Fin. Corp. v. Cunningham, 88 R.I. 103 , 143 A.2d 700, 1958 R.I. LEXIS 104 (1958).

Where debtor executed a promissory note secured by a second mortgage the debtor held on realty and shortly thereafter transferred other realty to his wife without consideration, the court held the transfer could not be held as intended to defraud the creditor although some years later when the note became due declining real estate values had resulted in the value of the second mortgage being insufficient to satisfy the promissory note. Clury v. Annoth, 113 R.I. 506 , 324 A.2d 325 (1974).

Transfers of Corporate Stock.

A transfer of corporate stock made with intent to hinder, delay and defraud creditors is fraudulent and void. Beckwith v. Burrough, 14 R.I. 366 , 1884 R.I. LEXIS 17 (1884).

Trusts and Reservations.

Where conveyance upon a secret trust was fraudulent as against creditors, grantor could not redeem property conveyed in proceeding against grantee. Appenaug Bleaching, Dyeing, & Printing Co. v. Rawson, 22 R.I. 123 , 46 A. 455, 1900 R.I. LEXIS 67 (1900).

Alleged conveyance in trust in the nature of a mortgage whereby insolvent debtor conveyed property to a third party who was to carry on the business of the debtor while attempting to effect a settlement with creditors, with the property to be reconveyed to the debtor upon payment to the third party of the sums paid out, together with payment for improvements and a sum in payment of such services, was fraudulent and void as against the creditors. Appenaug Bleaching, Dyeing, & Printing Co. v. Rawson, 22 R.I. 123 , 46 A. 455, 1900 R.I. LEXIS 67 (1900).

Conveyance in trust for purpose of protecting grantor from litigation, in which there was no proof that there were creditors at the time as to whom an intent to defraud would be fraudulent, and in which there was no clear showing of fraud in fact, was valid as between the parties, being void only as to creditors. Hazard v. Coyle, 22 R.I. 435 , 48 A. 442, 1901 R.I. LEXIS 30 (1901).

An absolute conveyance of attachable property with a secret reservation in favor of the vendor is fraudulent and obnoxious to the statute, whether the conveyance is of realty or personalty, and whether the interest reserved is large or small, and the intention of the parties is immaterial. Bellini v. Neas, 50 R.I. 283 , 146 A. 634, 1929 R.I. LEXIS 63 (1929).

Under bill in equity to establish a resulting trust as to certain real estate in which the legal title was taken in name of respondents for benefit of complainant, complainant would not be denied relief on the ground that title was conveyed to respondents to defeat the creditors of complainant where there was evidence to support the finding of the trial court that there was no debt or claim outstanding against the complainant at the time of the conveyance. Di Libero v. Pacitto, 71 R.I. 361 , 46 A.2d 39, 1946 R.I. LEXIS 6 (1946).

Collateral References.

Absolute conveyance or transfer with secret reservation as fraudulent per se against creditors. 68 A.L.R. 306.

Accountability and liability for rents and profits of grantee of fraudulently conveyed real property. 60 A.L.R.2d 593.

Admissibility of testimony of transferee as to his knowledge, purpose, intention, or good faith on issue whether conveyance was in fraud of transferor’s creditors. 52 A.L.R.2d 418.

Annuity, purchase of, by debtor as fraud on creditors. 154 A.L.R. 727.

Antenuptial agreement, conveyance pursuant to as fraud on creditors. 41 A.L.R. 1163.

Assumption of mortgage as consideration for conveyance attached as in fraud of creditors. 6 A.L.R.2d 270.

Attachment, action by creditor to set aside fraudulent conveyance as one for money only. 76 A.L.R. 1449.

Attorney’s compensation for services in matters involving fraudulent conveyances, amount of. 143 A.L.R. 798; 56 A.L.R.2d 13.

Attorney’s fee, allowance of, against property or fund protected or increased by attorney’s services in suit to set aside fraudulent conveyance. 49 A.L.R. 1168; 107 A.L.R. 749.

Barred debt, conveyance to pay or secure. 109 A.L.R. 1220.

Cloud on title, fraudulent conveyance as. 78 A.L.R. 250.

Complainant’s purpose to defraud creditors as defense to suit to recover property paid for by him but conveyed to defendant. 117 A.L.R. 1464.

Conveyance as fraudulent where made in contemplation of possible liability for future tort. 38 A.L.R.3d 597.

Conveyance in consideration of future support as fraudulent against creditors. 2 A.L.R. 1438; 23 A.L.R. 584.

Conveyance or transfer in consideration of legal services, rendered or to be rendered, as fraudulent against creditors. 45 A.L.R.2d 500.

Corporation, disregarding existence of, in case of conveyance of property to corporation to defraud creditors. 1 A.L.R. 611; 34 A.L.R. 597.

Corporation which subsequently becomes insolvent, right of subsequent creditors or their representatives to complain of voluntary transfer by. 117 A.L.R. 1263.

Decedent’s estate, right of creditor of, before perfecting his claim or after loss of recourse against decedent’s estate, to pursue remedy against property conveyed by decedent in fraud of creditors. 103 A.L.R. 555.

Divorce or separation, validity as to creditors of transfer of property in consideration of agreement to prevent or end. 11 A.L.R. 286.

Entireties, right of creditors of husband or wife to subject to payment of debts property acquired by them as tenants by, in exchange for property owned by debtor individually. 7 A.L.R.2d 1104.

Entirety estate, right of creditors of one spouse, either before or after death of other spouse, to attack conveyance or encumbrance of, by both spouses as in fraud of creditors. 121 A.L.R. 1028.

Evidence in civil action of disposal of property as showing consciousness of liability. 80 A.L.R. 1139.

Evidence of good character of party for truth and honesty on issue of fraud in conveyance. 78 A.L.R. 647.

Excessive security for debt as affecting question of fraud upon creditors. 138 A.L.R. 1051.

Executor’s or administrator’s right to attack conveyance or transfer by decedent as fraudulent. 91 A.L.R. 133.

Gift of husband’s services or labor to wife as fraud on creditors. 28 A.L.R. 1048.

Good faith of grantee as affecting right to attack voluntary conveyance. 96 A.L.R.2d 373.

Heirs and distributees, right to set aside for benefit of, a conveyance or transfer by decedent in fraud of his creditors. 148 A.L.R. 230.

Husband’s agreement that wife shall receive proceeds of sale of homestead as fraud on his creditors. 6 A.L.R. 574.

Illegal consideration, right of creditor or one representing him, to recover money paid or property transferred by debtor on. 34 A.L.R. 1297.

Insurance by insolvent on his life, for benefit of his relatives, right of subsequent creditors to complain of. 31 A.L.R. 75; 34 A.L.R. 838.

Insurance, promise of beneficiary of, to insured, to pay proceeds of policy in whole or in part to third person, as effecting transfer in fraud of creditors. 102 A.L.R. 599.

Insurance, validity as against creditors of change of beneficiary of policy from estate to individual or assignment of policy payable to estate. 6 A.L.R. 1173; 106 A.L.R. 596.

Joinder of grantees in different conveyances in suit to avoid them. 69 A.L.R. 229.

Judgment for fine or penalty as supporting creditor’s bill or other suit to avoid, as fraudulent, conveyance or transfer before its entry. 48 A.L.R. 605.

Jurisdiction of equity to sequester, seize or otherwise provisionally secure assets for application upon money demand which has not been reduced to judgment. 116 A.L.R. 270.

Liability of one who assists or encourages the making of a fraudulent conveyance to a third person. 112 A.L.R. 1250.

Lis pendens as applicable to actions to avoid conveyance or transfer in fraud of creditors or to prevent such conveyance. 74 A.L.R. 690.

Maxim, “He who comes into equity must come with clean hands,” as basis for refusal of relief to party to fraudulent transfer. 4 A.L.R. 99.

Nonresidence or absence of defendant from state as suspending statute of limitations in action to set aside fraudulent conveyances and to subject land conveyed to creditor’s demand. 119 A.L.R. 371.

Notice of fraud to purchaser from or through bona fide purchaser as affecting the former’s right to protection. 63 A.L.R. 1367.

Parent’s right, as against creditor or lienor, to make gift to minor child of latter’s own services. 44 A.L.R. 876.

Pari delicto, fact that parties to a conveyance in fraud of creditors are not in, as affecting right of party guilty of fraud to relief. 7 A.L.R. 150.

Pledge of accounts as affected by pledgor’s reservation of partial dominion or control. 85 A.L.R. 222.

Purchase of homestead as fraud on creditors. 161 A.L.R. 1287.

Receivership or liquidation of debtor as affecting right of individual creditors to maintain bill to set aside conveyance or transfer in fraud of creditors. 119 A.L.R. 1339.

Reconveyance or retransfer of property to grantor, executed as part of, or as contemplated at time of the fraudulent transaction, as affecting principle which denies relief to party who has conveyed or transferred property in fraud of his creditors. 89 A.L.R. 1166.

Redemption from, acquisition or extinction of, outstanding rights, title or interest, by grantee or transferee in fraud of creditors, right of creditor to. 87 A.L.R. 830.

Reservation to settler of trust or other grantor, of right to revoke or change the same, or withdraw security or other property items and substitute others, as affecting its validity. 92 A.L.R. 282.

Resulting trust in property conveyed by third person to debtor’s spouse and attacked by creditors as fraudulent. 35 A.L.R.2d 13.

Right of creditor to recover damages for conspiracy to defraud him of claim. 11 A.L.R.4th 345.

Right of creditor to set aside transfer of property as fraudulent as affected by the fact that his claim is barred by the statute of limitations. 14 A.L.R.2d 598.

Right of grantee, mortgagee, or transferee in instrument fraudulent as to creditors to protection to extent of consideration paid by him. 79 A.L.R. 132.

Right of grantee, or his privies, to maintain suit or proceeding for affirmative relief where claim is made or anticipated that conveyance was made with intention on part of grantor, but without actual fraud by grantee, to defraud former’s creditors. 128 A.L.R. 1504.

Right of secured creditor to have set aside fraudulent transfer of other property by his debtor. 8 A.L.R.4th 1123.

Right of wife or child by virtue of right to support to maintain action to set aside conveyance by husband or parent as fraudulent without reducing claim to judgment. 164 A.L.R. 524.

Right to attack and conditions of attack upon conveyance, mortgage, or transfer as fraudulent as against creditors as affected by mortgage or other security for indebtedness to attacking creditor. 116 A.L.R. 1048.

Rights as between creditors of fraudulent grantor where one or more of them, in payment of or as security for his debt, received deed or mortgage from fraudulent grantee. 114 A.L.R. 406.

Rights as between creditors of grantor or transferor and those of grantee or transferee. 148 A.L.R. 520.

Rule denying recovery of property to one who conveyed to defraud creditors as applicable where the claim which motivated the conveyance was never established. 6 A.L.R.4th 862.

Services of debtor, gift of, to third person as fraud on creditors. 28 A.L.R. 1046.

Stockholder’s conveyance or transfer as fraudulent as regards his liability as stockholder to creditors of corporations. 89 A.L.R. 751.

Succession, estate, or gift tax in respect of or as affected by conveyance or transfer restoring to original owner property transferred in fraud of creditors. 108 A.L.R. 1508.

Support, who may attack conveyance in consideration of. 2 A.L.R. 1452; 23 A.L.R. 587.

Surety or one secondarily liable, right of to bring an action before payment of obligation to set aside fraudulent conveyances by principal. 71 A.L.R. 354.

Taxes or encumbrances, right of grantee or transferee to be reimbursed for expenditures in payment of, where conveyance or transfer is in fraud of creditors. 8 A.L.R. 527.

Third person, right of creditors in respect of property gratuitously conveyed or transferred to, for alleged benefit of debtor. 147 A.L.R. 1160.

Tort claimant’s right to attack conveyance or transfer as fraudulent. 39 A.L.R. 175.

Transaction in consideration of discharge of antecedent debt owed by one other than grantor as based on “fair consideration” under Uniform Fraudulent Conveyance Act. 30 A.L.R.2d 1209.

Trust, validity, as against creditors of trustee, or one deriving his right from trustee, of conveyance or transfer to carry out terms of unenforceable parol trust. 64 A.L.R. 576.

Use of debtor’s individual funds or property for acquisition, improvement of, or discharge of liens on, property held in estate by entireties as fraud upon creditors. 7 A.L.R.2d 447.

Validity and effect of one spouse’s conveyance to other spouse of interest in property held as estate by the entireties. 18 A.L.R.5th 230.

Validity as against creditors of conveyance in trust for settlor for life with remainder to his appointees. 93 A.L.R. 1211.

Venue of action to set aside as fraudulent conveyance of real property. 37 A.L.R.2d 568.

Voluntary conveyance or transfer as against creditors, necessity of participation by grantee or transferee in fraud of grantor or transferor in order to avoid. 17 A.L.R. 728.

What transfers justify acceleration under “due-on-sale” clause of real estate mortgage. 22 A.L.R.4th 1266.

When statute of limitations or laches commences to run against action to set aside frauduent conveyance or transfer in fraud of creditors. 100 A.L.R.2d 1094.

Wife in respect to her right to maintenance or alimony as within jurisdiction of statute or rule avoiding conveyances or transfers in fraud of creditors or persons to whom maker is under legal liability. 79 A.L.R. 421.

Will, creditors’ right to complain of or control debtor’s renunciation of benefit under, or his election to take under or against. 27 A.L.R. 477; 133 A.L.R. 1428.

6-16-2. Insolvency.

  1. A debtor is insolvent if, at a fair valuation, the sum of the debtor’s debts is greater than the sum of the debtor’s assets.
  2. A debtor who is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against whom the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.
  3. Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that have been transferred in a manner making the transfer voidable under this chapter.
  4. Debts under this section do not include obligations to the extent they are secured by a valid lien on property of the debtor not included as an asset.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Repealed Sections.

Former §§ 6-16-2 and 6-16-3 (P.L. 1909, ch. 387, §§ 1, 2; G.L. 1923, ch. 311, §§ 1, 2; P.L. 1932, ch. 1881, § 1; G.L. 1938, ch. 483, §§ 1, 2; G.L. 1956, §§ 6-16-2 , 6-16-3 ), concerning notice to creditors of bulk sales and transfers and parties subject to chapter, were repealed by P.L. 1960, ch. 147, § 2.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-3. Value.

  1. Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor’s business to furnish support to the debtor or another person.
  2. For the purposes of §§ 6-16-4(a)(2) and 6-16-5 , a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.
  3. A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.

History of Section. P.L. 1986, ch. 438, § 2.

6-16-4. Transfers voidable as to present and future creditors.

  1. A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
    1. With actual intent to hinder, delay, or defraud any creditor of the debtor; or
    2. Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
      1. Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
      2. Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.
  2. In determining actual intent under subsection (a)(1), consideration may be given, among other factors, to whether:
    1. The transfer or obligation was to an insider;
    2. The debtor retained possession or control of the property transferred after the transfer;
    3. The transfer or obligation was disclosed or concealed;
    4. Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
    5. The transfer was of substantially all the debtor’s assets;
    6. The debtor absconded;
    7. The debtor removed or concealed assets;
    8. The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
    9. The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
    10. The transfer occurred shortly before or shortly after a substantial debt was incurred; and
    11. The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
  3. A creditor making a claim for relief under subsection (a) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

NOTES TO DECISIONS

Creditor-Debtor Relationship.

R.I. Gen. Laws § 6-16-4 was not triggered where a debtor-creditor relationship did not exist at the time that the allegedly fraudulent transfer was made. Kondracky v. Crystal Restoration, Inc., 791 A.2d 482, 2002 R.I. LEXIS 23 (2002).

Illustrations.

Wife’s conveyance of her deceased husband’s apartment to her daughters was done with fraudulent intent where the transfer was made for no taxable consideration and was concealed from an existing creditor who had already commenced suit against her. Landmark Medical Ctr. v. Gauthier, 635 A.2d 1145, 1994 R.I. LEXIS 2 (1994).

Evidence supported the conclusion that when the transferee in the property’s initial fraudulent transfer transferred the property to another party, he was acting with actual intent to hinder, to delay, or to defraud the plaintiffs in their effort to collect the money that was owed to them by the debtor. Nisenzon v. Sadowski, 689 A.2d 1037, 1997 R.I. LEXIS 52 (1997).

Trial court erred in refusing to vacate summary judgment in favor of defendants on plaintiff’s claim for breach of fiduciary duty, based on newly discovered evidence, as that evidence made it clear that defendants, a corporation and its principle, violated their fiduciary duty by making fraudulent transfers of an affiliate’s assets and preferential payments to its creditors in a transparent effort to avoid a judgment obtained by plaintiff. Nat'l Hotel Assocs. v. O. Ahlborg & Sons, Inc., 827 A.2d 646, 2003 R.I. LEXIS 177 (2003).

Evidence did not support the contention that a conveyance was made with actual intent to defraud where: (1) it was agreed that the transferee would buy the property at issue by making payments over a period of time when the property was purchased; (2) the taxpayer and her husband had legitimate reasons for conveying the property to the transferee; (3) the conveyance did not leave the taxpayer and her husband insolvent; and (4) there was no evidence that they had other debts or that the value of the property they still owned was less than their potential tax liability; although it was clear that the transfer was made without receiving a reasonably equivalent value in exchange, the government failed to sustain its burden of showing that the remaining assets were insufficient to satisfy the transferors’ obligations. United States v. Verduchi, 2005 U.S. Dist. LEXIS 7938 (D.R.I. Apr. 25, 2005), aff'd, 434 F.3d 17, 2006 U.S. App. LEXIS 587 (1st Cir. 2006).

Evidence supported the contention that a conveyance to the transferors’ son, where the transfer was made after the couple’s tax liability had been established, and after their financial condition had deteriorated and the couple continued to live in the home and pay property taxes after the transfer, suggesting that the conveyance to the son was intended to place the property beyond the reach of the Internal Revenue Service; even if the transfer was not made with actual intent to defraud, it clearly ran afoul of R.I. Gen. Laws § 6-16-4(a)(2)(ii) because it was made when the couple was insolvent. United States v. Verduchi, 2005 U.S. Dist. LEXIS 7938 (D.R.I. Apr. 25, 2005), aff'd, 434 F.3d 17, 2006 U.S. App. LEXIS 587 (1st Cir. 2006).

Statute of Limitations.

Claims of fraudulent transfer for less than adequate consideration under § 6-16-4(a)(2) and § 6-16-5(a) of the Rhode Island Uniform Fraudulent Transfer Act, R.I. Gen. Laws § 6-16-1 et seq., filed nine years after the transfers occurred, were dismissed as time barred under R.I. Gen. Laws § 6-16-9 ; the court refused to read the common law discovery rule into provisions of the Act because the state legislature specifically chose not to apply a discovery rule to causes of action where no actual intent to hinder or defraud was required. Rohm & Haas Co. v. Capuano, 301 F. Supp. 2d 156, 2004 U.S. Dist. LEXIS 1849 (D.R.I. 2004).

Transfer to Secured Creditor.

No cognizable fraudulent transfer occurred under this section when property was conveyed to a secured creditor and it was not shown that its fair value exceeded the amount due under the security agreement. Ed Peters Jewelry Co. v. C & J Jewelry Co., 124 F.3d 252, 1997 U.S. App. LEXIS 23021 (1st Cir. 1997).

Collateral References.

Purchase of Annuity by Debtor as Fraud on Creditors. 74 A.L.R.6th 549.

6-16-5. Transfers or obligations voidable as to present creditors.

  1. A transfer made or obligation incurred by a debtor is voidable as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.
  2. A transfer made by a debtor is voidable as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt; the debtor was insolvent at that time; and the insider had reasonable cause to believe that the debtor was insolvent.
  3. Subject to § 6-16-2(b) , a creditor making a claim for relief under subsection (a) or (b) of this section has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

NOTES TO DECISIONS

Initial Transferee.

In an action to recover a transfer under 11 USCS § 544(b) and R.I. Gen. Laws § 6-16-5(a) , officer of the debtor was not the initial transferee under 11 USCS § 550(a) where his sole function was to hand the checks over to the transferee. The checks were direct transfers from the debtor’s accounts, and the officer did not have the right to use the money for any other purpose. Richardson v. Preston (In re Antex, Inc.), 397 B.R. 168, 2008 Bankr. LEXIS 3649 (1st Cir. 2008).

Insolvency of Debtor.

Given a letter pre-dating the transfer of the property which indicated that the debtor was in fact insolvent and was not paying his debts as they became due, the trial court was not clearly erroneous in finding that the debtor was already insolvent or became insolvent when he transferred the property. Nisenzon v. Sadowski, 689 A.2d 1037, 1997 R.I. LEXIS 52 (1997).

Where debtors sold their real estate and paid off some, but not all of their unsecured debt, then transferred the remaining proceeds to their three children and to the debtor husband’s former wife over a 22-day period without receiving reasonably equivalent value for the transfers, a Chapter 7 trustee satisfied her burden under R.I. Gen. Laws § 6-16-5(a) and 11 U.S.C.S. § 544(b) and could recover the transfers under 11 U.S.C.S. § 550. The court rejected the debtors’ argument that for purposes of determining whether they were insolvent, the court should take a solvency snapshot of each transfer before going on to examine the next transfer. Ferrara v. Cabrera (In re Cabrera), 2012 Bankr. LEXIS 2483 (Bankr. D.R.I. June 1, 2012).

Reasonably Equivalent Value.

Finding that a transfer of property was made without the debtor’s receiving reasonably equivalent value in exchange for the property was not clearly erroneous given the lack of revenue stamps and any documentation to support the alleged consideration, and the trial justice’s negative assessment of the transferee’s credibility. Nisenzon v. Sadowski, 689 A.2d 1037, 1997 R.I. LEXIS 52 (1997).

Statute of Limitations.

Claims of fraudulent transfer for less than adequate consideration under §§ 6-16-4(a)(2) and 6-16-5(a) of the Rhode Island Uniform Fraudulent Transfer Act, R.I. Gen. Laws § 6-16-1 et seq., filed nine years after the transfers occurred, were dismissed as time barred under R.I. Gen. Laws § 6-16-9 ; the court refused to read the common law discovery rule into provisions of the Act because the state legislature specifically chose not to apply a discovery rule to causes of action where no actual intent to hinder or defraud was required. Rohm & Haas Co. v. Capuano, 301 F. Supp. 2d 156, 2004 U.S. Dist. LEXIS 1849 (D.R.I. 2004).

Chapter 7 Trustee’s complaint to recover a transfer under 11 USCS § 544(b) and R.I. Gen. Laws § 6-16-5(a) was not time-barred because the applicable state limitations period had not expired prior to the petition date. The petition date, not the date that the complaint was filed, was controlling. Richardson v. Preston (In re Antex, Inc.), 397 B.R. 168, 2008 Bankr. LEXIS 3649 (1st Cir. 2008).

6-16-5.1. Transfers voidable as to depository creditors of financial institutions closed by proclamation of the governor dated January 1, 1991 — Remedies.

  1. A transfer made or obligation incurred by any financial institution closed by proclamation of the governor dated January 1, 1991, is voidable as to any depository creditor of record of any such financial institution as of January 1, 1991, if the transfer or obligation involved either:
    1. The withdrawal of deposits from the financial institution by any officer, director, or employee of the financial institution or of the Rhode Island share and deposit indemnity corporation, with knowledge of the actual or impending insolvency or the impending closing of the financial institution or of the actual or impending insolvency of or the actual or impending cessation of business by the Rhode Island share and deposit indemnity corporation, and for the purpose of avoiding the loss of funds or access to funds in any depository account in the financial institution;
    2. The encumbrance of any assets of the financial institution to or for the benefit of any officer, director, or employee of the financial institution or of the Rhode Island share and deposit indemnity corporation, with knowledge of the actual or impending insolvency or the impending closing of the financial institution or of the actual or impending insolvency of or the actual or impending cessation of business by the Rhode Island share and deposit indemnity corporation, and for the purpose of avoiding the loss of funds or access to funds in any depository account in the financial institution; or
    3. A transfer or obligation defined as voidable under § 6-16-4 or § 6-16-5 .
  2. In addition to any remedies provided by § 6-16-7 , (1) any financial institution closed by proclamation of the governor dated January 1, 1991; (2) any assignees of and successors in interest to any such financial institution; and (3) any depository creditor of record of any such financial institution as of January 1, 1991, who suffers monetary loss as a result of a transfer or conveyance defined as voidable under this section or who is otherwise aggrieved by the transfer or conveyance, shall have a private cause of action at law and in equity against any officer, director, or employee of the financial institution or of the Rhode Island share and deposit indemnity corporation to whom the subject transfer was made or to whom or for whose benefit any assets of the financial institution were encumbered.

History of Section. P.L. 1991, ch. 3, § 5; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-6. When transfer is made or obligation is incurred.

For the purposes of this chapter:

  1. A transfer is made:
    1. With respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and
    2. With respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee;
  2. If applicable law permits the transfer to be perfected as provided in subsection (1) and the transfer is not so perfected before the commencement of an action for relief under this chapter, the transfer is deemed made immediately before the commencement of the action;
  3. If applicable law does not permit the transfer to be perfected as provided in subsection (1), the transfer is made when it becomes effective between the debtor and the transferee;
  4. A transfer is not made until the debtor has acquired rights in the asset transferred;
  5. An obligation is incurred:
    1. If oral, when it becomes effective between the parties; or
    2. If evidenced by a record, when the record signed by the obligor is delivered to or for the benefit of the obligee.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

NOTES TO DECISIONS

Applicability.

Conveyance in which the transferor’s last name was missing from the acknowledgment (although it appeared elsewhere in the document) and the words “free act and deed” were not included was nonetheless effective upon registration to put a good faith purchaser on notice of the transaction; therefore, the four-year statute of limitations for an effort to have the conveyance set aside as a fraudulent conveyance began to run at that point, and summary judgment was properly entered in favor of the transferee, on timeliness grounds, when such an action was commenced five years after the conveyance. Duffy v. Dwyer, 847 A.2d 266, 2004 R.I. LEXIS 86 (2004).

6-16-7. Remedies of creditor.

  1. In an action for relief against a transfer or obligation under this chapter, a creditor, subject to the limitations in § 6-16-8 , may obtain:
    1. Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor’s claim;
    2. An attachment or other provisional remedy against the asset transferred or other property of the transferee available under applicable law; and
    3. Subject to applicable principles of equity and in accordance with applicable rules of civil procedure:
      1. An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;
      2. Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or
      3. Any other relief the circumstances may require.
  2. If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 1988, ch. 84, § 5; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

NOTES TO DECISIONS

Damages.

Damage award fixed by the amount of the claim against the debtor rather than by the value of the property when it was transferred was not clearly erroneous or inequitable. Nisenzon v. Sadowski, 689 A.2d 1037, 1997 R.I. LEXIS 52 (1997).

Where defendant principal, bankrolled by defendant corporation, caused the corporation’s affiliate to make fraudulent transfers to the corporation and preferential debt payments for the principle’s personal benefit to avoid paying a judgment to the plaintiff, R.I. Gen. Laws 6-16-7(a)(3)(iii) authorized the imposition of personal liability on both defendants for this misconduct and an order for relief in the amount of the plaintiff’s judgment. Nat'l Hotel Assocs. v. O. Ahlborg & Sons, Inc., 827 A.2d 646, 2003 R.I. LEXIS 177 (2003).

Imminence of Fraud.

This section’s remedial provisions are triggered only by the occurrence of an actual transfer, not by the future possibility of one, unless the plaintiff can prove that a fraudulent transfer is imminent. Thus, where a plaintiff sought the issuance of a temporary restraining order to prevent a fraudulent transfer but the plaintiff had no evidence that the defendant planned to transfer or in any way secrete with property in order to defraud plaintiff, the superior court properly denied his motion for prejudgment interest. Martin v. Lincoln Bar, 622 A.2d 464, 1993 R.I. LEXIS 93 (1993).

Levy of Execution.

Findings that transfers from the debtor corporation to shareholders rendered it insolvent and that the transfers were fraudulent authorized the levy of execution against the shareholders for sums and specific tangible assets transferred to them. Lemoi v. Lemoi, 713 A.2d 242, 1998 R.I. LEXIS 206 (1998).

6-16-8. Defenses, liability, and protection of transferee or obligee.

  1. A transfer or obligation is not voidable under § 6-16-4(a)(1) against a person who took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.
  2. To the extent a transfer is voidable in an action by a creditor under § 6-16-7(a)(1) , the following rules apply:
    1. Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c) of this section, or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against:
      1. The first transferee of the asset or the person for whose benefit the transfer was made; or
      2. An immediate or mediate transferee of the first transferee, other than:
        1. A good-faith transferee that took for value; or
        2. An immediate or mediate good-faith transferee of a person described in subsection (b)(1)(ii)(A) of this section.
    2. Recovery pursuant to § 6-16-7(a)(1) or (b) or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in subsection (b)(1)(i) or (ii) of this section.
  3. If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.
  4. Notwithstanding voidability of a transfer or an obligation under this chapter, a good-faith transferee or obligee, to the extent of the value given the debtor for the transfer or obligation, is entitled to:
    1. A lien on or a right to retain an interest in the asset transferred;
    2. Enforcement of an obligation incurred; or
    3. A reduction in the amount of the liability on the judgment.
  5. A transfer is not voidable under § 6-16-4(a)(2) or § 6-16-5 if the transfer results from:
    1. Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or
    2. Enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.
  6. A transfer is not voidable under § 6-16-5(b) :
    1. To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made except to the extent the new value was secured by a valid lien;
    2. If made in the ordinary course of business or financial affairs of the debtor and the insider; or
    3. If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.
  7. The following rules determine the burden of proving matters referred to in this section:
    1. A party that seeks to invoke subsection (a), (d), (e), or (f) has the burden of proving the applicability of that subsection.
    2. Except as otherwise provided in subsections (g)(3) and (g)(4), the creditor has the burden of proving each applicable element of subsection (b) or (c) of this section.
    3. The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(ii)(A) or (B) of this section.
    4. A party that seeks adjustment under subsection (c) of this section has the burden of proving the adjustment.
  8. Proof of matters referred to in this section is sufficient if established by a preponderance of the evidence.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

NOTES TO DECISIONS

Damages Award.

Damage award fixed by the amount of the claim against the debtor rather than by the value of the property when it was transferred was not clearly erroneous or inequitable. Nisenzon v. Sadowski, 689 A.2d 1037, 1997 R.I. LEXIS 52 (1997).

District court did not abuse its discretion when it entered judgment under 26 U.S.C. § 7603 against the son, as transferee, in the sum of $196,000 plus post-judgment interest because the district court simply made an equitable decision, as permitted under R.I. Gen. Laws § 6-16-8(c) , that in order to make the government whole, the son, as transferee, had to pay back to the government the amount of $ 196,000, the amount he received from the mortgage corporation for the house, plus interest to offset the diminishment of the proceeds of the forfeiture sale by what the mortgage corporation took. Thus, there was nothing impermissible about the court’s approach. United States v. Verduchi, 434 F.3d 17, 2006 U.S. App. LEXIS 587 (1st Cir. 2006).

6-16-8.1. Intentional concealment of support.

  1. Whoever receives or conceals an asset of another knowing that the asset is being transferred for the purpose of concealing it to avoid payment of an order or judgment for support issued pursuant to chapters 5, 9, 10, 11.1, and 13 of title 15, or pursuant to any similar laws of other states, shall be punished by a fine of not more than five thousand dollars ($5,000) or by imprisonment for not more than two (2) years, or by both that fine and imprisonment.
  2. Whoever shall transfer an asset for the purpose of concealing it to avoid payment of an order or judgment for support issued pursuant to chapters 5, 9, 10, 11.1, and 13 of title 15, or pursuant to any similar laws of other states, shall be punished by a fine of not more than five thousand dollars ($5,000) or by imprisonment for not more than two (2) years, or both by that fine or imprisonment.

History of Section. P.L. 2001, ch. 276, § 1; P.L. 2014, ch. 528, § 14.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-16-8.2. Fraudulent conveyance by transferor of child support — Civil action.

  1. A person who has been adjudged to be in contempt of an order or judgment for child support entered pursuant to chapters 9, 10, 11.1, and 13 of title 15 who knowingly makes a conveyance without fair consideration to an individual for a fraudulent purpose relating to avoiding payment of the order or judgment shall be liable in a civil action to the obligee under the order or judgment in an amount equal to the value of the conveyance made.
  2. A person shall not be liable under this section if the conveyance made does not exceed one hundred dollars ($100) in value in any calendar year.
  3. For the purpose of this section, “conveyance” means any payment of money, gift, assignment, transfer, or lease of tangible or intangible property.
  4. A conveyance shall be deemed to be made without fair consideration unless the conveyance was made in exchange for property or goods of equal value or to satisfy an existing debt created in good faith.

History of Section. P.L. 2001, ch. 276, § 1; P.L. 2014, ch. 528, § 14.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-16-9. Extinguishment of claim for relief.

A claim for relief with respect to a transfer or obligation under this chapter is extinguished unless action is brought:

  1. Under § 6-16-4(a)(1) , not later than four (4) years after the transfer was made or the obligation was incurred or, if later, not later than one year after the transfer or obligation was or could reasonably have been discovered by the claimant;
  2. Under § 6-16-4(a)(2) or § 6-16-5(a) , not later than four (4) years after the transfer was made or the obligation was incurred; or
  3. Under § 6-16-5(b) , not later than one year after the transfer was made or the obligation was incurred.

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

NOTES TO DECISIONS

Timeliness.

While the mere filing of a deed alone might not have been enough to alert the plaintiff to an allegedly fraudulent transfer, where the plaintiff had known the address of the defendants’ residence since the time the original summons was served, nothing from that point on suggested a course of improper conduct designed to conceal the status of the defendants’ residence from the plaintiff, and the plaintiff had been alerted at least twice that the defendants were contemplating filing for bankruptcy, the trial justice properly held that the four-year statute of limitations barred the plaintiff’s claim and that the discovery exception was inapplicable. Supreme Bakery, Inc. v. Bagley, 742 A.2d 1202, 2000 R.I. LEXIS 5 (2000).

Claims of fraudulent transfer for less than adequate consideration under § 6-16-4(a)(2) and § 6-16-5(a) of the Rhode Island Uniform Fraudulent Transfer Act, R.I. Gen. Laws § 6-16-1 et seq., filed nine years after the transfers occurred, were dismissed as time barred under R.I. Gen. Laws § 6-16-9 ; the court refused to read the common law discovery rule into provisions of the Act because the state legislature specifically chose not to apply a discovery rule to causes of action where no actual intent to hinder or defraud was required. Rohm & Haas Co. v. Capuano, 301 F. Supp. 2d 156, 2004 U.S. Dist. LEXIS 1849 (D.R.I. 2004).

Conveyance in which the transferor’s last name was missing from the acknowledgment (although it appeared elsewhere in the document) and the words “free act and deed” were not included was nonetheless effective upon registration to put a good faith purchaser on notice of the transaction; therefore, the four-year statute of limitations for an effort to have the conveyance set aside as a fraudulent conveyance began to run at that point, and summary judgment was properly entered in favor of the transferee, on timeliness grounds, when such an action was commenced five years after the conveyance. Duffy v. Dwyer, 847 A.2d 266, 2004 R.I. LEXIS 86 (2004).

Chapter 7 Trustee’s complaint to recover a transfer under 11 USCS § 544(b) and R.I. Gen. Laws § 6-16-5(a) was not time-barred because the applicable state’s limitations period had not expired prior to the petition date. The petition date, not the date that the complaint was filed, was controlling. Richardson v. Preston (In re Antex, Inc.), 397 B.R. 168, 2008 Bankr. LEXIS 3649 (1st Cir. 2008).

6-16-10. Supplementary provisions.

Unless displaced by the provisions of this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement this chapter’s provisions.

History of Section. P.L. 1986, ch. 438, § 2.

NOTES TO DECISIONS

Preemption.

Rhode Island’s adoption of the Uniform Fraudulent Transfer Act did not preempt common law remedies applicable to fraudulent transactions. Fleet Nat'l Bank v. Valente (In re Valente), 360 F.3d 256, 2004 U.S. App. LEXIS 3979 (1st Cir. 2004).

Where a debtor had no equity in real property at the time the debtor transferred the property for no consideration to avoid claims of creditors, and thus the property was not an asset subject to attachment under the Uniform Fraudulent Transfer Act, a creditor was not precluded from enforcing its judgment lien against the debtor’s retained equitable interest in the property through a common law resulting trust. Fleet Nat'l Bank v. Valente (In re Valente), 360 F.3d 256, 2004 U.S. App. LEXIS 3979 (1st Cir. 2004).

6-16-11. Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

History of Section. P.L. 1986, ch. 438, § 2.

6-16-12. Short title.

This chapter may be cited as the “Uniform Voidable Transactions Act.”

History of Section. P.L. 1986, ch. 438, § 2; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.

Compiler’s Notes.

P.L. 2018, ch. 141, § 2, and P.L. 2018, ch. 236, § 2 enacted identical amendments to this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-13. Governing law.

  1. As used in this section, the following rules determine a debtor’s location:
    1. A debtor who is an individual is located at the individual’s principal residence.
    2. A debtor that is an organization and has only one place of business is located at its place of business.
    3. A debtor that is an organization and has more than one place of business is located at its chief executive office.
  2. A claim for relief in the nature of a claim for relief under this chapter is governed by the local law of the jurisdiction in which the debtor is located when the transfer is made or the obligation is incurred.

History of Section. P.L. 2018, ch. 141, § 3; P.L. 2018, ch. 236, § 3.

Compiler’s Notes.

P.L. 2018, ch. 141, § 3, and P.L. 2018, ch. 236, § 3 enacted identical versions of this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-14. Application to series organization.

  1. As used in this section:
    1. “Protected series” means an arrangement, however denominated, created by a series organization that, pursuant to the law under which the series organization is organized, has the characteristics set forth in subsection (a)(2).
    2. “Series organization” means an organization that, pursuant to the law under which it is organized, has the following characteristics:
      1. The organic record of the organization provides for creation by the organization of one or more protected series, however denominated, with respect to specified property of the organization, and for records to be maintained for each protected series that identify the property of or associated with the protected series.
      2. Debt incurred or existing with respect to the activities of, or property of or associated with, a particular protected series is enforceable against the property of or associated with the protected series only, and not against the property of or associated with the organization or other protected series of the organization.
      3. Debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with a protected series of the organization.
  2. A series organization and each protected series of the organization is a separate person for purposes of this chapter, even if for other purposes a protected series is not a person separate from the organization or other protected series of the organization.

History of Section. P.L. 2018, ch. 141, § 3; P.L. 2018, ch. 236, § 3.

Compiler’s Notes.

P.L. 2018, ch. 141, § 3, and P.L. 2018, ch. 236, § 3 enacted identical versions of this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-15. Supplementary provisions.

Unless displaced by the provisions of this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions.

History of Section. P.L. 2018, ch. 141, § 3; P.L. 2018, ch. 236, § 3.

Compiler’s Notes.

P.L. 2018, ch. 141, § 3, and P.L. 2018, ch. 236, § 3 enacted identical versions of this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-16. Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among the states enacting it.

History of Section. P.L. 2018, ch. 141, § 3; P.L. 2018, ch. 236, § 3.

Compiler’s Notes.

P.L. 2018, ch. 141, § 3, and P.L. 2018, ch. 236, § 3 enacted identical versions of this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

6-16-17. Relation to Electronic Signatures in Global and National Commerce Act.

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq., but does not modify, limit, or supersede § 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices described in § 103(b) of that act, 15 U.S.C. § 7003(b).

History of Section. P.L. 2018, ch. 141, § 3; P.L. 2018, ch. 236, § 3.

Compiler’s Notes.

P.L. 2018, ch. 141, § 3, and P.L. 2018, ch. 236, § 3 enacted identical versions of this section.

Applicability.

P.L. 2018, ch. 141, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

P.L. 2018, ch. 236, § 4, provides: “This act shall take effect upon passage [July 2, 2018]; provided, that: (1) The amendments apply to a transfer made or obligation incurred on or after the effective date of this act; (2) The amendments do not apply to a transfer made or obligation incurred before the effective date of this act; (3) The amendments do not apply to a right of action that has accrued before the effective date of this act; and (4) For the foregoing purposes, a transfer is made and an obligation is incurred at the time provided in § 6-16-6 . In addition, this act revises any reference to this chapter by its former title in other general laws of this state.”

Chapter 17 Bucket Shops

6-17-1. Definitions.

The following words and phrases used in this chapter, unless a different meaning is plainly required by the context, have the following meanings:

  1. “Bucketing” or “bucket shopping” means:
    1. The making of or offering to make any contract respecting the purchase or sale, either upon credit or upon margin, of any securities or commodities, in which both parties to the contract intend, or the keeper intends, that the contract shall be, or may be, terminated, closed, or settled according to or upon the basis of the public market quotations of prices made on any board of trade or exchange upon which the securities or commodities are dealt in, and without a bona fide purchase or sale of the securities or commodities;
    2. The making of or offering to make any contract respecting the purchase or sale, either upon credit or upon margin, of any securities or commodities in which both parties intend, or the keeper intends, that the contract shall be or may be deemed terminated, closed, or settled when the public market quotations of prices for the securities or commodities named in the contract shall reach a certain figure without a bona fide purchase or sale of the securities or commodities; or
    3. The making of or offering to make any contract respecting the purchase or sale, either upon credit or upon margin, of any securities or commodities in which both parties do not intend, or the keeper does not intend, the actual or bona fide receipt or delivery of the securities or commodities, but do intend, or the keeper does intend, a settlement of the contract based upon the differences in the public market quotations of prices at which the securities or commodities are, or are asserted to be, bought and sold.
  2. “Bucket shop” means any room, office, store, building, or other place where any contract prohibited by this chapter is made, or offered to be made.
  3. “Commodities” mean anything movable that is bought and sold.
  4. “Contract” means any agreement, trade, or transaction.
  5. “Keeper” means any person owning, keeping, managing, operating, or promoting a bucket shop, or assisting to keep, manage, operate, or promote a bucket shop.
  6. “Person” means an individual, partnership, corporation, or association, whether acting in his, her, or their own right or as the officer, agent, servant, correspondent, or representative of another.
  7. “Securities” mean all evidences of debt or property and options for the purchase and sale of debt or property, shares in any corporation or association, bonds, coupons, scrip, rights, choses in action, and other evidences of debt or property and options for the purchase or sale of debt or property.

History of Section. P.L. 1908, ch. 1565, § 1; G.L. 1909, ch. 353, § 1; G.L. 1923, ch. 406, § 1; G.L. 1938, ch. 614, § 1; G.L. 1956, § 6-17-1 .

Cross References.

Securities sales, § 7-11-101 et seq.

Comparative Legislation.

Bucket shops:

Conn. Gen. Stat. § 53-313 et seq.

Mass. Ann. Laws ch. 137, § 4 et seq.; ch. 271, § 35 et seq.

Collateral References.

Margin transactions or dealings in futures as within Constitution or statutes providing for recovery back of money paid on gaming transactions. 49 A.L.R. 1085.

Validity of transactions in futures. 83 A.L.R. 522.

6-17-2. Penalties for violations.

Any person who makes or offers to make any contract defined in § 6-17-1 , or who is the keeper of any bucket shop, shall, upon conviction, be punished by a fine not exceeding one thousand dollars ($1,000), or by imprisonment for not more than one year. Any person who shall be convicted of a second offense shall be punished by imprisonment for not more than five (5) years. The continuing of the keeping of a bucket shop, by any person, after the first conviction, shall be deemed a second offense under this chapter.

History of Section. P.L. 1908, ch. 1565, § 2; G.L. 1909, ch. 353, § 2; G.L. 1923, ch. 406, § 2; G.L. 1938, ch. 614, § 2; G.L. 1956, § 6-17-2 .

Collateral References.

Accomplice, participating witness as, within rule as to corroboration. 19 A.L.R.2d 1396.

6-17-3. Ouster of corporation from doing business.

If a domestic corporation shall be convicted of a second offense, the superior court shall have jurisdiction upon an action brought by the attorney general on the part of the state, and if a foreign corporation shall be convicted of a second offense, the superior court shall have jurisdiction in the same manner, to restrain the corporation from doing business in this state.

History of Section. P.L. 1908, ch. 1565, § 2; G.L. 1909, ch. 353, § 2; G.L. 1923, ch. 406, § 2; G.L. 1938, ch. 614, § 2; G.L. 1956, § 6-17-3 .

6-17-4. Furnishing quotations to aid prohibited contract.

Any person who shall communicate, receive, exhibit, or display in any manner any statement of quotations of prices of any securities or commodities with an intent to make or offer to make, or to aid in making or offering to make, any contract prohibited by this chapter, upon conviction shall be subject to the penalties provided in §§ 6-17-2 and 6-17-3 .

History of Section. P.L. 1908, ch. 1565, § 3; G.L. 1909, ch. 353, § 3; G.L. 1923, ch. 406, § 3; G.L. 1938, ch. 614, § 3; G.L. 1956, § 6-17-4 .

6-17-5. Disclosure of terms and parties to transactions — Failure to disclose as evidence.

Every person shall furnish, upon demand, to any customer or principal for whom the person has executed any order for the actual purchase or sale of any securities or commodities, either for immediate or future delivery, a written statement containing the names of the persons from whom the property was bought, or to whom it has been sold, as the fact may be, the time when, place where, and the price at which the property was either bought or sold. If the person shall refuse or neglect to furnish the statement within twenty-four (24) hours after the demand, the refusal or neglect shall be evidence that the purchase or sale was bucketing or bucket shopping within the terms of this chapter.

History of Section. P.L. 1908, ch. 1565, § 4; G.L. 1909, ch. 353, § 4; G.L. 1923, ch. 406, § 4; G.L. 1938, ch. 614, § 4; G.L. 1956, § 6-17-5 .

Chapters 18 TO 25 [Repealed And Transferred]

Chs. 18 - 25. [REPEALED AND TRANSFERRED]

Repealed Sections.

These chapters were either repealed or transferred to other locations by P.L. 1960, ch. 147, § 2. Sections 6-23-1 — 6-23-3 were transferred to §§ 6-26-6 6-26-8 ; §§ 6-24-45 — 6-24-51 were transferred to §§ 11-9.1-2 11-9.1-8 ; and §§ 6-25-51 — 6-25-56 were transferred to §§ 11-9.1-9 11-9.1-14 .

Chapter 26 Interest and Usury

6-26-1. Legal rate of interest — Post judgment interest.

Post judgment interest on any judgment, and interest in all business transactions where interest is secured or paid, shall be computed at the rate of twelve dollars ($12.00) on one hundred dollars ($100) for one year, unless a different rate is expressly stipulated.

History of Section. G.L. 1896, ch. 166, § 11; G.L. 1909, ch. 201, § 6; G.L. 1923, ch. 228, § 6; G.L. 1938, ch. 485, § 1; G.L. 1956, § 6-26-1 ; P.L. 1981, ch. 54, § 2; P.L. 1988, ch. 129, art. 21, § 1; P.L. 1989, ch. 555, § 3.

Cross References.

Interest on judgments, § 9-21-8 .

Comparative Legislation.

Rate of interest:

Conn. Gen. Stat. § 37-1 et seq.

Mass. Ann. Laws ch. 107, § 3.

NOTES TO DECISIONS

Applicability.

The rate fixed by the statute was applicable to bills in equity as well as actions at law. Sessions v. Richmond, 1 R.I. 298 , 1850 R.I. LEXIS 12 (1850).

This section provides the rate of applicable interest in proceedings to recover taxes imposed unconstitutionally. Gott v. Norberg, 417 A.2d 1352, 1980 R.I. LEXIS 1669 (1980).

This section applies to judgments entered in condemnation proceedings. Levcowich v. Chorney, 443 A.2d 1242, 1982 R.I. LEXIS 830 (1982).

Interest After Maturity of Debt.

A note payable in two years after its date with interest semiannually at the rate of nine per cent per annum operated to charge such interest only before payment date, and after maturity of the note the interest charged during the period of nonpayment was only the per cent provided for in this section. Pearce v. Hennessy, 10 R.I. 223 , 1872 R.I. LEXIS 11 (1872).

Interest on note or debt runs at the stipulated rate up to the time it becomes due and thereafter at the legal rate of six per cent in absence of stipulation to the contrary, but the parties are free to stipulate a different rate. Pearce v. Hennessy, 10 R.I. 223 , 1872 R.I. LEXIS 11 (1872); Pettis v. Ray, 12 R.I. 344 , 1879 R.I. LEXIS 37 (1879); Draper v. Horton, 22 R.I. 592 , 48 A. 945, 1901 R.I. LEXIS 64 (1901).

Where after maturity of notes debtor paid interest at a rate in excess of the legal rate, he was not entitled to charge the excess against the principal. Pettis v. Ray, 12 R.I. 344 , 1879 R.I. LEXIS 37 (1879).

In action on promissory note, plaintiff could recover interest stipulated by the parties after maturity in consideration of forebearance, even though rate exceeded the legal rate. Draper v. Horton, 22 R.I. 592 , 48 A. 945, 1901 R.I. LEXIS 64 (1901).

Interest in Absence of Stipulation.

In cases where interest is allowable, such interest will be allowed at the legal rate in absence of express stipulation as to the amount. Pearce v. Hennessy, 10 R.I. 223 , 1872 R.I. LEXIS 11 (1872); Pettis v. Ray, 12 R.I. 344 , 1879 R.I. LEXIS 37 (1879); Brown v. Hall, 14 R.I. 249 , 1883 R.I. LEXIS 51 (1883); Draper v. Horton, 22 R.I. 592 , 48 A. 945, 1901 R.I. LEXIS 64 (1901); White v. Kinniburgh, 57 R.I. 117 , 188 A. 517, 1936 R.I. LEXIS 67 (1936).

Where trustee made loans to cestuis que trustent in accordance with terms of trust deed contemplating such loans, trustee was entitled to interest at the rate provided by this section in absence of stipulation as to a higher rate. White v. Kinniburgh, 57 R.I. 117 , 188 A. 517, 1936 R.I. LEXIS 67 (1936).

Redemption From Foreclosure.

Because six per cent (6%) was hardly a realistic rate in the current money market, the supreme court determined that, upon redemption, interest on sums paid out by purchasers of real estate at a mortgage foreclosure sale should be computed at one per cent (1%) above the prime rate. Anderson v. Anderson, 107 R.I. 202 , 266 A.2d 56, 1970 R.I. LEXIS 760 (1970).

Retrospective Application of Increased Rate.

The 1981 amendment to this section, which increased the statutory rate from six to twelve percent, was intended to apply to inchoate obligations previously executed, that is, to have retrospective effect. Carner v. Grist Mill '76 Corp., 645 F. Supp. 331, 1986 U.S. Dist. LEXIS 24912 (D.R.I. 1986).

Collateral References.

Advance in price for credit sale as compared with cash sale as usury. 14 A.L.R.3d 1065.

Law of forum as governing rate of interest on judgments. 78 A.L.R. 1063.

6-26-2. Maximum rate of interest.

  1. Subject to the provisions of title 19, no person, partnership, association, or corporation loaning money to or negotiating the loan of money for another, except duly licensed pawnbrokers, shall, directly or indirectly, reserve, charge, or take interest on a loan, whether before or after maturity, at a rate that shall exceed the greater of twenty-one percent (21%) per annum or the alternate rate specified in subsection (b) of this section of the unpaid principal balance of the net proceeds of the loan not compounded, nor taken in advance, nor added on to the amount of the loan.
  2. The alternate rate means the rate per annum that is equal to nine percentage points (9%) plus an index that is the domestic prime rate as published in the Money Rates section of The Wall Street Journal on the last business day of each month preceding the later of the date of the debtor’s agreement or the date on which the interest rate is redetermined in accordance with the terms of the debtor’s agreement. If the Wall Street Journal ceases publication of the prime rate, the director of business regulation shall designate a substantially equivalent index. In the event an index is published as a range of rates, then the lowest rate shall be the index.
    1. For purposes of this section, interest shall not be construed to include:
      1. Charges pursuant to chapter 30 of title 27;
      2. Premiums for insurance in an amount not exceeding the reasonable value of property offered as security for a loan against any substantial risk of loss, liability, damage, or destruction in conformity with the insurance laws of this state;
      3. Premiums for insurance providing loss of income or involuntary unemployment coverage if the coverage is not a factor in the approval by the lender of the extension of credit and the debtor gives specific written indication that the cost of this coverage has been conspicuously disclosed to the debtor; that the debtor realizes that the coverage is not a condition for the extension of credit; and that the debtor voluntarily desires the coverage;
      4. Commercial loan commitment or availability fees to assure the availability of a specified amount of credit for a specified period of time or, at the borrower’s option, compensating balances in lieu of the fees;
      5. Reasonable attorney’s fees customarily charged for the preparation of loan, security, or mortgage documents and for the collection of defaulted loans;
      6. Fees for title examination or title insurance;
      7. Other customary and reasonable costs incident to the closing, supervision, and collection of loans in this state; and
      8. Consideration received for the redemption, sale, transfer, or other disposition of equity securities by a small business investment company licensed under the provisions of the “Small Business Investment Act of 1958”, 15 U.S.C. § 631 et seq., as amended, or an entity that would qualify for regulation as a business development company under the provisions of the “Investment Company Act of 1940”, 15 U.S.C. § 80a-1 et seq., as amended, whether or not the equity securities were acquired by a small business investment company or business development company in connection with or as an incident to the extension of credit.
    2. Any of the preceding charges, if paid or advanced by the lender, may be considered part of the net proceeds of the loan, and if paid by the debtor, shall not be deducted from the net proceeds of the loan.
  3. Notwithstanding anything to the contrary in this chapter or in any other provision of Rhode Island law, the provisions of this chapter shall not be applicable with respect to credit card transactions as defined in chapter 26.1 of this title. Chapter 26.1 shall apply exclusively to all such transactions.
  4. Notwithstanding the provisions of subsection (a) of this section and/or any other provision in this chapter to the contrary, there is no limitation on the rate of interest that may be legally charged for the loan to, or use of money by, a commercial entity, where the amount of money loaned exceeds the sum of one million dollars ($1,000,000) and where repayment of the loan is not secured by a mortgage against the principal residence of any borrower; provided, that the commercial entity has first obtained a pro forma methods analysis performed by a certified public accountant licensed in the state of Rhode Island indicating that the loan is capable of being repaid.

History of Section. P.L. 1909, ch. 434, § 1; P.L. 1912, ch. 838, § 1; P.L. 1923, ch. 228, § 7; G.L. 1938, ch. 485, § 3; G.L. 1956, § 6-26-2 ; P.L. 1966, ch. 269, § 1; P.L. 1967, ch. 157, § 1; P.L. 1981, ch. 173, § 2; P.L. 1982, ch. 17, §§ 1, 2; P.L. 1985, ch. 471, § 1; P.L. 1986, ch. 330, § 1; P.L. 1986, ch. 359, § 2; P.L. 1995, ch. 82, § 58; P.L. 1996, ch. 230, § 1; P.L. 2000, ch. 211, § 1; P.L. 2003, ch. 237, § 2; P.L. 2014, ch. 528, § 15.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Interest on negotiable instruments, § 6A-3-112 .

Maximum charges of pawnbrokers, § 19-26-18 .

Maximum interest rate in small loan lenders, § 19-14.2-8 .

NOTES TO DECISIONS

Construction.

Under the plain language of the statute, a commercial loan commitment fee is a fee to assure the availability of a specified amount of credit for a specified period of time; the term “commercial loan commitment fee” is defined clearly and unambiguously in the statute. Labonte (Am. Steel Coatings, LLC) v. New Eng. Dev. R.I., LLC, 93 A.3d 537, 2014 R.I. LEXIS 96 (2014).

Acceleration Clauses.

Inclusion of an acceleration clause in an otherwise legal promissory note did not render the note usurious even though it resulted in a rate of interest greater than the statutory maximum when enforced. Industrial Nat'l Bank v. Stuard, 113 R.I. 124 , 318 A.2d 452, 1974 R.I. LEXIS 1147 (1974); Chapman v. Rhode Island Hospital Trust Nat'l Bank, 444 F. Supp. 439, 1978 U.S. Dist. LEXIS 20267 (D.R.I. 1978).

Bonus or Service Charge.

No question of usury arose under this section where creditor contracted with debtor to collect payments on mortgages, which had been previously assigned to creditor as collateral security, and to apply net collections to the debt after deducting interest of eight per cent per annum and service charge or bonus of ten per cent per annum for renewal of overdue notes. Caton v. Grant, 68 R.I. 114 , 26 A.2d 620, 1942 R.I. LEXIS 40 (1942).

Business Transactions and Loans Distinguished.

Where a note was given to secure an extension of time for the past-due payment for merchandise purchased by the maker, the transaction was a business transaction and not a loan and, therefore, not subject to the restrictions of this section. Lancia v. Grossman's of Rhode Island, 100 R.I. 407 , 216 A.2d 517, 1966 R.I. LEXIS 451 (1966).

Conditional Sales.

Usury statute does not apply to a conditional sales contract. Luchesi v. Capitol Loan & Fin. Co., 83 R.I. 151 , 113 A.2d 725, 1955 R.I. LEXIS 23 (1955).

Conflict of Law.

Loan made in Rhode Island by lender and broker residing in Rhode Island to borrower residing in another state was subject to the usury laws of Rhode Island. Prescott v. Kelley, 170 A. 66, 1934 R.I. LEXIS 135 (1934).

Where agreements to lend money, execution and delivery of securities evidencing the loan, and the actual passing of consideration occurred in Rhode Island and the loan was payable in Rhode Island, such transaction was governed by the usury laws of Rhode Island, even though the loan was made to persons domiciled in Massachusetts and was secured by mortgages of chattels and realty situated in Massachusetts. St. Germain v. Lapp, 72 R.I. 42 , 48 A.2d 181, 1946 R.I. LEXIS 40 (1946).

Even when there is an applicable state statutory interest rate provision, federal bankruptcy courts have discretion to set an interest rate equitably appropriate to the circumstances of each case. Fischer Enters. v. Geremia (In re Kalian), 178 B.R. 308, 1995 Bankr. LEXIS 197 (Bankr. D.R.I. 1995).

Because the case involved purportedly usurious loans, which Rhode Island had a strong policy against, a determination that the loans were not usurious under Massachusetts law would be contrary to a fundamental public policy of Rhode Island; there was a stark difference between the usury laws of Massachusetts and Rhode Island, with Rhode Island providing much greater protection to borrowers (and to lenders) than Massachusetts, and therefore Rhode Island law governed the loans. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 1258, 2021 R.I. LEXIS 83 (R.I. 2021).

Defense.

This section does not recognize the good faith of the lender as a defense. In re Swartz, 37 B.R. 776, 1984 Bankr. LEXIS 6252 (Bankr. D.R.I. 1984).

Evidence of Usurious Activity.

Evidence that both defendants acted in concert in making a loan, in demanding payment therefor, and in achieving receipt of funds significantly beyond the statutory limit of 21 percent per annum was sufficient to deny a motion for judgment of acquittal by the trial justice. State v. Sepe, 122 R.I. 560 , 410 A.2d 127, 1980 R.I. LEXIS 1423 (1980).

Evidence that a loan and the assignment of a consulting fee were finalized simultaneously and that respective payments were due on the same date, made out a prima facie case of usury, where the assignment arguably constituted hidden, additional interest, apart from the permissible 20 percent rate charged under the loan. Focus Inv. Assocs. v. American Title Ins. Co., 992 F.2d 1231, 1993 U.S. App. LEXIS 10904 (1st Cir. 1993).

Face of Contract.

The defense of usury could not be successfully asserted against the holder in due course of a note which was not usurious on its face, although utilization of the 365/360 method of interest calculation had resulted in an effective annual interest rate 1/72 greater than the specified rate. Panteleakis v. Kalams, 659 F. Supp. 212, 1987 U.S. Dist. LEXIS 3681 (D.R.I. 1987).

Promissory note for $100,000 securing a mortgage on a debt of about $68,000 from a son to his father did not establish a usurious 32% interest rate prohibited by R.I. Gen. Laws §§ 6-26-2(a) , 6-26-4(a) ; the trial court properly found that the note’s facial 12% rate applied to funds transferred by the father to the son before the note was signed, less amounts covered by a partial release, and that recovery of sums transferred after the note was signed would be without interest. Opella v. Opella, 896 A.2d 714, 2006 R.I. LEXIS 77 (2006).

Loan Transactions.

A negotiable promissory note, executed to satisfy an existing debt providing for payment of costs of collection, including attorney’s fee in case of default and for acceleration of maturity in case of default, secured by a mortgage of real estate containing the usual statutory power of sale, is a loan transaction within the contemplation of the statute and subject to the provisions thereof. Lancia v. Grossman's of Rhode Island, 99 R.I. 337 , 207 A.2d 607, 1965 R.I. LEXIS 441 (1965).

Modified loan documents qualified for the usury exemption under R.I. Gen. Laws § 6-26-2(e) where a borrowers’ certification was provided, the borrowers failed to establish a prima facie claim of economic duress, and the borrowers were commercial entities; further, a forbearance agreement covered the lenders to avoid liability for usury, such that the lenders were entitled to summary judgment. Commerce Park Realty, LLC v. HR2-A Corp., 2012 U.S. Dist. LEXIS 146436 (D.R.I. Oct. 10, 2012).

Lenders failed to demonstrate that the required analyses were “obtained” by the borrowers, pursuant to the clear language of the statute, because the record was devoid of any competent evidence that the required pro forma methods analyses were actually performed; the lenders were not only unable to produce the requisite analyses, but they were also unable to identify the certified public accountant licensed to do business in Rhode Island who allegedly performed those analyses. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 1258, 2021 R.I. LEXIS 83 (R.I. 2021).

Lenders failed to demonstrate that the required analyses were “obtained” by the borrowers, and the exception contained in subsection (e) did not apply because lenders failed to show that receiverships first obtained the required pro forma methods analyses prior to charging interest rates in excess of 21% per annum. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 1258, 2021 R.I. LEXIS 83 (R.I. 2021).

Accrual of interest at rates in excess of 21% per annum was deemed usurious under the usury law because the interest accrued on the loans for which receiverships were responsible. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 1258, 2021 R.I. LEXIS 83 (R.I. 2021).

Release and waiver of claims provision contained in the forbearance agreement did not fall within the narrow category of cases that permitted a debtor’s release of a usury claim because the nature of the execution of the agreement was highly coercive in light of the pressing financial needs of the receiverships and borrowers; there was no evidence the receiverships and the borrowers entered into the forbearance agreement for the purpose of avoiding or settling litigation. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 1258, 2021 R.I. LEXIS 83 (R.I. 2021).

Trial court did not err by failing to find that the pre-2000 debt remained due and payable because there was no indication that the refinanced loans were simply amendments to the loans that formed the basis of the pre-2000 debt; the refinanced loans carried higher interest rates than the previous loans, established different terms of repayment, and did not reflect that any prior obligations of the borrowers were preserved, and the refinanced loans extinguished the pre-2000 loans. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 1258, 2021 R.I. LEXIS 83 (R.I. 2021).

Maximum Interest in Advance.

Reservation of maximum rate of interest in advance by deducting interest from amount of loan constituted usury and entitled borrower to recover amount of loan from lender. Burdon v. Unrath, 47 R.I. 227 , 132 A. 728, 1926 R.I. LEXIS 43 (1926).

Savings Clause.

Usury savings clause in a commercial loan document did not validate an otherwise usurious contract, and thus, the promissory note at issue was void as a matter of law because the lender charged the borrower interest in excess of the permissible 21 percent maximum. NV One, LLC v. Potomac Realty Capital, LLC, 84 A.3d 800, 2014 R.I. LEXIS 17 (2014).

Settlement in Advance.

If borrower voluntarily negotiates a settlement of balance in advance of final payment, there is no violation of usury statute even though sum paid is in excess of legal interest. Luchesi v. Capitol Loan & Fin. Co., 83 R.I. 151 , 113 A.2d 725, 1955 R.I. LEXIS 23 (1955).

A debtor by his voluntary prepayment cannot render usurious that which but for such act would be free from usury. Reichwein v. Kirschenbaum, 98 R.I. 340 , 201 A.2d 918, 1964 R.I. LEXIS 176 (1964).

An interest rate not usurious if the loan runs to maturity does not become so upon the debtor’s exercise of a prepayment option by reason of the fact that the rebate of interest computed on the Rule of 78’s method causes the interest paid to exceed the legal rate. Marley v. Consolidated Mortgage Co., 102 R.I. 200 , 229 A.2d 608, 1967 R.I. LEXIS 671 (1967).

Usurious Loan Void.

Superior court properly found that a loan was usurious and void because a fee contained in the loan agreement was not a commercial loan commitment fee since it did not assure the availability of a specified amount of credit for a specified time; the fee was a part of the interest being charged on the loan, and the fee substantially exceeded the 21 percent interest allowed. Labonte (Am. Steel Coatings, LLC) v. New Eng. Dev. R.I., LLC, 93 A.3d 537, 2014 R.I. LEXIS 96 (2014).

Collateral References.

Advance in price for credit sale as compared with cash sale as usury. 14 A.L.R.3d 1065.

Agreement for share in earnings of or income from property in lieu of, or in addition to, interest as usurious. 16 A.L.R.3d 475.

Application of usury laws to transactions characterized as “leases”. 94 A.L.R.3d 640.

Borrower’s initiation of, or fraud contributing to, usurious transaction as affecting rights or remedies of the parties. 16 A.L.R.3d 510.

Computing interest on basis of 360 days in year, 30 days in month, or the like, as usury. 35 A.L.R.2d 842.

Constitutionality of statute regulating rate of interest on small loans. 69 A.L.R. 581; 125 A.L.R. 743; 149 A.L.R. 1424.

Contingency as to borrower’s receipt of money or other property from which loan is to be repaid as rendering loan usurious. 92 A.L.R.3d 623.

Enforceability of provision in loan commitment agreement authorizing lender to charge “standby” fee, “commitment” fee, or similar deposit. 93 A.L.R.3d 1156.

Leaving part of loan on deposit with lender as usury. 92 A.L.R.3d 769.

Liability for the statutory penalty of persons other than the offending lender in a usurious loan transaction. 4 A.L.R.3d 650.

National banks as subject to state laws fixing rate of interest. 101 A.L.R. 751.

Payments under ostensibly independent contract as usury. 81 A.L.R.2d 1280.

Provision for interest after maturity as a rate in excess of legal rate as usurious or otherwise illegal. 28 A.L.R.3d 449.

Quantum, degree, or weight of evidence to sustain usury charge. 51 A.L.R.2d 1087.

Reformation of usurious contract. 74 A.L.R.3d 1239.

Usury as affected by acceleration clause. 66 A.L.R.3d 650.

Usury as affected by mistake in amount or calculation of interest or service charges for loan. 11 A.L.R.3d 1498.

Usury, effect of borrower’s agreement to pay, guarantee, or secure some other debt owed to or by lender. 31 A.L.R.3d 763.

Usury in connection with loan calling for variable interest rate. 18 A.L.R.4th 1068.

Validity and construction of revolving charge account contract or plan. 41 A.L.R.3d 682.

Validity under usury laws of provision calling for repayment of principal which exceeds sum loaned by amount reflecting any decline in purchasing power of dollar. 90 A.L.R.3d 763.

What is “compound interest” within meaning of statutes prohibiting the charging of such interest. 10 A.L.R.3d 421.

6-26-3. Criminal usury.

Any person, who, on his or her own behalf or on behalf of any other person, partnership, corporation, or association, shall willfully and knowingly violate any of the provisions of § 6-26-2 shall be guilty of criminal usury and shall be imprisoned for not more than five (5) years.

History of Section. P.L. 1909, ch. 434, § 2; G.L. 1923, ch. 228, § 8; G.L. 1938, ch. 485, § 3; G.L. 1956, § 6-26-3 ; P.L. 1970, ch. 263, § 1; P.L. 2014, ch. 528, § 15.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Evidence of Usurious Activity.

Evidence that both defendants acted in concert in making a loan, in demanding payment therefor, and in achieving receipt of funds significantly beyond the statutory limit of 21 percent per annum was sufficient to deny a motion for judgment of acquittal by the trial justice. State v. Sepe, 122 R.I. 560 , 410 A.2d 127, 1980 R.I. LEXIS 1423 (1980).

Collateral References.

National banks as subject to state statute as to criminal liability for usury. 101 A.L.R. 756; 758.

6-26-4. Usurious contracts — Penalty.

  1. Every contract made in violation of any of the provisions of § 6-26-2 , and every mortgage, pledge, deposit, or assignment made or given as security for the performance of the contract, shall be usurious and void.
  2. Nothing contained in this section shall affect the rights of an endorsee or transferee of a negotiable instrument who purchases the instrument before maturity, for value, and without notice of its usurious character.
  3. Nothing contained in this section shall affect the rights, duties or liabilities of any persons acting under the provisions of title 19, and if the borrower shall, either before or after suit, make any payment on the contract, either of principal or interest, or of any part of either, and whether to the lender or to any assignee, endorsee, or transferee of the contract, the borrower shall be entitled to recover from the lender the amount so paid in an action of the case. Receipts shall be given whenever payments are made of either principal or interest.
  4. The provisions previously stated in this section shall not apply to any financial institution and its subsidiaries, credit union, or bank holding company and its subsidiaries, organized under the laws of the state; any other entity regulated by the department of business regulation; a national bank and its subsidiaries; federal savings and loan association or federal credit union; or a bank, company, or association collectively and individually referred to as a regulated financial institution. In the event a regulated financial institution knowingly contracts or charges a usurious rate of interest in violation of any of the provisions of § 6-26-2 , it shall forfeit the entire interest on the debt. In case the usurious rate of interest has been paid, the person by whom it has been paid, or his or her legal representative, may recover from the regulated financial institution in an action in the nature of an action on the debt, twice the amount of the interest so paid, provided that the action is commenced within two (2) years from the time the usurious transaction occurred.

History of Section. P.L. 1909, ch. 434, § 3; G.L. 1923, ch. 228, § 9; G.L. 1938, ch. 485, § 4; G.L. 1956, § 6-26-4 ; P.L. 1982, ch. 437, § 1; P.L. 1995, ch. 82, § 58; P.L. 2014, ch. 528, § 15.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Investigation and proceedings against racketeer influenced and corrupt organizations, § 7-15-1 et seq.

NOTES TO DECISIONS

Action for Cancelation.

In order for a borrower to obtain cancelation of a usurious contract in equity he must as a condition precedent do equity by paying the principal of the loan, but he is not required to pay interest at the legal rate. St. Germain v. Lapp, 72 R.I. 42 , 48 A.2d 181, 1946 R.I. LEXIS 40 (1946). (Modifying Moncrief v. Palmer, 44 R.I. 37 , 114 A. 181, 17 A.L.R. (1921), as to the requirement of payment of interest at the legal rate.)

In a proceeding in equity a lender of money at a usurious rate cannot be heard to assert a right to legal interest because as an usurer he has no such legal right. St. Germain v. Lapp, 72 R.I. 42 , 48 A.2d 181, 1946 R.I. LEXIS 40 (1946).

Action for Principal and Interest.

Where borrower brought action at law under this statute for both principal and interest, he was not required to follow equitable principles and to offer to pay the principal plus the legal rate of interest. Nazarian v. Lincoln Fin. Corp., 77 R.I. 497 , 78 A.2d 7, 1951 R.I. LEXIS 115 (1951).

Awarding recovery of both principal and interest in action at law brought under this section was proper. Nazarian v. Lincoln Fin. Corp., 77 R.I. 497 , 78 A.2d 7, 1951 R.I. LEXIS 115 (1951).

Loans made at rates of interest in excess of the maximum allowed by law are illegal and unenforceable as usurious between the maker and original holder or parties to the contract. Raheb v. Lemenski, 115 R.I. 576 , 350 A.2d 397, 1976 R.I. LEXIS 1561 (1976).

Subsection (c) contains no ambiguity and therefore the Supreme Court applies the language of the statute in accordance with its plain and ordinary meaning; the language of subsection (c) plainly shows that the Legislature assigned the right to recover disgorgement payments to those borrower(s) who made payments. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 868, 2021 R.I. LEXIS 85 (R.I. 2021).

Subsection (c) postulates two threshold requirements for a party to be entitled to disgorgement payments: (1) the party must be a named “borrower” on the usurious loan, and (2) that named borrower must make any payment to the lender, irrespective of whether value is rendered directly or indirectly; if both of these conditions are met, the borrower is entitled to recover from the lender the amount so paid. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 868, 2021 R.I. LEXIS 85 (R.I. 2021).

Because there was no evidence in the record of a payment made by borrowers in accordance with subsection (c), a factual predicate, there was no “amount so paid” for them to recover, and thus the trial court properly granted lenders summary judgment on the borrowers’ disgorgement claims; the borrowers could not receive reimbursement for payments that were never made, nor would they and the receiverships be accorded equal treatment when only the receiverships made usurious payments to the lenders. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 868, 2021 R.I. LEXIS 85 (R.I. 2021).

Because the trial justice properly determined that borrowers did not meet the requirements set forth in subsection (c) to recover disgorgement payments, it properly dismissed the borrowers’ claims for punitive damages, as those claims failed as a matter of law; an award of punitive damages is in addition to an award of compensatory damages, and thus the trial justice properly determined that punitive damages had to be supported by an award of compensatory damages. Commerce Park Realty, LLC v. HR2-A Corp., 253 A.3d 868, 2021 R.I. LEXIS 85 (R.I. 2021).

Adjustment Upon Payment Before Maturity.

An interest rate not usurious if the loan runs to maturity does not become so upon the debtor’s exercise of a prepayment option by reason of the fact that the rebate of interest computed on the Rule of 78’s method causes the interest paid to exceed the legal rate. Marley v. Consolidated Mortgage Co., 102 R.I. 200 , 229 A.2d 608, 1967 R.I. LEXIS 671 (1967).

Construction With § 19-25.2-29.

The penalty provisions of both the Secondary Mortgage Loan Act, § 19-25.2-29 [repealed], and the usury statute are identical in that any contract or mortgage which is violative of either statute is void. In re Harrington, 6 B.R. 655, 1980 Bankr. LEXIS 4259 (Bankr. D.R.I. 1980).

Debtor and Creditor Relationship.

Where plaintiff executed note as security for loan obtained by his son from defendant and later paid the note, plaintiff was not a guarantor and the relationship of debtor and creditor existed between plaintiff and defendant, so that plaintiff was entitled to recover usurious payments made under such note. Burdon v. Unrath, 46 R.I. 89 , 125 A. 204, 1924 R.I. LEXIS 52 (1924).

Discharge or Extension of Previous Debts.

Where money borrowed was used to pay off a previous loan owed to a different party, the amount of discount that the borrower received in paying off the previous loan could not be credited to the lender as a deduction from the amount of interest the borrower paid on the second loan so as to reduce the interest from a usurious rate to a legal rate. St. Germain v. Lapp, 72 R.I. 42 , 48 A.2d 181, 1946 R.I. LEXIS 40 (1946).

Where an existing loan was paid off and the mortgage securing such loan was discharged by means of a new loan obtained from a different party at an usurious rate of interest, the rule that an usurious bonus paid for the extension of a prior loan will not invalidate the transaction but will be applied in reducing the amount owed had no application. St. Germain v. Lapp, 72 R.I. 42 , 48 A.2d 181, 1946 R.I. LEXIS 40 (1946).

Transaction in which an existing loan was paid off and mortgage securing such loan was discharged by means of a new loan obtained from a different party with an usurious interest rate was not a business transaction whereby an extension of time was purchased for benefit of the purchaser but constituted a loan of money at an usurious rate. St. Germain v. Lapp, 72 R.I. 42 , 48 A.2d 181, 1946 R.I. LEXIS 40 (1946).

Evidence.

Where evidence of entire proceedings surrounding obtaining of loan was necessary for an understanding of the situation, such evidence was relevant and properly admissible in action for repayment of usurious loan. Burdon v. Unrath, 46 R.I. 89 , 125 A. 204, 1924 R.I. LEXIS 52 (1924).

Promissory note for $100,000 securing a mortgage on a debt of about $68,000 from a son to his father did not establish a usurious 32% interest rate prohibited by R.I. Gen. Laws §§ 6-26-2(a) , 6-26-4(a) ; the trial court properly found that the note’s facial 12% rate applied to funds transferred by the father to the son before the note was signed, less amounts covered by a partial release, and that recovery of sums transferred after the note was signed would be without interest. Opella v. Opella, 896 A.2d 714, 2006 R.I. LEXIS 77 (2006).

Intent of Lender.

Where mistake of lender was one of law rather than of fact, the fact that lender did not intend to violate the usury statute did not excuse the violation. Burdon v. Unrath, 47 R.I. 227 , 132 A. 728, 1926 R.I. LEXIS 43 (1926).

Parties in Pari Delicto.

Fact that plaintiff seeking to recover payment made to defendant under usurious note had taken a usurious note from a third party did not render plaintiff and defendant in pari delicto so as to defeat plaintiff’s right of recovery where plaintiff’s contract with the third party had no relation to the contract between plaintiff and defendant. Burdon v. Unrath, 46 R.I. 89 , 125 A. 204, 1924 R.I. LEXIS 52 (1924).

Pleadings.

A complaint for damages for a usurious contract is insufficient if it does not allege that plaintiff has paid something on the usurious obligation. Rowell v. Kaplan, 103 R.I. 60 , 235 A.2d 91, 1967 R.I. LEXIS 576 (1967).

Usurious Interest as Consideration.

The mere release of a part of usurious interest does not of itself constitute a valid consideration for an alleged general release. Nazarian v. Lincoln Fin. Corp., 77 R.I. 497 , 78 A.2d 7, 1951 R.I. LEXIS 115 (1951).

Usurious Loan Void.

Although in law a mortgage is of no effect as security for a usurious contract, equity will treat the mortgage as valid security for the amount it regards as justly due from the borrower to the lender. Moncrief v. Palmer, 44 R.I. 37 , 114 A. 181, 1921 R.I. LEXIS 41 (1921).

Superior court properly found that a loan was usurious and void because a fee contained in the loan agreement was not a commercial loan commitment fee since it did not assure the availability of a specified amount of credit for a specified time; the fee was a part of the interest being charged on the loan, and it substantially exceeded the 21 percent interest allowed. Labonte (Am. Steel Coatings, LLC) v. New Eng. Dev. R.I., LLC, 93 A.3d 537, 2014 R.I. LEXIS 96 (2014).

Waiver.

Waiver of a usury defense should be permitted when it is freely and knowingly made after reasoned reflection for the legitimate purpose of avoiding or settling litigation. De Fusco v. Giorgio, 440 A.2d 727, 1982 R.I. LEXIS 788 (1982).

Collateral References.

Accommodation party’s rights as against accommodated party after payment, as affected by usury. 36 A.L.R. 559; 77 A.L.R. 699.

Application of usury laws to transactions characterized as “leases”. 94 A.L.R.3d 640.

Bona fide purchaser of negotiable paper, usurious rate of discount as affecting one’s status as. 91 A.L.R. 1147.

Borrower’s initiation of, or fraud contributing to, usurious transaction as affecting rights or remedies of the parties. 16 A.L.R.3d 510.

Campaign or concerted action in interest of public by bar association or other group against usurious or illegal practices, or for investigation of business or other activities with which such practices may be associated. 132 A.L.R. 1177.

Cloud on title, mortgage invalid for usury as. 78 A.L.R. 262.

Compound interest, agreement to pay as usurious. 37 A.L.R. 335; 76 A.L.R. 1484.

Conditional sales contract, effect of usury on. 152 A.L.R. 598.

Contingency as to borrower’s receipt of money or other property from which loan is to be repaid as rendering loan usurious. 92 A.L.R.3d 623.

Contract not tainted with usury in inception as affected by subsequent transaction in connection therewith. 102 A.L.R. 573.

Delay in paying over proceeds of loan to borrower as affecting question of usury. 76 A.L.R. 1467.

De minimis non curat lex as applied to usury. 44 A.L.R. 190.

Earnings or income from property, agreement to share in, in addition to interest, as usurious. 16 A.L.R.3d 475.

Enforceability of provision in loan commitment agreement authorizing lender to charge “standby” fee, “commitment” fee, or similar deposit. 93 A.L.R.3d 1156.

Expense of efforts to collect or settle, inclusion of, in note extending time of payment. 21 A.L.R. 899; 105 A.L.R. 813.

Fraud of borrower contributing to execution of usurious contract as affecting rights or remedies of parties. 16 A.L.R.3d 510.

General characteristics and essentials of usury. 21 A.L.R. 799; 53 A.L.R. 743; 63 A.L.R. 823; 105 A.L.R. 795.

Impairing obligation of contracts by statutes in relation to usury. 87 A.L.R. 465; 470.

Interest on interest taken in advance, validity of agreement to pay. 37 A.L.R. 347; 76 A.L.R. 1433; 76 A.L.R. 1484.

Junior mortgagee’s rights to attack senior mortgage as usury. 59 A.L.R. 342; 121 A.L.R. 879.

Leaving part of loan on deposit with lender as usury. 92 A.L.R.3d 769.

Liability for the statutory penalty of persons other than the offending lender in a usurious loan transaction. 4 A.L.R.3d 650.

Life insurance, requiring borrower to take out, as rendering loan usurious. 21 A.L.R. 816; 876; 53 A.L.R. 756; 63 A.L.R. 823; 105 A.L.R. 795; 811 A.L.R.2d 703.

Loan, usury in, because of commissions of intermediaries as affected by lender’s knowledge of such commissions. 21 A.L.R. 830; 850; 53 A.L.R. 753; 755; 63 A.L.R. 823; 833; 834; 105 A.L.R. 795; 805; 807; 52 A.L.R.2d 703.

Moral obligation as consideration for new promise to repay usurious loan. 8 A.L.R.2d 787.

Mortgagor’s deed to mortgage holder as extinguishing equity of redemption as affected by usury. 129 A.L.R. 1530.

National banks, applicability to, of state statute as to remedy for usury. 101 A.L.R. 755.

Negotiable Instruments Law as affecting defense of usury. 5 A.L.R. 1447; 95 A.L.R. 735.

Note or other obligation payable on demand for an amount in excess of amount actually loaned as usurious. 127 A.L.R. 460.

Obligations covering deferred payments of purchase money, or extension thereof, as loan or forebearance within usury laws. 91 A.L.R. 1105.

Officer’s or employee’s acceptance of secret compensation in making a loan by bank as charging bank with usury. 52 A.L.R.2d 703.

Reformation of usurious contract. 74 A.L.R.3d 1239.

Renewal, extension, or forebearance, usury in, as affecting indebtedness originally valid. 3 A.L.R. 877.

Repayment of, or option to repay, loan before maturity as affecting question of usury. 75 A.L.R.2d 1265.

Sinking fund, usury as affected by provision for. 119 A.L.R. 1490.

Small loans acts, rights and remedies under provisions of, regarding fees, charges, etc., in addition to interest. 143 A.L.R. 1323.

Surety, obligee’s concealment of usury as fraud against. 8 A.L.R. 1505.

Usurious nature of provision in promissory note or other evidence of indebtedness for payment, as for attorney’s fees, expenses, and costs of collection, of specified percentage of note. 17 A.L.R.2d 295; 316.

Usury as predicable on bonuses in sale of commercial paper or other choses in action. 165 A.L.R. 677.

Validity and construction of provision imposing “late charge” or similar exaction for delay in making periodic payments on note, mortgage, or instalment sale contract. 63 A.L.R.3d 50.

Validity of voluntary conveyance consideration of which was usury. 102 A.L.R. 483.

Validity under usury laws of provision calling for repayment of principal which exceeds sum loaned by amount reflecting any decline in purchasing power of dollar. 90 A.L.R.3d 763.

Warehouseman, right of purchaser of usurious receipt against. 38 A.L.R. 1206.

Who other than borrower may avail himself of latter’s right to recover penalty for usurious payment. 82 A.L.R. 1008; 134 A.L.R. 1335.

6-26-5. Pawnbrokers exempt.

Sections 6-26-2 6-26-4 shall not apply to loans made by duly licensed pawnbrokers on the security of a deposit of personal property.

History of Section. P.L. 1909, ch. 434, § 4; G.L. 1923, ch. 228, § 10; G.L. 1938, ch. 485, § 5; G.L. 1956, § 6-26-5 .

Cross References.

Pawnbrokers, § 19-26-1 et seq.

6-26-6. Damages and interest on foreign protested bill of exchange.

Whenever any foreign bill of exchange is or shall be drawn or endorsed within this state for the payment of any sum of money, and the bill is or shall be returned from any place or country outside the limits of the United States protested for nonacceptance or nonpayment, the drawer or endorser shall be subject to the payment of ten percent (10%) damages on the bill and charges for protest and the bill shall carry an interest of six percent (6%) per annum from the date of the protest.

History of Section. G.L. 1896, ch. 166, § 1; G.L. 1909, ch. 201, § 1; G.L. 1923, ch. 228, § 1; G.L. 1938, ch. 456, § 1; G.L. 1956, § 6-23-1; P.L. 2014, ch. 528, § 15.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26-7. Action on foreign protested bill.

Any person having a right to demand any sum of money upon a foreign protested bill of exchange as stated in § 6-26-6 may commence and prosecute an action for principal, damages, interest, and charges of protest against the drawers and endorsers, jointly or severally, or against either of them separately; and judgment shall and may be given for the principal, damages, charges, and interest upon the principal after the rate established in § 6-26-6 , to the time of the judgment, together with costs of suit.

History of Section. G.L. 1896, ch. 166, § 2; G.L. 1909, ch. 201, § 2; G.L. 1923, ch. 228, § 2; G.L. 1938, ch. 456, § 2; G.L. 1956, § 6-23-2; P.L. 2001, ch. 86, § 19; P.L. 2014, ch. 528, § 15.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26-8. Damages and interest on inland protested bill.

Whenever any inland bill of exchange shall be drawn or endorsed within this state for the payment of any sum of money outside this state, and the bill shall be protested for nonacceptance or nonpayment, the drawer or endorser shall be subject to the payment of five percent (5%) damages on the bill and charges of protest, and the bill shall carry an interest of six percent (6%) per annum from the date of the protest.

History of Section. G.L. 1896, ch. 166, § 3; G.L. 1909, ch. 201, § 3; G.L. 1923, ch. 228, § 3; G.L. 1938, ch. 456, § 3; G.L. 1956, § 6-23-3.

6-26-9. Penalty for possession of records of usurious transactions.

Any person who shall, with knowledge of the contents, have in his or her possession any document, record, paper, instrument, or other writing that shall record or evidence a usurious debt in violation of the provisions of § 6-26-2 , shall be imprisoned for not more than one year or fined not more than five hundred dollars ($500), or both.

History of Section. P.L. 1970, ch. 263, § 2.

6-26-10. Possession of usury records — Evidence of knowledge.

The possession by any person, other than a public official in the course of his or her duty, of any document, record, paper, instrument, or other writing that shall record or evidence a usurious debt in violation of § 6-26-2 shall be presumptive evidence of possession with knowledge of its contents in violation of § 6-26-9 .

History of Section. P.L. 1970, ch. 263, § 2.

Chapter 26.1 Credit Card Lending

6-26.1-1. Definitions.

For purposes of this chapter, the following definitions shall apply:

  1. “Credit card device” includes any means of making a credit card transaction available to a borrower pursuant to a credit card plan, including, but not limited to, a card, draft or check, identification code, other means of identification, or other credit device or code, whether made directly or indirectly by means of telephone, point of sale terminal, automated teller machine, computer or other electronic or other communication or device, or through the mail.
  2. “Credit card lender” or “lender” means any entity that is a lending institution as defined by § 19-9-1 , or licensee as defined by § 19-14-1 , that offers or extends credit in the form of a credit card transaction.
  3. “Credit card transaction” means any loan or extension of credit made pursuant to a credit card plan. Without limitation of the foregoing, a credit card transaction may be extended under a credit card plan by a credit card lender’s acquisition of obligations arising out of the honoring by a merchant or other third-party; a credit card lender or other financial institution (whether chartered or organized under the laws of this or any other state, the District of Columbia, the United States or any district, territory or possession of the United States, or any foreign country); or a government or governmental subdivision or agency of a credit card device.
  4. “Credit card plan” or “plan” means any arrangement or plan between a borrower and a credit card lender for open-end, revolving extensions of credit made available through a credit card device, provided, however, said “credit card plan” or “plan” does not include an extension of credit the repayment of which is secured by real property.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Extension of Credit Under Consumer Credit Protection Act Provisions (18 U.S.C. §§ 891 to 894) Prohibiting Extortionate Credit Transactions. 35 A.L.R. Fed. 3d Art. 2 (2018).

6-26.1-2. Authorization to make loans — Usury.

Any credit card lender may, subject to any limitations on lending authorities contained in its charter or otherwise imposed by law, offer and extend credit to a borrower and in connection with the credit may charge and collect interest, interest fees, and charges, and other charges permitted by this chapter and may take any security as collateral in connection with it that may be acceptable to the credit card lender.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26.1-3. Variable rates.

If the agreement governing a credit card plan so provides, the periodic percentage rate or rates of interest under the plan may vary in accordance with a schedule or formula. The periodic rate or rates may vary from time to time as the rate determined in accordance with the schedule or formula varies and the periodic rate or rates, as so varied, may be made applicable to all or any part of outstanding, unpaid indebtedness under the plan on or after the first day of the billing cycle that contains the effective date of the variation, including any indebtedness arising out of purchases made or loans obtained prior to the variation in the periodic percentage rate or rates. Without limitation, a permissible schedule or formula pursuant to this section may include provisions in the agreement governing the plan for a change in the periodic percentage rate or rates of interest applicable to all or any part of outstanding unpaid indebtedness, whether by variation of the then-applicable periodic percentage rate or rates of interest; variation of an index or margin; or otherwise contingent upon the happening of any event or circumstance specified in the plan, which event or circumstance may include, but not be limited to, the failure of the borrower to perform in accordance with the terms of the plan.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26.1-4. Interest.

A credit card lender may charge and collect interest under a credit card plan on outstanding unpaid indebtedness in the borrower’s account under the plan at any daily, weekly, monthly, annual, or other periodic percentage rate or rates that the agreement governing the plan provides or as established in the manner provided in the agreement governing the plan. If the agreement governing the plan so provides, the outstanding unpaid indebtedness may include the amount of any interest, interest fees and charges, and other charges outstanding. Interest may be calculated using an average daily balance; two-cycle, average daily balance; adjusted balance; previous balance method; or using any other balance computation method provided for in the agreement governing the plan. Credit card transactions may be included in the outstanding unpaid indebtedness as of any time as may be specified in the agreement governing the plan. Periodic billing cycles may be established in any manner and shall have the duration that may be specified in the agreement governing the plan.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26.1-5. Interest fees and charges.

  1. In addition to, or in lieu of, interest at a periodic percentage rate or rates as provided in § 6-26.1-4 , a credit card lender may, if the agreement governing the credit card plan so provides, charge and collect, as interest, in any manner or form that the plan may provide, one or more of the following:
    1. Daily, weekly, monthly, annual, or other periodic charges in any amount or amounts that the agreement may provide for the privileges made available to the borrower under the plan;
    2. A transaction charge or charges in any amount or amounts that the agreement may provide for each separate purchase, loan, or other transaction under the plan;
    3. A minimum charge for each daily, weekly, monthly, annual or other scheduled billing period under the plan during any portion of which there is an outstanding unpaid indebtedness under the plan;
    4. Reasonable fees for services rendered or for reimbursement of expenses incurred in good faith by the credit card lender or its agents in connection with the plan, or other reasonable fees incident to the application for and the opening, administration and termination of a plan including, without limitation, commitment, application and processing fees; official fees and taxes; costs incurred by reason of examination of title, inspection, appraisal, recording, mortgage satisfaction, or other formal acts necessary or appropriate to the security for the plan; and filing fees;
    5. Returned payment charges or charges imposed for the return of a draft or check drawn on a credit card plan evidencing an extension of credit under the plan;
    6. Documentary evidence charges;
    7. Stop payment fees;
    8. Overlimit charges;
    9. Automated teller machine charges or other electronic or interchange fees or charges;
    10. Prepayment charges authorized under subsection (b) of this section; and
    11. Subject to any limitations contained in this chapter, any other fees and charges that are set forth in the agreement governing the plan.
  2. An individual borrower may pay the outstanding unpaid indebtedness charged to the borrower’s account under a plan in full at any time. Except for a charge imposed to terminate a plan if the agreement governing the plan so provides, a credit card lender may not impose any prepayment charge in connection with the payment of outstanding unpaid indebtedness in full by an individual borrower. The terms of prepayment of the outstanding unpaid indebtedness relating to a credit card plan involving a borrower other than an individual borrower shall be as the lender and the borrower may agree.
  3. No charges assessed in accordance with this section shall be deemed void as a penalty or otherwise unenforceable under any statute or the common law.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Regulation of or Liability Arising from Credit/Debit Card Swipe Fees, Surcharges, or Interchange Fees. 31 A.L.R.7th Art. 3 (2018).

6-26.1-6. Overdraft accounts.

If credit under a credit card plan is offered and extended in connection with a demand deposit account or other transaction account maintained by the borrower pursuant to an agreement or arrangement whereby the holder of the deposit account agrees to honor checks, drafts or other debits to the account, which if paid would create or increase a negative balance in the account, by making extensions of credit to the borrower under the credit card plan, any charges customarily imposed under the terms governing the demand deposit or other transaction account in the absence of any associated credit card plan (including, without limitation, check charges, monthly maintenance charges, checkbook charges, charges for checks drawn on funds in excess of an available line of credit and other similar charges) may continue to be imposed on the account without specific reference to it or incorporation of it by reference in the agreement governing the credit card plan and the amount of the charge, to the extent the balance in the demand deposit or other transaction account is insufficient to pay such a charge, may be charged to the borrower’s account under the plan as a loan under it and may be included in outstanding unpaid indebtedness in accordance with the terms of the agreement governing the credit card plan.

History of Section. P.L. 2003, ch. 237, § 1.

6-26.1-7. Omitted installments.

A credit card lender may at any time and from time to time unilaterally extend to a borrower under a credit card plan the option of omitting monthly installments.

History of Section. P.L. 2003, ch. 237, § 1.

6-26.1-8. Insurance.

  1. A credit card lender may request but not require an individual borrower to be insured in respect of a credit card plan under a life, health, accident, health and accident or other credit or other permissible insurance policy or program, whether group or individual.
  2. In the case of a borrower borrowing under a credit card plan for other than personal, household or family purposes, a credit card lender may require the borrower to obtain insurance, from an insurer acceptable to the credit card lender, under a life, health, accident, health and accident or other credit or other permissible insurance policy or program, whether group or individual.

History of Section. P.L. 2003, ch. 237, § 1.

6-26.1-9. Delinquent installments.

  1. If the agreement governing a credit card plan so provides, a credit card lender may impose, as interest, a late or delinquency charge upon any outstanding unpaid installment payments or portions of it under the plan that are in default; provided, however, that no more than one such late or delinquency charge may be imposed with respect to any single installment payment or portion of it, regardless of the period during which it remains in default; and provided further, however, that for the purpose only of the preceding provision all payments by the borrower shall be deemed to be applied to satisfaction of installment payments in the order in which they become due. Nothing contained in this section shall limit, restrict, or otherwise affect the right of a credit card lender to change the percentage rate or rates of interest applicable to the credit plan between the credit card lender and a borrower upon the occurrence of a delinquency or default or other failure of the borrower to perform in accordance with the terms of the plan.
  2. No charges assessed by a credit card lender in accordance with this section shall be deemed void as a penalty or otherwise unenforceable under any statute or the common law.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26.1-10. Attorneys’ fees — Costs.

In the event a borrower defaults under the terms of a plan, the credit card lender may, if the borrower’s account is referred to an attorney (not a regularly salaried employee of the credit card lender) or to a third party for collection and if the agreement governing the credit card plan so provides, charge and collect from the borrower a reasonable attorneys’ fee. In addition, following a borrower’s default, the credit card lender may, if the agreement governing the plan so provides, recover from the borrower all court, alternative dispute resolution or other collection costs (including, without limitation, fees and charges of collection agencies) actually incurred by the credit card lender.

History of Section. P.L. 2003, ch. 237, § 1.

6-26.1-11. Amendment of agreement.

  1. Unless the agreement governing a credit card plan otherwise provides, a credit card lender may at any time and from time to time amend the agreement in any respect, whether or not the amendment or the subject of the amendment was originally contemplated or addressed by the parties or is integral to the relationship between the parties. Without limiting the foregoing, the amendment may change terms by the addition of new terms or by the deletion or modification of existing terms, whether relating to plan benefits or features; the rate or rates of interest; the manner of calculating interest or outstanding unpaid indebtedness; variable schedules or formulas; interest fees and charges; fees; collateral requirements; methods for obtaining or repaying extensions of credit; attorneys’ fees; plan termination; the manner for amending the terms of the agreement; arbitration or other alternative dispute resolution mechanisms; or other matters of any kind whatsoever. Unless the agreement governing a credit card plan otherwise expressly provides, any amendment may, on and after the date upon which it becomes effective as to a particular borrower, apply to all then outstanding, unpaid indebtedness in the borrower’s account under the plan, including any indebtedness that arose prior to the effective date of the amendment. An agreement governing a credit card plan may be amended pursuant to this section regardless of whether the plan is active or inactive or whether additional borrowings are available under it. Any amendment that does not increase the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 may become effective as determined by the credit card lender, subject to compliance by the credit card lender with any applicable notice requirements under the Truth in Lending Act (15 U.S.C. § 1601 et seq.), and the regulations promulgated under it, as in effect from time to time. Any notice of an amendment sent by the credit card lender may be included in the same envelope with a periodic statement or as part of the periodic statement or in other materials sent to the borrower.
    1. If an amendment increases the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 , the credit card lender shall mail or deliver to the borrower, at least fifteen (15) days before the effective date of the amendment, a clear and conspicuous written notice that shall describe the amendment and shall also set forth the effective date of it and any applicable information required to be disclosed pursuant to the following provisions of this section.
    2. Any amendment that increases the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 may become effective as to a particular borrower if the borrower does not, within fifteen (15) days of the earlier mailing or delivery of the written notice of the amendment (or any longer period that may be established by the credit card lender), furnish written notice to the credit card lender that the borrower does not agree to accept the amendment. The notice from the credit card lender shall set forth the address to which a borrower may send notice of the borrower’s election not to accept the amendment and shall include a statement that, absent the furnishing of notice to the credit card lender of nonacceptance within the referenced fifteen day (15) time period, the amendment will become effective and apply to the borrower. As a condition to the effectiveness of any notice that a borrower does not accept the amendment, the credit card lender may require the borrower to return to it all credit devices. If, after fifteen (15) days from the mailing or delivery by the credit card lender of a notice of an amendment (or any longer period that may have been established by the credit card lender as referenced above), a borrower uses a plan by making a purchase or obtaining a loan, notwithstanding that the borrower has prior to the use furnished the credit card lender notice that the borrower does not accept an amendment, the amendment may be deemed by the credit card lender to have been accepted and may become effective as to the borrower as of the date that the amendment would have become effective but for the furnishing of notice by the borrower (or as of any later date selected by the credit card lender).
    3. Any amendment that increases the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 may, in lieu of the procedure referenced in subdivision (2) of this subsection, become effective as to a particular borrower if the borrower uses the plan after a date specified in the written notice of the amendment that is at least fifteen (15) days after the mailing or delivery of the notice (but that need not be the date the amendment becomes effective) by making a purchase or obtaining a loan; provided that the notice from the credit card lender includes a statement that the described usage after the references date will constitute the borrower’s acceptance of the amendment.
    4. Any borrower who furnishes timely notice electing not to accept an amendment in accordance with the procedures referenced in subdivision (2) of this subsection and who does not subsequently use the plan, or who fails to use the borrower’s plan as referenced in subdivision (3) of this subsection, shall be permitted to pay the outstanding unpaid indebtedness in the borrower’s account under the plan in accordance with the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 without giving effect to the amendment; provided, however, that the credit card lender may convert the borrower’s account to a closed-end credit account on credit terms substantially similar to those set forth in the then-existing agreement governing the borrower’s plan.
    5. Notwithstanding the other provisions of this section, no notice required by this section of an amendment of an agreement governing a credit card plan shall be required, and any amendment may become effective as of any date agreed upon between a credit card lender and a borrower, with respect to any amendment that is agreed upon between the credit card lender and the borrower, either orally or in writing.
  2. For purposes of this section, the following are examples of amendments that shall not be deemed to increase the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 :
    1. A decrease or increase in the required number or amount of periodic installment payments;
    2. Any change to a plan that increases the rate or rates in effect immediately prior to the change by less than one-quarter of one percentage point (0.25%) per annum; provided that a credit card lender may not make more than one such change in reliance on this subdivision with respect to a plan within any twelve-month (12) period;
      1. A change in the schedule or formula used under a variable-rate plan under § 6-26.1-3 that varies the determination date of the applicable rate; the time period for which the applicable rate will apply; or the effective date of any variation of the rate or any other similar change; or
      2. Any other change in the schedule or formula used under a variable-rate plan under § 6-26.1-3; provided that the initial interest rate that would result from any change under this subdivision (3), as determined on the effective date of the change or, if the notice of the change is mailed or delivered to the borrower prior to the effective date, as of any date within sixty (60) days before mailing or delivery of the notice, will not be an increase from the rate in effect on the date under the existing schedule or formula.
    3. A change from a variable-rate plan to a fixed rate, or from a fixed-rate to a variable-rate plan so long as the initial rate that would result from such a change, as determined on the effective date of the change, or if the notice of the change is mailed or delivered to the borrower prior to the effective date, as of any date within sixty (60) days before mailing or delivery of the notice, will not be an increase from the rate in effect on the date under the existing plan;
    4. A change from a daily periodic rate to a periodic rate other than daily or from a periodic rate other than daily to a daily periodic rate; and
    5. A change in the method of determining the outstanding unpaid indebtedness upon which interest is calculated (including, without limitation, a change with respect to the date by which, or the time period within which, a new balance or any portion of it must be paid to avoid additional interest).
  3. The procedures for amendment by a credit card lender of the terms of a plan to which a borrower, other than an individual borrower, is a party may, in lieu of the foregoing provisions of this section, be as the agreement governing the plan may otherwise provide.

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-26.1-12. Materiality of terms.

All terms, conditions and other provisions of and relating to a credit card plan as contained in this chapter or any other applicable chapter, or in the agreement governing the plan (other than those which are interest under this chapter,) including, without limitation, provisions relating to the method of determining the outstanding unpaid indebtedness on which interest is applied; time periods within which interest or interest fees and charges may be avoided; reasons for default and the right to cure any default; right to accelerate; account cancellation; choice of law; change in terms requirements; right to charge and collect attorneys’ fees; court and collection costs; and the compounding of interest or interest fees and charges, shall be, and hereby are deemed to be, material to the determination of interest applicable to a plan under Rhode Island law, under the most favored lender doctrine, and under the National Credit Card Lender Act (12 U.S.C. § 85) or Section 521 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (12 U.S.C. § 1831(d)).

History of Section. P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Preemption Issues Under Depository Institutions Deregulation and Monetary Control Act. 28 A.L.R. Fed. 2d 467.

6-26.1-13. Applicable law.

An agreement governing a credit card plan shall be governed by the laws of the state of Rhode Island, and any other law of this state limiting the rate or amount of interest, discounts, points, finance charges, service charges or other charges or fees shall not apply to extensions of credit under a credit card plan operated in accordance with this chapter.

History of Section. P.L. 2003, ch. 237, § 1.

Chapter 27 Truth in Lending and Retail Selling

6-27-1. Short title.

This chapter may be known and cited as “The Rhode Island Truth in Lending and Retail Selling Act.”

History of Section. P.L. 1968, ch. 147, § 1; P.L. 1970, ch. 223, § 1.

Comparative Legislation.

Truth in lending:

Conn. Gen. Stat. § 36a-675 et seq.

Mass. Ann. Laws ch. 140D, § 1 et seq.

Collateral References.

Civil remedies of consumer for violations of credit transactions provisions of Truth In Lending Act (TILA) (15 USCS §§ 1601 et seq.), as amended by truth in lending simplification and reform act of 1982. 113 A.L.R. Fed. 173.

Construction and application of Consumer Credit Protection Act provisions (18 USCS §§ 891-894) prohibiting extortionate credit transactions. 106 A.L.R. Fed. 33.

Construction and effect of disclosure statutes requiring one extending credit or making loan to give statement showing terms as to amounts involved and charges made. 14 A.L.R.3d 330; 46 A.L.R. Fed. 657.

What constitutes Truth in Lending Act violation which “was not intentional and resulted from bona fide error not withstanding maintenance of procedures reasonably adapted to avoid any such error” within meaning of § 130(c) of Act (15 USCA § 1640(c)). 153 A.L.R. Fed. 193.

6-27-2. Declaration of purpose.

The general assembly finds that economic stabilization would be enhanced and that competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost of credit by consumers. It is the purpose of this chapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him or her and thus avoid the uninformed use of credit.

History of Section. P.L. 1968, ch. 147, § 1; P.L. 1970, ch. 223, § 1.

6-27-3. Definitions.

As used in this chapter:

  1. “Credit” means any loan, mortgage, deed of trust, advance, or discount; any conditional sales contract; any contract to sell, or sale or contract of sale of property or services either for present or future delivery, under which part or all of the price is payable subsequent to the making of the sale or contract and the creditor imposes a finance charge; any contract or arrangement for the hire, bailment, or leasing of property in connection with which the creditor imposes a finance charge; any option, demand, lien, pledge, or other claim against or for the delivery of property or money; any purchase, or other acquisition of, or any credit upon the security of, any obligation or claim arising out of any of the foregoing; and any transaction or series of transactions having a similar purpose or effect.
  2. “Creditor” means any person engaged in the business of extending credit, including any person who as a regular business practice makes loans or sells or rents property or services on a time, credit, or installment basis, either as principal or as agent, who requires, as an incident to the extension of credit, the payment of a finance charge.
  3. “Director” means the director of business regulation.
  4. “Official fees” means the fees prescribed by law for filing, recording, or otherwise perfecting or releasing or satisfying any title, lien, or security interest retained or taken by a creditor in connection with the extension of credit.
  5. “Person” means any individual, corporation, partnership, association, or other organized group of persons, or the legal successor or representative of the foregoing.
  6. “Revolving or open-end credit plan” means a credit plan prescribing the terms of credit transactions exclusive of cash advances under the plans.

History of Section. P.L. 1968, ch. 147, § 1; P.L. 1970, ch. 223, § 1; P.L. 1989, ch. 481, § 2.

Collateral References.

What constitutes “finance charge” under § 106(a) of the Truth in Lending Act (15 USCA § 1605(a)) or applicable regulations. 154 A.L.R. Fed. 431.

What constitutes Truth in Lending Act violation which “was not intentional and resulted from bona fide error not withstanding maintenance of procedures reasonably adapted to avoid any such error” within meaning of § 130(c) of Act (15 USCA § 1640(c)). 153 A.L.R. Fed. 193.

Who is “creditor” within meaning of § 103(f) of Truth in Lending Act (15 U.S.C.A. § 1602(f)). 157 A.L.R. Fed. 419.

6-27-4. Maximum charge — Refunds.

  1. No creditor shall impose a finance charge in excess of an amount equal to eighteen percent (18%) simple interest per annum. This subsection shall not apply to any transaction in connection with which the finance charge does not exceed ten dollars ($10.00). Notwithstanding the provision of any retail installment contract to the contrary, a buyer may prepay in full the unpaid balance of any retail installment contract at any time before its final due date and, if the buyer does so, shall receive a refund credit on the retail installment contract for the prepayment. The amount of the refund credit of finance charges on precomputed loans, made for an original term of sixty (60) months or less, may be calculated on the method commonly referred to as the rule of 78s or sum of the digits. Refund credits of finance charges on precomputed loans, made for an original term greater than sixty (60) months, must be at least the amount as that produced by the rule of anticipation.
  2. Where the amount of refund credit is less than one dollar ($1.00), no refund credit need be made.
  3. Notwithstanding any contrary provision of law, the maximum finance charge that may be applied under a revolving or open-end credit plan in connection with a transaction arising out of a retail sale of consumer goods, including the retail sale of gasoline or services, shall not exceed the rate or rates agreed to by the creditor and a retail buyer compared on the average daily balance of the open-end or revolving account or the unpaid balance of the open-end or revolving account outstanding as of the end of the current billing cycle. Regardless of any agreement to the contrary, a transaction under a revolving or open-end credit plan is subject to this section whenever a solicitation for the extension of credit is made by a creditor whose primary activity in Rhode Island is soliciting Rhode Island customers through the mails and the solicitation originates outside Rhode Island but is directed to, and received by, a retail buyer who resides and responds to the solicitation in Rhode Island.
  4. This section shall not apply to any person doing business under and as permitted by any general or special law of this state or of the United States relating to: (1) financial institutions, (2) credit unions, or (3) licensees pursuant to title 19, chapter 44 of title 6, and § 6-26-2 .
  5. Under each revolving or open-end credit plan a late fee not to exceed twelve dollars ($12.00) may be assessed on each minimum payment not paid in full within forty (40) days following the billing date of the statement on which the minimum payment first appears.

History of Section. P.L. 1968, ch. 147, § 1; P.L. 1968, ch. 184, § 1; P.L. 1970, ch. 223, § 1; P.L. 1981, ch. 303, § 1; P.L. 1982, ch. 436, § 1; P.L. 1986, ch. 359, § 2; P.L. 1989, ch. 481, § 2; P.L. 1994, ch. 228, § 1; P.L. 1995, ch. 82, § 59; P.L. 1995, ch. 194, § 1; P.L. 1997, ch. 98, § 11; P.L. 2014, ch. 528, § 17.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Validity and construction of revolving charge account contract or plan. 41 A.L.R.3d 682.

What constitutes “finance charge” under § 106(a) of the Truth in Lending Act (15 USCA § 1605(a)) or applicable regulations. 154 A.L.R. Fed. 431.

6-27-5. Consumer notes.

  1. If any contract between a retail seller and a retail buyer for the sale of consumer goods and services requires or involves the execution of a promissory note by a retail buyer in connection with an extension of credit by the retail seller, or by a creditor to whom the retail buyer was referred by the retail seller and to whom the retail seller regularly, as part of the ordinary conduct of its business and with the actual knowledge of the creditor, refers retail buyers for credit, the words “nonnegotiable consumer note” shall be placed prominently on the note and an assignee of a note with the words “nonnegotiable consumer note” appearing prominently on the note shall take the note subject to the claims and defenses permitted under § 6A-3-306 , irrespective of whether or not the assignee qualifies as a “holder in due course” as defined in § 6A-3-302 . For the purposes of this section “consumer goods” means tangible personal property used or bought for use primarily for personal, family, or household purposes.
  2. A creditor who obtains a note from the maker in violation of this section shall be punished by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).
  3. If a note is obtained by a creditor from a maker in violation of this section, no finance, delinquency, collection, repossession, or refinancing charges may be recovered in any action or proceeding based on the contract for sale by the creditor and if the charges are recovered from a maker by a holder in due course, the maker may recover the charges from the creditor who violated the provisions of this section.
  4. The provisions of this section shall not apply to any notes executed in connection with any financing that is insured under federal housing administration regulations.

History of Section. P.L. 1968, ch. 147, § 1; P.L. 1969, ch. 170, § 1; as redesignated by P.L. 1970, ch. 223, § 1; P.L. 2014, ch. 528, § 17.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Construction and effect of disclosure statutes requiring one extending credit or making loan to give statement showing terms as to amounts involved and charges made. 14 A.L.R.3d 330.

6-27-6. Regulations.

  1. The director shall prescribe any rules and regulations not inconsistent with this chapter that may be necessary or proper in carrying out its provisions.
  2. It is the expressed intention of this legislature that if exemption from the law or regulation of the federal government of the disclosure class of credit transactions covered hereby cannot be affected, the laws of the federal government shall preempt the provisions of this chapter.

History of Section. P.L. 1968, ch. 147, § 1; as redesignated by P.L. 1970, ch. 223, § 1.

6-27-7. Civil and criminal penalties.

  1. Any creditor who in connection with any credit transaction willfully imposes a finance charge in violation of § 6-27-4 or any regulation issued under § 6-27-4 , shall be liable to the person in the amount of one hundred dollars ($100), or in an amount equal to twice the finance charge required by the creditor in connection with the transaction, whichever is the greater, except that the liabilities shall not exceed two thousand dollars ($2,000) on any credit transaction. An action to recover the penalty may be brought by the person within one year from the date of the occurrence of the violation, in any court of competent jurisdiction. In any action under this subsection in which any person is entitled to a recovery, the creditor shall be liable for reasonable attorney’s fees and court costs as determined by the court.
  2. Any person who willfully violates any provision of § 6-27-4 or any regulation issued under § 6-27-4 shall be fined not more than five hundred dollars ($500) or imprisoned not more than one year, or both.
  3. Except as specified in subsection (a) of this section, nothing contained in this chapter or any regulation issued under this chapter shall affect the validity or enforceability of any contract or transaction.
  4. No punishment or penalty provided by this chapter shall apply to the United States or any agency of the United States, or to any state, any political subdivision of a state, or any agency of any state or political subdivision.

History of Section. P.L. 1968, ch. 147, § 1; as redesignated by P.L. 1970, ch. 223, § 1.

Collateral References.

What constitutes “finance charge” under § 106(a) of the Truth in Lending Act (15 USCA § 1605(a)) or applicable regulations. 154 A.L.R. Fed. 431.

What constitutes Truth in Lending Act violation which “was not intentional and resulted from bona fide error not withstanding maintenance of procedures reasonably adapted to avoid any such error” within meaning of § 130(c) of Act (15 USCA § 1640(c)). 153 A.L.R. Fed. 193.

6-27-8. Severability.

If any provision of this chapter or the application of any provision of this chapter to any person or circumstance is held unconstitutional, the remainder of this chapter and the application of the provision to other persons or circumstances shall not be affected thereby, and it shall be conclusively presumed that the legislature would have enacted the remainder of this chapter without the invalid or unconstitutional provision.

History of Section. P.L. 1968, ch. 147, § 1; as redesignated by P.L. 1970, ch. 223, § 1.

6-27-9. Retail sales — Refunds.

  1. Except where a customer has been clearly informed by either a poster or other appropriate notice placed at the point of display or at the cash register or at the store entrance that all sales are final and that the merchandise is not returnable, wherever a customer who has paid cash for an item, and who has in his or her possession a sales slip or other evidence that he or she has purchased the item in a retail outlet, returns the item, unused, within ten (10) business days from the date of purchase, he or she shall be entitled to a refund in the same manner as paid in an amount equivalent to that paid at the time of sale.
  2. This section shall not apply to the sale of books, magazines, or any publications; food; perishable items; merchandise that is substantially custom-made or custom-finished; items for internal consumption; items sold “as is”; or any items presently prohibited for refund, return, or exchange by a retailer by federal or state law or any rule or regulation promulgated by any state agency.
  3. Any person, corporation, or entity, refusing or neglecting to post in accordance with subsection (a), shall be deemed guilty of a misdemeanor for each violation and shall be punished by a fine of not less than five hundred dollars ($500) or more than one thousand dollars ($1,000).

History of Section. P.L. 1975, ch. 180, § 1; P.L. 1980, ch. 281, § 1; P.L. 1994, ch. 174, § 1; P.L. 1994, ch. 299, § 1; P.L. 1995, ch. 177, § 1; P.L. 2004, ch. 299, § 1; P.L. 2014, ch. 528, § 17.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-27-10. Disclosure.

  1. Any application form or written solicitation for a revolving or open-end credit plan provided or offered by a creditor to a resident of this state shall contain or be accompanied by either of the following disclosures:
    1. A disclosure of each of the following, if applicable:
      1. Any periodic interest or finance charge rate that may be applied to the credit card account, expressed as an annual percentage rate, or in the case of a credit card account with a variable rate, the means for determining that rate;
      2. If two (2) or more periodic rates may be used to compute the finance charge, each rate, the range of balances to which each rate is applicable, and the corresponding annual percentage rate with respect to each periodic rate;
      3. Any membership, participation, or other similar fee imposed for the issuance of a credit card or, if the creditor does not impose a fee, the disclosure shall so indicate;
      4. The period within which any credit extended or principal amount withdrawn from a credit card account shall be repaid to avoid incurring a finance charge, and if no period is offered that fact shall be stated, except that a creditor may, at its option and without disclosure, impose no finance charge when payment is received after the time period’s expiration; and
      5. Any per-transaction fee or similar fee; or
    2. A disclosure that satisfies the initial disclosure statement requirements of “Regulation Z”.
  2. Any information required to be disclosed pursuant to this section shall be disclosed in a clear and conspicuous manner.
  3. The provisions of this section shall not apply to oral solicitations or solicitations made through or applications contained in a catalogue, magazine, newspaper, or other print media that is mailed or otherwise distributed to people in more than one state.
  4. A creditor need not present the disclosures required by subsection (a) of this section in chart form or use any specific terminology except as expressly provided in this section. The following chart shall not be construed in any way as a standard by which to determine whether a creditor that elects not to use the chart has provided the required disclosures in a manner that satisfies subsection (a) of this section. However, disclosures shall be conclusively presumed to satisfy the requirements of subsection (a) of this section if a chart with captions substantially as follows is completed with the applicable terms offered by the creditor or if the creditor presents the applicable terms in tabular, list, or narrative format using terminology substantially similar to the captions included in the following chart:
  5. For the purposes of this section, “Regulation Z” means the regulation promulgated and as amended by the Federal Reserve Board pursuant to the Federal Truth in Lending Provisions of the “Consumer Credit Protection Act,” 15 U.S.C. § 1601 et seq.
  6. Nothing in this section shall be deemed or construed to prohibit a creditor from disclosing additional terms, conditions, or information, whether or not relating to the disclosures required under this section, in conjunction with the disclosures required by this section.
  7. This section does not apply to any application form or written solicitation for a revolving or open-end credit plan where the credit to be extended will be secured by a lien on real property.
  8. Any person who knowingly and willfully violates any provision of this section shall be subject to a civil penalty of not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000) per violation. Any application or solicitation violating this section shall be treated as a single violation regardless of the number of applications or solicitations distributed.

ANNUALPER-CENTAGERATE VARIABLERATE INDEXANDSPREAD ANNUALIZEDMEMBERSHIPORPARTICI-PATIONFEE MINIMUMCHARGETRANSACTIONFEE FREE-RIDEPERIOD

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History of Section. P.L. 1987, ch. 515, § 1; P.L. 2014, ch. 528, § 17.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

What constitutes Truth in Lending Act violation which “was not intentional and resulted from bona fide error not withstanding maintenance of procedures reasonably adapted to avoid any such error” within meaning of § 130(c) of Act (15 USCA § 1640(c)). 153 A.L.R. Fed. 193.

6-27-11. Additional disclosures.

In the case of any open-end consumer credit plan secured by a consumer’s principal residence, the following provisions shall apply:

  1. The disclosures required by subdivisions (2) and (3) of this section shall be provided to the consumer on a separate document on or before the closing date.
  2. The following information shall be disclosed:
    1. The annual percentage rate that will be in effect when credit is first extended in connection with the loan or a description of the manner in which the rate will be computed;
    2. The manner in which any changes in the annual percentage rate of interest will be made, and the timing of any changes, including any index or other rate of interest to which the changes in rates are related;
    3. Any fee imposed for the availability of the account, including but not limited to, annual fees, application fees, and the fees commonly designated as “points”;
    4. In the case of a variable rate, the maximum annual percentage rate that may be imposed at any time under the plan and the maximum amount by which the annual percentage rate may change in any one-year period. If no limit exists, that fact shall be disclosed;
    5. The maximum interest payment for a thirty-day (30)period at the highest interest rate permitted under the terms of the open-end plan and based on the maximum amount of credit available under the plan;
    6. A statement that the plan is secured by the consumer’s dwelling and, in the event of any default, the consumer risks the loss of the home;
    7. If applicable, a statement that the disclosures are good-faith estimates of the terms and conditions applicable to the plan, and are subject to change before the plan is opened;
    8. If applicable, a statement that the creditor has the right to change the terms and conditions during the plan, including the index and margin used to determine the interest rate and payment amount, at any time; and
    9. If applicable, a statement that although interest-only payments may be less on a monthly basis, they retire no principal, prolong the obligation, and result in greater total expenses over the life of the loan.
    1. In addition to the requirements of this chapter, any advertisement to aid, promote, or assist, directly or indirectly, the extension of consumer credit through an open-end credit plan secured by the consumer’s principal dwelling that states a specific monthly payment based on a variable rate of interest shall state all of the following terms:
      1. Any maximum or fixed amount that could be imposed; and
      2. The periodic rates expressed as annual percentage rates.
    2. If any advertisement described in subdivision (3)(i) contains a statement that any interest expense incurred with respect to a plan is or may be tax deductible, the advertisement shall include a clear and conspicuous statement that the interest expense may not be completely deductible for all taxpayers.
    3. No advertisement described in subdivision (3)(i) with respect to any home equity loan may refer to the loan as “free money or easy money.”

History of Section. P.L. 1988, ch. 246, § 1; P.L. 2014, ch. 528, § 17.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

What constitutes Truth in Lending Act violation which “was not intentional and resulted from bona fide error not withstanding maintenance of procedures reasonably adapted to avoid any such error” within meaning of § 130(c) of Act (15 USCA § 1640(c)). 153 A.L.R. Fed. 193.

Chapter 28 Door-To-Door Sales

6-28-1. Short title.

This chapter may be known and cited as the “Door-to-Door Sales Act.”

History of Section. P.L. 1995, ch. 52, § 1.

Repealed Sections.

Former chapter 28 of this title (P.L. 1968, ch. 296, § 1; P.L. 1971, ch. 243, ch. 249, § 1; P.L. 1972, ch. 62, § 1; P.L. 1973, ch. 229, § 1; P.L. 1979, ch. 161, § 1), consisting of §§ 6-28-1 6-28-8 and concerning home solicitation sales, was repealed by P.L. 1995, ch. 52, § 1, effective July 1, 1995; P.L. 1995, ch. 52, § 1, also enacted a new chapter 28 of this title.

Comparative Legislation.

Home solicitation sales:

Conn. Gen. Stat. § 42-134a et seq.

Mass. Ann. Laws ch. 93, § 48.

6-28-2. Definitions.

As used in this chapter:

  1. “Business Day” means any calendar day except Sunday or any legal holiday on which regular mail deliveries are not made.
  2. “Consumer Goods or Services” means goods or services purchased, leased, or rented primarily for personal, family, or household purposes, including courses of instruction or training regardless of the purpose for which they are taken.
  3. “Door-to-Door Sale” means a sale, lease, or rental of consumer goods or services with a purchase price of twenty-five dollars ($25.00) or more, whether under single or multiple contracts, in which the seller or his or her 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 home other than that of the person soliciting the transaction or at a place other than the regular place of business of the seller. The term “door-to-door sale” does not include a transaction:
    1. Made pursuant to the prior negotiations made by the buyer at the seller’s permanent business establishment where the goods are regularly sold;
    2. 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 (3) business days;
    3. Made entirely by mail or telephone and without any other contact between the buyer and seller or its representative prior to delivery of the goods or performance of the services;
    4. In which the buyer has initiated the contact and specifically requested the seller to visit his or her 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 the exclusion;
    5. 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 duly registered in the State of Rhode Island;
    6. That involves arts and crafts sold at fairs or other locations such as shopping malls, civic centers, and schools; or
    7. 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 regulations issued pursuant to that act.
  4. “Place of Business” means the main or permanent branch office or local address of a seller.
  5. “Purchase Price” means the total price paid or to be paid for the consumer goods or services, including all interest and service charges.
  6. “Seller” means any person, partnership, corporation, or association engaged in the door-to-door sale of consumer goods or services.

History of Section. P.L. 1995, ch. 52, § 1; P.L. 2014, ch. 528, § 19.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Transactions Covered.

Where a contractor’s representative went to a residence to solicit the sale of home improvement services, and a contract for the services was signed in that home, the Door-to-Door Sales Act was applicable. Domestic Bank v. Johnson (In re Johnson), 239 B.R. 255, 1999 Bankr. LEXIS 1238 (Bankr. D.R.I. 1999).

6-28-3. Right to cancel — Method.

In addition to any right otherwise to revoke an offer, the buyer may cancel a door-to-door sale or lease of merchandise by posting written notice of cancellation to the seller at the address specified for notice of cancellation provided by the seller not later than midnight three (3) days following the buyer’s signing the agreement, excluding Sunday and any holiday on which regular mail deliveries are not made. The notice of cancellation shall be sent by registered or certified mail. Notice of cancellation given by the buyer shall be effective if it indicates the intention on the part of the buyer not to be bound by the door-to-door sale or lease of merchandise.

History of Section. P.L. 1995, ch. 52, § 1.

NOTES TO DECISIONS

Construction.

The reference to cancellation in § 6-28-4(d) is separate and in addition to the buyer’s right to cancel an agreement within three business days, since the latter provision applies when the agreement conforms to the provisions of the statute and where the buyer unilaterally decides to back out of the contract, whereas cancellation under § 6-28-4(d) is not time restricted. Domestic Bank v. Johnson (In re Johnson), 239 B.R. 255, 1999 Bankr. LEXIS 1238 (Bankr. D.R.I. 1999).

6-28-4. Notices required on agreement and at time of sale — Cancellation — Return of deposit — Damages.

  1. No agreement of the buyer in a door-to-door sale shall be effective unless it is signed and dated by the buyer and unless it contains the following in ten-point (10), bold-face type or larger directly above the space reserved in the agreement for the signature of the buyer:

    Notice to buyer: (1) Do not sign this agreement if any of the spaces intended for the agreed terms to the extent of then available information are left blank. (2) You are entitled to a copy of this agreement at the time you sign it. (3) You may at any time pay off the full, unpaid balance due under this agreement and in so doing you may be entitled to receive a partial rebate of the finance and insurance charges. (4) The seller has no right to unlawfully enter your premises or commit any breach of the peace to repossess goods purchased under this agreement. (5) You may cancel this agreement if it has not been signed at the main office or a branch office of the seller, provided you notify the seller at his or her main office or branch office shown in the agreement by registered or certified mail, that shall be posted not later than midnight of the third calendar day after the day on which the buyer signs the agreement, excluding Sunday and any holiday on which regular mail deliveries are not made. See the attached notice of cancellation form for an explanation of buyer’s rights.

  2. The seller may select the method of providing the buyer with the duplicate notice of cancellation, form set forth in subsection (a) of this section, provided, however, that in the event of cancellation the buyer must be able to retain a complete copy of the agreement. Furthermore, if both forms are not attached to the agreement, the seller is required to alter the last sentence in the statement in subsection (a) to conform to the actual location of the forms.
  3. Additionally, the seller shall, at the time of the sale, give notice to the buyer of all the buyer’s rights that substantially comply with this chapter. The notice must:
    1. Appear in the agreement under the conspicuous caption: “Notice of Cancellation”; and
    2. Read as follows:

      . . . (date of transaction) “You may cancel this transaction, without any penalty or obligation, within three (3) business days from the above date. If you cancel, your cancellation notice must state that you do not wish to be bound by the agreement and mailed by registered or certified mail not later than midnight three (3) days following the buyer’s signing the agreement, excluding Sunday and any holiday on which regular mail deliveries are not made. All cancellations must be mailed to:

      (insert name and address of the seller).”

  4. Whenever the agreement fails to conform to the provisions of this section and the buyer or his or her agent has notified the seller of his or her intent to cancel the agreement by registered mail, return receipt requested, the seller shall, within twenty (20) days, return any deposit made by the buyer. Failure to return any deposit shall enable the buyer to recover from the seller double damages in any subsequent legal proceeding.

History of Section. P.L. 1995, ch. 52, § 1; P.L. 2014, ch. 528, § 19.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Disclosures Mandated.

A contract violated the statute where it failed to include certain disclosures mandated by this section. Domestic Bank v. Johnson (In re Johnson), 239 B.R. 255, 1999 Bankr. LEXIS 1238 (Bankr. D.R.I. 1999).

Effect of Non-Compliance of Seller.

Where a contractor failed to return payments to homeowners who had notified him in a timely fashion of their intention to cancel a contract, and where the contractor failed to demand the return of goods delivered under the contract, the homeowners were entitled to double damages and, by operation of law, were entitled to keep the goods free and clear of any claims by the contractor. Domestic Bank v. Johnson (In re Johnson), 239 B.R. 255, 1999 Bankr. LEXIS 1238 (Bankr. D.R.I. 1999).

Right to Cancel.

The reference to cancellation in subsection (d) of this section is separate and in addition to the buyer’s right to cancel an agreement within three business days, since the latter provision applies when the agreement conforms to the provisions of the statute and where the buyer unilaterally decides to back out of the contract, whereas cancellation under subsection (d) of this section is not time restricted. Domestic Bank v. Johnson (In re Johnson), 239 B.R. 255, 1999 Bankr. LEXIS 1238 (Bankr. D.R.I. 1999).

6-28-5. Seller’s obligations on cancellation.

  1. Within twenty (20) days after a door-to-door sale has been cancelled, the seller shall tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness. Any security interest arising out of the transaction will be canceled.
  2. If the downpayment includes goods traded in, the goods shall be tendered in substantially as good condition as when received. If the seller fails to tender the goods as provided by this section, the buyer may elect to recover an amount equal to the trade-in allowance stated in the agreement.
  3. The seller may retain as a cancellation fee five percent (5%) of the cash price; five dollars ($5.00); or the amount of the cash down payment, whichever is least. If the seller fails to comply with an obligation imposed by this section, or if the buyer avoids the sale on any ground independent of his right to cancel under § 6-28-3 , the seller is not entitled to retain a cancellation fee.
  4. Until the seller has complied with the obligations imposed by this section, the buyer may retain possession of goods delivered to him or her by the seller and has a lien on the goods for any recovery to which the buyer is entitled.

History of Section. P.L. 1995, ch. 52, § 1; P.L. 2014, ch. 528, § 19.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-28-6. Statement required on note.

Any note or other evidence of indebtedness given by a buyer in connection with a door-to-door sale shall be dated not earlier than the date of the agreement or offer to purchase. The seller shall cause the words “Nonnegotiable consumer note” to be placed prominently on the note and an assignee or holder of a note or other evidence of indebtedness with the words “Nonnegotiable consumer note” appearing prominently on the note shall take the note subject to the claims and defenses permitted under § 6A-3-306 , irrespective of whether or not an assignee or holder qualifies as a “holder in due course” as defined in § 6A-3-302 .

History of Section. P.L. 1995, ch. 52, § 1; P.L. 2014, ch. 528, § 19.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Non-negotiable consumer notes under Truth in Lending and Retail Selling Act, § 6-27-5 .

6-28-7. Buyer’s obligations on cancellation.

  1. Except as provided in § 6-28-5(d) , within twenty (20) days after a door-to-door sale has been cancelled by the buyer, upon demand the buyer shall tender to the seller any goods delivered by the seller pursuant to the sale, but the buyer is not obligated to tender at any place other than his or her own address. Buyer’s compliance with the seller’s instructions regarding the return shipment of the goods shall be at the seller’s expense and risk. If the seller fails without interference from the buyer to take possession of the goods within twenty (20) days after cancellation, the goods shall become the property of the buyer without obligation to pay for them.
  2. The buyer shall take reasonable care of the goods in his or her possession both prior to cancellation and during the twenty-day (20) period following. During the twenty-day (20) period after cancellation, except for the buyer’s duty of care, the goods are at the seller’s risk.
  3. If the seller has performed any services pursuant to a door-to-door sale prior to its cancellation, the seller is entitled to no compensation except the cancellation fee provided in this chapter. If the seller’s services result in the alteration of property of the buyer, the seller shall restore the property to substantially as good condition as it was at the time the services were rendered.

History of Section. P.L. 1995, ch. 52, § 1; P.L. 2014, ch. 528, § 19.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Effect of Non-Compliance of Seller.

Where a contractor failed to return payments to homeowners who had notified him in a timely fashion of their intention to cancel a contract, and where the contractor failed to demand the return of goods delivered under the contract, the homeowners were entitled to double damages and, by operation of law, were entitled to keep the goods free and clear of any claims by the contractor. Domestic Bank v. Johnson (In re Johnson), 239 B.R. 255, 1999 Bankr. LEXIS 1238 (Bankr. D.R.I. 1999).

6-28-8. Penalty for violation.

Any person who violates any provision of this chapter shall be guilty of a misdemeanor.

History of Section. P.L. 1995, ch. 52, § 1.

Chapter 28.1 Unfair Home Improvement Loans to Senior Citizens

6-28.1-1. Short title.

This chapter may be cited as the “Unfair Home Improvement Loans for Senior Citizens Act.”

History of Section. P.L. 1997, ch. 121, § 1.

6-28.1-2. Definitions.

  1. “Consumer” means an individual who seeks or acquires, by purchase or lease, any goods or services for personal, family, or household purposes.
  2. “Disabled person” means any person who has a physical or mental impairment that substantially limits one or more major life activities.
  3. “Goods” means tangible chattels bought or leased for use primarily for personal, family, or household purposes, including certificates or coupons exchangeable for these goods, and including goods that, at the time of the sale or subsequently, are to be so affixed to real property as to become a part of real property whether or not severable from real property.
  4. “Home solicitation” means any transaction made at the consumer’s primary residence, except those transactions initiated by the consumer. A consumer response to an advertisement is not a home solicitation.
  5. “Person” means an individual, partnerships, corporation, limited-liability company, association, or other group, however organized.
  6. “Senior citizen” means a person who is sixty-five (65) years of age or older.
  7. “Services” means work, labor, and services for other than a commercial or business and including services furnished in connection with the sale or repair of goods.
  8. “Transaction” means an agreement between a consumer and any other person, whether or not the agreement is a contract enforceable by action, and includes the making of, and the performance pursuant to, that agreement.

History of Section. P.L. 1997, ch. 121, § 1; P.L. 2014, ch. 528, § 20.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-28.1-3. Home solicitation.

  1. The following unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer are unlawful:

    The home solicitation of a consumer who is a senior citizen where a loan is made encumbering the primary residence of that consumer for the purposes of paying for home improvements and where the transaction is part of a pattern or practice in violation of either subsection (h) or (i) of 15 U.S.C. § 1639 or subsection (e) of 12 CFR 226.32.

  2. A third party shall not be liable under this section unless: (1) There was an agency relationship between the party who engaged in home solicitation and the third party; or (2) The third party had actual knowledge of or participated in the unfair or deceptive transaction. A third party who is a holder in due course under a home solicitation transaction shall not be liable under this section.

History of Section. P.L. 1997, ch. 121, § 1; P.L. 2014, ch. 528, § 20.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-28.1-4. Penalty for violation.

Anyone who violates any provision of this chapter shall be guilty of a misdemeanor. Any person, firm, or corporation, who or that has been found guilty, as previously stated, or any person, firm, or corporation acquiring derivative rights from someone found guilty shall be prohibited from maintaining any civil action for the recovery of any debt created as a result of the violation and shall issue a discharge of any encumbrance recorded on the real property securing the debt.

History of Section. P.L. 1997, ch. 121, § 1; P.L. 2014, ch. 528, § 20.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 29 Referral Selling

6-29-1. Home solicitation referral selling.

No seller in a home solicitation sale or a cash sale as defined in § 6-28-2 shall offer to pay a commission or give a rebate or discount to the buyer in consideration of the buyer’s giving to the seller the names of prospective purchasers or otherwise aiding the seller in making a sale to another person unless the seller actually delivers to the purchaser a chart showing the actual experience of purchasers for the three (3) calendar years ending prior to the contract under consideration, including the number of and monies paid to those who participated in the plan, and unless there shall be a separate, written agreement signed and dated by the buyer and also signed by the seller containing the following in ten-point (10) bold-face type or larger, directly above the space reserved in the agreement for the signature of the buyer:

  1. No purchase of goods or services between the parties to the sale has been induced by the promise of monies to be earned under this agreement;
  2. The purchase price of any goods or services in any transaction between the parties to the sale has not been increased in any way because of this agreement;
  3. No payments due under this agreement may be held up, credited, or set-off toward payment of any obligation between the parties except on written authorization specifically allowing that action; and
  4. No other representations or agreements, oral or written, have been made by the parties to the sale relating to the terms of this agreement.

History of Section. P.L. 1968, ch. 149, § 1; P.L. 2014, ch. 528, § 21.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Enforceability of transaction entered into pursuant to referral sales arrangement. 14 A.L.R.3d 1420.

6-29-2. Sales induced by referral offer voidable.

Any sale made in respect to which a commission, rebate, or discount is represented as being given in return for names of other prospective buyers shall be voidable at the option of the buyer, unless there is a written agreement between the parties to the sale containing the provisions set forth in § 6-29-1 .

History of Section. P.L. 1968, ch. 149, § 1.

6-29-3. Penalties.

Any seller who shall violate the provisions of § 6-29-1 and any seller who shall make a false representation that he or she is making a price concession in return for being given names of other prospective buyers shall be guilty of a misdemeanor.

History of Section. P.L. 1968, ch. 149, § 1.

Chapter 30 Distribution of Credit Cards

6-30-1. Solicitation by mail.

No person engaged in the business of granting or extending credit by the use of a credit card shall mail any credit card to any individual unless the individual shall have previously made a request, in writing or verbally, for any credit card.

History of Section. P.L. 1970, ch. 177, § 1; P.L. 1985, ch. 337, § 1.

Comparative Legislation.

Distribution of credit cards:

Conn. Gen. Stat. § 53-311a.

6-30-2. “Credit card” defined.

As used in this chapter, “credit card” means any instrument or device, whether known as a credit card, credit plate, or by any other name, issued with or without fee by an issuer for the use of the cardholder in obtaining money, goods, services, or anything else of value on credit.

History of Section. P.L. 1970, ch. 177, § 1.

6-30-3. Exceptions.

The provisions of this chapter shall not apply to:

  1. The issuance of any credit card to any individual who shall at the time of the issuance have a credit account relationship with the issuer.
  2. The issuance of any credit card to any individual whose credit account shall have been transferred to the issuer by any other person engaged in the business of granting or extending credit by the use of a credit card.
  3. The renewal of any credit card previously issued that has been used by the cardholder during the previous new or renewal term.

History of Section. P.L. 1970, ch. 177, § 1; P.L. 2014, ch. 528, § 22.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-30-4. Penalty for violation.

Anyone who violates any provision of this chapter shall be guilty of a misdemeanor. Any person, firm, or corporation who or that has been found guilty of violating any provision of this chapter or any person, firm, or corporation acquiring derivative rights from someone found guilty shall be prohibited from maintaining any civil action for the recovery of any debt created through the use of the credit card.

History of Section. P.L. 1970, ch. 177, § 1; P.L. 2014, ch. 528, § 22.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-30-5. Verbal applications for credit cards.

Persons engaged in the business of granting or extending credit by use of credit card may take a request, verbally or in writing, for any credit card.

History of Section. P.L. 1985, ch. 337, § 2.

6-30-6. Credit card transactions — Printing of accounting numbers on receipts.

  1. As used in this section, the following terms shall have the following meanings:
    1. “Cardholder” means the person named on the face of a credit card to whom or for whose benefit the credit card is issued by an issuer and shall include any employee or other agent or authorized user of the card;
    2. “Credit card” shall be defined as stated in § 6-30-2 ;
    3. “Issuer” means the financial institution or other business organization that issues a credit card or its duly authorized agent;
    4. “Person” means an individual or corporation, partnership, trust, association, joint-venture pool, syndicate, sole proprietorship, unincorporated organization, or any other legal entity; and
    5. “Provider” means a person who furnishes money, goods, services, or anything else of value upon presentation, whether physically, in writing, verbally, electronically, or otherwise of a credit card by the cardholder, or any agent or employee of such person.
  2. Except as otherwise provided in this section, no provider shall print or otherwise produce or reproduce or permit the printing or other production or reproduction of either of the following:
    1. Any part of the credit card account number, other than the last five (5) digits or other characters on any receipt provided or made available to the cardholder; or
    2. The credit card expiration date on any receipt provided or made available to the cardholder.
  3. This section shall not apply to a credit card transaction in which the sole means available to the provider of recording the credit card account number is by handwriting or by imprint of the card.
  4. This section shall not apply to receipts issued for transactions on the electronic benefits transfer card system.
  5. Any cardholder whose credit card has been the subject of a violation of this section, or the issuer of such a card, may bring a civil action in the superior court against the provider who violated the provisions of this section to recover or obtain one or all of the following remedies:
    1. Damages or expenses, or both, that the cardholder or issuer incurred due to the provider’s violation of this section;
    2. Court costs, including reasonable attorneys’ fees;
    3. Injunctive or equitable relief, as appropriate; and
    4. Any other relief the court deems proper.
  6. The provisions of this section shall become effective on January 1, 2007, with respect to any cash register or other machine or device that electronically prints receipts for credit card transactions that is in use prior to January 1, 2005.
  7. The provisions of this section shall become effective on January 1, 2005, with respect to any cash register or other machine or device that electronically prints receipts for credit card transactions that is first put into use on or after January 1, 2005.

History of Section. P.L. 2004, ch. 211, § 1; P.L. 2004, ch. 238, § 1; P.L. 2014, ch. 528, § 22.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 31 Unit Pricing

6-31-1. Definitions.

As used in this chapter:

  1. “Consumer commodity” means any food, drug, device, or cosmetic and other article, product, or commodity of any other kind or class, except for drugs sold only by prescription, that:
    1. Are customarily produced for sale to retail sales agencies or instrumentalities for consumption by individuals; for use by individuals for purposes of personal care; or in the performance of services ordinarily rendered in or around the household; and
    2. Usually are consumed or expended in the course of the consumption or use.
  2. “Director” means the director of business regulation.
  3. “Retail price” means the price at which the consumer commodity is sold to the ultimate customer.
  4. “Sale at Retail” means sale of a consumer commodity to the ultimate customer.
  5. “Total price” of a consumer commodity means the full purchase price of a consumer commodity without regard to units of weight, measure, or count.
  6. “Ultimate customer” is a person who purchases a product other than for resale.
  7. “Unit price” of a consumer commodity means the retail price of a consumer commodity expressed in terms of the retail price of the commodity per the unit of weight, measure, or count, as the director designates, computed to the nearest whole cent or fraction thereof as the director designates.

History of Section. P.L. 1972, ch. 15, § 1; P.L. 1975, ch. 191, § 1; P.L. 1987, ch. 433, § 1; P.L. 2014, ch. 528, § 23.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Comparative Legislation.

Unit pricing of packaged commodities:

Mass. Ann. Laws ch. 6, § 115A.

6-31-2. Consumer information required.

    1. Every person who sells, offers for sale, or exposes for sale at retail any aluminum foil, bread, carbonated soft drinks, cereals, cooking oils, dog or cat food, facial tissues, fish, fowl, fruits, grains, meats, napkins, plastic food wrapping, vegetables, waxed paper, or other consumer commodity designated by the director, shall disclose to the consumer the unit price of the consumer commodity as provided in this chapter.
    2. The same unit of weight, measure, or count shall be utilized to express the unit price of different sizes or brand names of the same or similar consumer commodities. All stamps, tags, or labels expressing the total price shall be standardized within each place of business and shall set forth the cents from dollars by use of a decimal point, different type or type size, or a cents sign.
  1. Every person who sells, offers for sale, or exposes for sale at retail any consumer commodity shall disclose to the consumer the total price of the consumer commodity as provided in this chapter.
  2. Wherever meat, poultry, fish, fresh vegetables, and fresh fruit are sold by a measure of weight and are packaged or wrapped for sale by a retailer in advance of being sold, offered for sale, or exposed for sale, an accurate computing scale of adequate capacity shall be placed in a conspicuous accessible location so the buyer may weigh the product that is being purchased.

History of Section. P.L. 1972, ch. 15, § 1; P.L. 1975, ch. 27, § 1; P.L. 1981, ch. 241, § 1; P.L. 1984, ch. 92, § 1; P.L. 2014, ch. 528, § 23.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-31-3. Means of disclosure.

Persons subject to the requirements of § 6-31-2 shall disclose the unit price and total price to consumers in one or more of the following appropriate ways:

  1. If the consumer commodity is so located that it is not conspicuously visible to the consumer, or if the consumer commodity is so located that the price information, if displayed in accordance with subdivision (2), would not be conspicuously visible to the consumer by a sign or list bearing the price information conspicuously placed near the point of procurement; or
  2. By attachment of a stamp, tag, or label directly adjacent to the consumer commodity, on the shelf on which the commodity is displayed, or by stamping or affixing the price information on the commodity itself; provided, however, that upon each commodity shall be stamped or affixed the total price of the commodity in arabic numerals if and when a computerized system is used; or
  3. In accord with regulations promulgated by the director.

History of Section. P.L. 1972, ch. 15, § 1; P.L. 1975, ch. 191, § 1; P.L. 2014, ch. 528, § 23.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-31-4. Repealed.

History of Section. P.L. 1972, ch. 15, § 1; Repealed by P.L. 1990, ch. 392, § 1, effective July 12, 1990.

Compiler’s Notes.

Former § 6-31-4 concerned advertising.

6-31-5. Director’s powers.

  1. The director shall do all of the following:
    1. Designate by regulation those consumer commodities, in addition to the consumer commodities specifically enumerated in § 6-31-2(a) , as to which display of the unit price shall be required upon a determination that the display will be in the best interest of consumers;
    2. Designate by regulation the unit of weight, measure, or count in terms of which the unit price of each consumer commodity shall be expressed, provided that no designated unit shall be such as to require persons subject to the provisions of § 6-31-2(a) to measure any consumer commodity solely for the purpose of complying with § 6-31-2(a);
    3. Designate by regulation whether the unit price of each consumer commodity subject to the provisions of § 6-31-2(a) shall be expressed to the nearest whole cent or to an appropriate fraction thereof;
    4. Exempt, by regulation, classes of retail establishments from any or all requirements of this chapter upon a determination that because sales of consumer commodities regulated by this chapter are purely incidental to the business of the classes of retail establishments, compliance with this chapter is impracticable and unnecessary for adequate protection of consumers; provided, however, that any person, firm, corporation, or other business entity with less than eight (8) full-time employees shall be exempt from the provisions of this chapter;
    5. Prescribe, by regulation, means for the disclosure of price information upon determination that they are more effective than those prescribed in § 6-31-3 ; and
    6. Promulgate any other regulation necessary to effectuate the provisions of this chapter in accordance with the best interests of consumers.
  2. The director shall give public notice of his or her intention to promulgate regulations pursuant to subsection (a) and shall receive the opinions of interested parties on the regulations. Regulations shall take effect thirty (30) days from the date on which the notice is given.
  3. The director shall hold hearings whenever he or she has probable cause to believe, or whenever twenty-five (25) or more citizens state in writing to the director their belief, that the actions of any person subject to the provisions of this chapter have evidenced a pattern of noncompliance with any or all of those provisions. Pursuant to the hearings, to which the suspected violator shall be invited with written notice at least ten (10) days before the hearing is held, the director shall, upon a finding that a pattern of noncompliance has been shown:
    1. Issue a warning citation; or
    2. Report any pattern of noncompliance to the attorney general who shall cause appropriate proceedings to be instituted in the proper courts.

History of Section. P.L. 1972, ch. 15, § 1; P.L. 1987, ch. 433, § 1; P.L. 1988, ch. 529, § 1; P.L. 2014, ch. 528, § 23.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-31-6. Penalties.

Any person whose actions evince a pattern of noncompliance with any or all provisions of this chapter shall be punishable by imprisonment for a term not exceeding six (6) months or by a fine of not more than five hundred dollars ($500), or by a fine only of not more than five hundred dollars ($500).

History of Section. P.L. 1972, ch. 15, § 1.

Chapter 32 Lay-Away Sales

6-32-1. “Lay-away sales” defined.

As used in this chapter, “lay-away sales” means any sale of goods in which the goods are offered for sale to the public on terms that permit periodic payment for the goods and with respect to which delivery is deferred until completion of payment of the entire purchase price.

History of Section. P.L. 1976, ch. 291, § 2; P.L. 2014, ch. 528, § 24.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Repealed Sections.

The former chapter (P.L. 1974, ch. 122, § 1), consisting of §§ 6-32-1 6-32-3 and concerning lay-away sales, was repealed by P.L. 1976, ch. 291, § 1.

6-32-2. Duties of the seller.

It shall be unlawful for any seller of goods:

  1. To fail to disclose or to misrepresent in any way the store’s policy with reference to a “lay-away” sale;
  2. To represent to a buyer who is purchasing on a “lay-away” sale that the specific goods chosen by the buyer or an exact duplicate of the goods are being laid away for that buyer when that is not a fact;
  3. To fail to disclose to the buyer that the specified goods or their exact duplicate will only be set aside for a certain period of time;
  4. To deliver to the buyer after payments (pursuant to the lay-away sale) are completed, goods that are not identical to, or exact substitutes of, those specified, unless prior approval in writing has been received from the buyer;
  5. To increase the price of the goods specified either by way of increasing the payments or substituting goods that are of a lower quality or price;
  6. To fail to deliver to the buyer, on any date payment is made, a receipt showing the amount and the date of that payment, and, upon request, the balance of payments made up to that date.

History of Section. P.L. 1976, ch. 291, § 2; P.L. 2014, ch. 528, § 24.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-32-3. Right to cancel — Method — Exception for special-order merchandise.

  1. In addition to any right otherwise to revoke an offer, the buyer may cancel a lay-away plan sale by written notice of cancellation to the seller at the address specified for notice of cancellation provided by the seller not later than midnight ten (10) days following the buyer’s signing the agreement, excluding Sunday and any holiday on which regular mail deliveries are not made. After the ten (10) days the seller may retain no more than ten percent (10%) of the total payments made. The notice of cancellation shall be by personal delivery of registered or certified mail.
  2. This right to cancel a lay-away plan sale shall not apply to special order merchandise, that, for the purposes of this section, means:
    1. Merchandise that is to be custom made and the seller has made either a commitment for its procurement or a substantial beginning of its production; or
    2. Merchandise that substantially differs from the merchandise that the seller ordinarily offers for sale.

History of Section. P.L. 1976, ch. 291, § 2; P.L. 1979, ch. 163, § 1; P.L. 2014, ch. 528, § 24.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-32-4. Notice required on agreement.

  1. No lay away sale shall be effective unless a written memorandum of the sale is signed and dated by the buyer and unless it conspicuously contains the following directly above the space reserved in the agreement or sales slip for the signature of the buyer:

    Notice to buyer:

    1. You are entitled to a copy of this document at the time you sign it.
    2. You may at any time pay off the full unpaid balance due under this agreement, and in so doing you may be entitled to receive a partial rebate of the finance and insurance charges, if any.
    3. You may cancel this agreement provided you notify the seller in person or by registered or certified mail, which shall be given not later than midnight of the tenth calendar day after the day on which the buyer signs the agreement, excluding Sunday and any holiday on which regular mail deliveries are not made.
  2. The seller is not precluded from using his or her own form of notice provided it at least affords the consumer the protection of the statutory notice.

History of Section. P.L. 1976, ch. 291, § 2; P.L. 1980, ch. 380, § 1.

6-32-5. Seller’s obligations on cancellation.

Within thirty (30) days after a lay-away sale has been cancelled, the seller shall tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness. If the down payment includes goods traded in, the goods shall be tendered in substantially as good condition as when received. If the seller fails to tender the goods as provided in this section, the buyer may elect to recover an amount equal to the trade in allowance stated in the agreement.

History of Section. P.L. 1976, ch. 291, § 2; P.L. 2014, ch. 528, § 24.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-32-6. Penalty for violation.

Any person who violates any provision of this chapter shall be guilty of a misdemeanor.

History of Section. P.L. 1976, ch. 291, § 2.

Chapter 33 Unsolicited Goods

6-33-1. Unsolicited goods.

If unsolicited goods or merchandise of any kind are either addressed to or intended for the recipient, the goods or merchandise shall, unless otherwise agreed, be deemed a gift to the recipient who may use them or dispose of them in any manner without any obligation to the sender.

History of Section. P.L. 1975, ch. 145, § 1.

Chapter 34 Construction Indemnity Agreements

6-34-1. Construction indemnity agreements.

  1. A covenant, promise, agreement, or understanding in, or in connection with or collateral to, a contract or agreement relative to the design, planning, construction, alteration, repair, or maintenance of a building, structure, highway, road, appurtenance, and appliance, including moving, demolition, and excavating connected with a building, structure, highway, road, appurtenance, or appliance, pursuant to which contract or agreement the promisee or the promisee’s independent contractors, agents, or employees has hired the promisor to perform work, purporting to indemnify the promisee, the promisee’s independent contractors, agents, employees, or indemnitees against liability for damages arising out of bodily injury to persons or damage to property proximately caused by or resulting from the negligence of the promisee, the promisee’s independent contractors, agents, employees, or indemnitees, is against public policy and is void; provided that this section shall not affect the validity of any insurance contract, worker’s compensation agreement, or an agreement issued by an insurer.
  2. Nothing in this section shall prohibit any person from purchasing insurance for his or her own protection or from purchasing a construction bond.

History of Section. P.L. 1976, ch. 247, § 1.

NOTES TO DECISIONS

Agreements Permitted.

There is nothing in this section that bars a general contractor from attempting to secure indemnification from a subcontractor for claims resulting from negligence on the part of the subcontractor or of any subcontractor employed by the subcontractor. Cosentino v. A.F. Lusi Constr. Co., 485 A.2d 105, 1984 R.I. LEXIS 640 (1984).

Agreements Prohibited.

This section, by its express terms, invalidates any agreement in which a party seeks indemnification from another for the consequences of its own or its agent’s negligence; however, the legislature has not prohibited the use of all indemnification contracts in the construction industry. Cosentino v. A.F. Lusi Constr. Co., 485 A.2d 105, 1984 R.I. LEXIS 640 (1984).

A subcontract which provides that the subcontractor is responsible for full indemnification even when the negligence of both the general contractor and subcontractor contributed to the injuries is void as against public policy under this section. Cosimini v. Atkinson-Kiewit Joint Venture, 877 F. Supp. 68, 1995 U.S. Dist. LEXIS 2172 (D.R.I. 1995).

Applicability of Workers’ Compensation.

When a general contractor is sued by an employee of the subcontractor under circumstances covered by the Rhode Island Workers’ Compensation Act, the general contractor can obtain indemnification from a negligent subcontractor only if the contract so provides. In the absence of such a contract, the subcontractor is immune, pursuant to the Workers’ Compensation Act, from tortfeasor liability and from the obligation of contribution. Cosimini v. Atkinson-Kiewit Joint Venture, 877 F. Supp. 68, 1995 U.S. Dist. LEXIS 2172 (D.R.I. 1995).

Arbitration.

Trial court properly confirmed an arbitration award in favor of a property owner because the arbitrator’s decision drew its essence from the contract between the contractor and the subcontractor and was sufficiently grounded in the contract to be within the scope of his authority; although the arbitrator’s reliance on the indemnity clause could have been erroneous, the arbitrator’s interpretation of the agreement was plausible and rational and did not manifestly disregard the law. Atwood Health Props., LLC v. Calson Constr. Co., 111 A.3d 311, 2015 R.I. LEXIS 36 (2015).

Prior Indemnity Agreements.

Arms-length contractual agreements to indemnify entered into before enactment of this section are not against public policy and are thus enforceable. Vaccaro v. E.W. Burman, Inc., 484 A.2d 880, 1984 R.I. LEXIS 628 (1984).

Where a subcontractor’s employee sues the general contractor after receiving workers’ compensation benefits from the subcontractor, and the jury apportions fault between the contractors, the general contractor is entitled to judgment on its cross-claim against the subcontractor, pursuant to an indemnity agreement signed by the subcontractor. Gormly v. I. Lazar & Sons, Inc., 926 F.2d 47, 1991 U.S. App. LEXIS 2077 (1st Cir. 1991).

Scope of Indemnification.

Both the indemnity provision and the insurance procurement obligation in the subcontract between the contractor and the subcontractor extended only to those damages attributable to the subcontractor’s percentage of negligence. Cosimini v. Atkinson-Kiewit Joint Venture, 877 F. Supp. 68, 1995 U.S. Dist. LEXIS 2172 (D.R.I. 1995).

Trial court erred in denying the general contractor’s post-verdict motion in the general contractor’s third-party action against the subcontractor arising out of the death of the subcontractor’s employee due to his fall on a school construction project; while it was true that the general contractor could not recover under an indemnification agreement where its own negligence caused the harm, once the jury determined that the general contractor was not negligent with respect to the employee’s death, the subcontractor had to indemnify the general contractor for the wrongful death settlement the general contractor entered into with the decedent’s estate, as the broad wording of the indemnification agreement that the subcontractor would indemnify the general contractor for any and all claims dictated that result. Rodrigues v. Depasquale Bldg. & Realty Co., 926 A.2d 616, 2007 R.I. LEXIS 79 (2007).

Subcontractor.

A subcontractor who had paid workers’ compensation benefits to its injured employee is not required to indemnify a third party general contractor for the settlement amount it paid to the injured worker. A & B Constr. v. Atlas Roofing & Skylight Co., 867 F. Supp. 100, 1994 U.S. Dist. LEXIS 15079 (D.R.I. 1994).

It was not necessary for the high court to decide whether an indemnification agreement that required subcontractor to indemnify the general contractor for liability for injuries to the subcontractor’s employee that were caused by the general contractor’s negligence, because there was no evidence the subcontractor had ever entered into an indemnification agreement with the general contractor; therefore, the court properly declared that the subcontractor’s liability insurer had no obligation to indemnify the general contractor. A.F. Lusi Constr., Inc. v. Peerless Ins. Co., 847 A.2d 254, 2004 R.I. LEXIS 81 (2004).

Collateral References.

Construction and Application of Insurance Procurement Contractual Provisions and Clauses — Evidentiary Matters, Damages and Recovery, Contract Language, Status of Claimant, and Other Considerations. 29 A.L.R.7th Art. 2 (2018).

Construction and Application of Insurance Procurement Contractual Provisions and Clauses — General Considerations, Indemnity Issues, and Nature of Agreement Containing Provisions and Clauses. 29 A.L.R.7th Art. 1 (2018).

Garnishment of funds payable under building and construction contract. 16 A.L.R.5th 548.

Chapter 34.1 Law Applicable to Construction Contracts

6-34.1-1. Law applicable to construction contracts.

  1. If a contract is principally for the construction or repair of improvements to real property located in Rhode Island and the contract contains a provision that makes the contract or any conflict arising under it subject to the law of another state; to litigation in the courts of another state; or to arbitration in another state; that provision is voidable by the party that is obligated by the contract to perform the construction or repair.
  2. A contract is principally for the construction or repair of improvements to real property located in Rhode Island if the contract obligates a party, as its principal obligation under the contract, to provide labor, or labor and materials, for the construction or repair of improvements to real property located in Rhode Island as a general contractor or subcontractor.
  3. A contract is not principally for the construction or repair of improvements to real property located in Rhode Island if:
    1. The contract is a partnership agreement or other agreement governing an entity or trust;
    2. The contract provides for a loan or other extension of credit and the party promising to construct or repair improvements does so as part of its agreements with the lender or other extender of credit; or
    3. The contract is for the management of real property or improvements and the obligation to construct or repair is part of that management.
  4. Subsections (b) and (c) of this section are not an exclusive list of situations in which a contract is or is not principally for the construction or repair of improvements to real property located in this state.
  5. The superior court of the state of Rhode Island shall have exclusive jurisdiction in relation to the construing or enforceability of § 6-34.1-1 .

History of Section. P.L. 2002, ch. 392, § 1; P.L. 2006, ch. 379, § 1; P.L. 2006, ch. 509, § 1; P.L. 2014, ch. 528, § 25.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 35 Highway Accident Agreements

6-35-1. Agreements.

Any contractual agreement relating to the repair of a motor vehicle entered into as a direct and immediate result of an automobile collision on a public highway, thoroughfare, or street may be rescinded at the option of the owner of the motor vehicle within forty-eight (48) hours after the occurrence of the accident by presenting written notice of the rescission to the other party. The owner of the motor vehicle shall not be liable for the cost of any repair work done prior to the expiration of the rescission period and the motor vehicle must be returned to the owner upon request.

History of Section. P.L. 1978, ch. 143, § 1.

6-35-2. Exemptions.

Nothing contained in this chapter shall apply to a contractual agreement for the towing of a motor vehicle or for services directed by a law enforcement officer in the exercise of his or her duly authorized police powers.

History of Section. P.L. 1978, ch. 143, § 1.

6-35-3. Conflict with other law.

Whenever the application of any provisions of any other law of this state conflicts with the application of any provision of this chapter, then this chapter shall prevail.

History of Section. P.L. 1978, ch. 143, § 1.

Chapter 36 Antitrust Law

6-36-1. Short title.

This chapter shall be known and may be cited as the “Rhode Island Antitrust Act.”

History of Section. P.L. 1979, ch. 98, § 1.

Comparative Legislation.

Antitrust:

Conn. Gen. Stat. § 35-24 et seq.

Mass. Ann. Laws ch. 93, § 1 et seq.

Collateral References.

Application of state antitrust laws to activities or practices of real-estate agents or associations. 22 A.L.R.4th 103.

Application of state antitrust laws to athletic leagues or associations. 85 A.L.R.3d 970.

Covenant restricting use of land, made for purpose of guarding against competition, as running with land. 25 A.L.R.3d 897.

Enforceability, insofar as restrictions would be reasonable, of contract containing unreasonable restrictions on competition. 61 A.L.R.3d 397.

Enforceability of covenant not to compete involving radio or television personality. 36 A.L.R.4th 1139.

Meaning of terms “city,” “town,” or the like as employed in restrictive covenants not to compete. 45 A.L.R.3d 1339.

Right of Retail Buyer of Price-Fixed Product to Sue Manufacturer on State Antitrust Claim. 35 A.L.R.6th 245.

Shopping center lease restrictions on type of business conducted by tenant. 1 A.L.R.4th 942.

Sufficiency of consideration for employee’s covenant not to compete, entered into after inception of employment. 51 A.L.R.3d 825.

Validity and construction of restrictive covenant not to compete ancillary to franchise agreement. 50 A.L.R.3d 746.

Validity, construction, and application of state statute forbidding unfair trade practice or competition by discriminatory allowance of rebates, commissions, discounts, or the like. 41 A.L.R.4th 675.

Validity, construction and effect of real-estate brokers’ multiple listing agreement. 45 A.L.R.3d 190.

Vertical restraints on sales territory or location as violative of § 1 of Sherman Act (15 U.S.C. § 1) — post-GTE Sylvania cases. 92 A.L.R. Fed. 436.

6-36-2. Purpose — Rules of construction.

  1. The purposes of this chapter are:
    1. To complement the laws of the United States governing monopolistic and restrictive trade practices; and
    2. To promote the unhampered growth of commerce and industry throughout the state by prohibiting unreasonable restraints of trade and monopolistic practices, inasmuch as these have the effect of hampering, preventing, or decreasing competition. It is intended, that as a result, the prices of goods and services to consumers will be fairly determined by free-market competition in activities affecting trade or commerce in this state, including the manufacturing, distribution, financing, and service sectors of the economy, except as otherwise provided by the statutes, regulations, and judicial decisions of this state. The general assembly intends to fully exercise its power to affect and regulate commerce in order to effectuate the purpose of this chapter.
  2. This chapter shall be construed in harmony with judicial interpretations of comparable federal antitrust statutes insofar as practicable, except where provisions of this chapter are expressly contrary to applicable federal provisions as construed.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Law Reviews.

2002 Survey of Rhode Island Law, see 8 Roger Williams U.L. Rev. 421 (2003).

NOTES TO DECISIONS

In General.

The purpose of the antitrust laws is to protect competition, not competitors. UXB Sand & Gravel v. Rosenfeld Concrete Corp., 599 A.2d 1033, 1991 R.I. LEXIS 158 (1991).

Antitrust laws do not prohibit all restraints of trade but only unreasonable restraints. UXB Sand & Gravel v. Rosenfeld Concrete Corp., 599 A.2d 1033, 1991 R.I. LEXIS 158 (1991).

Basis of Harm.

Where the purported harm arose out of the independent acts of referring physicians, based on their own assessment of the convenience, utility, and advantages of using one provider versus another, rather than out of the provisions of an exclusive agreement, any business plaintiff provider lost would not be an antitrust injury. Greater Providence MRI Ltd. Pshp. v. Medical Imaging Network, 32 F. Supp. 2d 491, 1998 U.S. Dist. LEXIS 19442 (D.R.I. 1998).

Evidence.

Since Rhode Island law incorporates interpretations of the federal antitrust statutes, the potential for proof of a violation of Rhode Island law was the same as that for a violation of §§ 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2). Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

In antitrust cases summary judgment is appropriate when a plaintiff fails to present evidence to support a conclusion that the alleged anticompetitive conduct is more probable than not. UXB Sand & Gravel v. Rosenfeld Concrete Corp., 599 A.2d 1033, 1991 R.I. LEXIS 158 (1991).

6-36-3. Definitions.

For the purposes of this chapter, the terms defined in this section have the following meanings:

  1. “Commodity” means any goods, merchandise, wares, produce, chose in action, article of commerce, or any other tangible or intangible property, real, personal, or mixed, for use, consumption, enjoyment, or resale;
  2. “Department” means the department of attorney general of this state;
  3. “Documentary material” means any original or copy of any book, record, memorandum, paper communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording;
  4. “Investigative demand” or “demand” means an investigative demand pursuant to § 6-36-9(b) ;
  5. “Person” means any natural person or the estate of any natural person; or trust or association of persons, whether formal or otherwise; or any corporation, partnership, company, or any other legal or commercial entity;
  6. “Public body” means the state of Rhode Island; any of its public agencies; cities and towns; its other political subdivisions; and other authorities;
  7. “Service” means any kind of activity performed in whole or in part for financial gain including, but not limited to, personal services;
  8. “Trade or commerce” means any economic activity of any type whatsoever involving any commodity or service or business activity whatsoever.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 1985, ch. 350, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Home Repair Business.

Although a home repair business is an “economic activity involving real estate,” when the activity involves less than $1,000,000 within a 12-month period the business is not engaged in “trade or commerce” as defined in subdivision (8) and the antitrust statutes are inapplicable. State v. Calise, 478 A.2d 198, 1984 R.I. LEXIS 564 (1984) (decided prior to 1985 amendment to subdivision (7)).

6-36-4. Restraint of trade or commerce.

Every contract, combination, or conspiracy in restraint of, or to monopolize, trade or commerce is unlawful.

History of Section. P.L. 1979, ch. 98, § 1.

NOTES TO DECISIONS

In General.

The antitrust laws protect competition, not competitors. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Mere common ownership will not insulate entities from the reach of federal antitrust law. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Exclusive Dealerships.

In antitrust suit by independent newspaper distributors against the main publisher of newspapers in Rhode Island and its wholly owned distribution company, efforts to consolidate distribution through exclusive dealership was not sufficiently in restraint of trade and monopolistic to justify preliminary injunction under federal law. Auburn News Co. v. Providence Journal Co., 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981), cert. denied, 455 U.S. 921, 102 S. Ct. 1277, 71 L. Ed. 2d 461, 1982 U.S. LEXIS 683 (1982).

The mere existence of an exclusive-dealing contract, without proof of substantial market foreclosure, injury to competition, or specific intent to fix prices or destroy competition, does not constitute a violation of federal or state antitrust laws. ERI Max Entertainment v. Streisand, 690 A.2d 1351, 1997 R.I. LEXIS 78 (1997).

Vertical and Horizontal Arrangements Compared.

Group boycotts involve horizontal agreements rarely furthering competitive activity while at the same time stifling competitive forces of the market place, whereas exclusive dealerships and vertical arrangements in general often are competitive in effect and their competitive effects often offset any anticompetitive effects. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Collateral References.

Application of Clayton Act to mergers and acquisitions of hospitals and healthcare systems (15 U.S.C. §§ 12 to 27). 13 A.L.R. Fed. 3d Art. 7 (2016).

Construction and application of public interest requirement of Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(e)(1) (Tunney Act). 2 A.L.R. Fed. 3d Art. 4 (2015).

6-36-5. Establishment, maintenance, or use of monopoly power.

The establishment, maintenance, or use of a monopoly, or an attempt to establish a monopoly, of trade or commerce by any person, for the purpose of excluding competition or controlling, fixing, or maintaining prices, is unlawful.

History of Section. P.L. 1979, ch. 98, § 1.

NOTES TO DECISIONS

Elements of Attempt to Monopolize.

To demonstrate an attempt to monopolize, one must show a specific intent to monopolize and a dangerous probability of success. H.J. Baker & Bro. v. Orgonics, Inc., 554 A.2d 196, 1989 R.I. LEXIS 16 (1989).

Exclusive Dealerships.

In antitrust suit by independent newspaper distributors against the main publisher of newspapers in Rhode Island and its wholly owned distribution company, efforts to consolidate distribution through exclusive dealership was not sufficiently in restraint of trade and monopolistic to justify preliminary injunction under federal law. Auburn News Co. v. Providence Journal Co., 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981), cert. denied, 455 U.S. 921, 102 S. Ct. 1277, 71 L. Ed. 2d 461, 1982 U.S. LEXIS 683 (1982).

The mere existence of an exclusive-dealing contract, without proof of substantial market foreclosure, injury to competition, or specific intent to fix prices or destroy competition, does not constitute a violation of federal or state antitrust laws. ERI Max Entertainment v. Streisand, 690 A.2d 1351, 1997 R.I. LEXIS 78 (1997).

Inferences.

An inference of monopoly power can be made from an overwhelming market share. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Specific intent to monopolize can be inferred when the natural outcome of defendants’ actions is the elimination of competition. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Market Share.

Market share should not be measured by absolute population figures but should reflect the number of those who demonstrate an actual or potential interest in the market in which the competition is measured. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Products Must Be Interchangeable.

Antitrust law is only concerned with products reasonably interchangeable with one another, in other words, products for which there is some cross elasticity of demand. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

Relevant Market.

The relevant geographic market is that area to which plaintiffs can practically turn for the product. Auburn News Co. v. Providence Journal Co., 504 F. Supp. 292, 1980 U.S. Dist. LEXIS 15026 (D.R.I. 1980), rev'd, 659 F.2d 273, 1981 U.S. App. LEXIS 17424 (1st Cir. 1981).

A claimant failed to demonstrate that the respondent’s actions had a substantial effect on the sales of the claimant’s fertilizer product in the relevant geographic area, where, although there was evidence that similar products were marketed in an area extending throughout New England, into the Mid-Atlantic states, and into Florida, the claimant failed to introduce sufficient evidence from which a jury could determine the relevant product or geographic markets. H.J. Baker & Bro. v. Orgonics, Inc., 554 A.2d 196, 1989 R.I. LEXIS 16 (1989).

Collateral References.

Application of Clayton Act to mergers and acquisitions of hospitals and healthcare systems (15 U.S.C. §§ 12 to 27). 13 A.L.R. Fed. 3d Art. 7 (2016).

Construction and application of public interest requirement of Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(e)(1) (Tunney Act). 2 A.L.R. Fed. 3d Art. 4 (2015).

6-36-6. Certain contracts unlawful.

A contract for the supplying of commodities or furnishing of services; or for the fixing of prices charged for the commodities or services; or for the giving or selling of a discount or rebate, on the condition, agreement, or understanding that one party shall not deal in the commodities or services of a competitor or competitors of the other party; is unlawful where the effect of the contract or the condition, agreement, or understanding may be to lessen competition or tend to create a monopoly in any line of commerce in any region of this state.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Exclusive Dealerships.

The mere existence of an exclusive-dealing contract, without proof of substantial market foreclosure, injury to competition, or specific intent to fix prices or destroy competition, does not constitute a violation of federal or state antitrust laws. ERI Max Entertainment v. Streisand, 690 A.2d 1351, 1997 R.I. LEXIS 78 (1997).

In an action by pharmacies against health insurers and network pharmacies regarding the network pharmacies’ sale of prescription pharmaceuticals, the pharmacies failed to demonstrate that the concerted action by the health insurers and network pharmacies was a per se unreasonable restraint of trade in connection with the retail sale of prescription pharmaceutical products in violation of 15 U.S.C. §§ 1 and 14, or R.I. Gen. Laws § 6-36-6 , but there were disputed factual issues regarding whether the actions of the health insurers and network pharmacies violated 15 U.S.C. §§ 1 and 14, or R.I. Gen. Laws § 6-36-6 under the rule of reason, and whether the pharmacies could prove the necessary rule of reason factors. Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield, 239 F. Supp. 2d 180, 2003 U.S. Dist. LEXIS 4111 (D.R.I. 2003), aff'd, 373 F.3d 57, 2004 U.S. App. LEXIS 12493 (1st Cir. 2004).

Collateral References.

Application of Clayton Act to mergers and acquisitions of hospitals and healthcare systems (15 U.S.C. §§ 12 to 27). 13 A.L.R. Fed. 3d Art. 7 (2016).

Construction and application of public interest requirement of Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(e)(1) (Tunney Act). 2 A.L.R. Fed. 3d Art. 4 (2015).

6-36-7. Scope of chapter.

  1. This chapter applies to: (1) any contract, combination, or conspiracy, wherever created, formed, or entered into; (2) any establishment, maintenance, or use of monopoly power; and (3) any attempt or conspiracy to establish, maintain, or use monopoly power; wherever any of the foregoing has an impact on trade or commerce of this state sufficient to invoke the jurisdiction of the superior court.
  2. In deciding whether conduct restrains or monopolizes trade or commerce or may substantially lessen competition within this state, determination of the relevant market or effective area of competition shall not be limited by the boundaries of this state. However, some portion of the relevant market or effective area of competition must be at least in part within this state.
  3. No action or proceeding instituted pursuant to the provisions of this chapter shall be barred on the ground that the activity or conduct complained of in any way affects or involves interstate or foreign commerce.
  4. In any action under this chapter, the fact that a person or public body has not dealt directly with the defendant shall not bar or otherwise limit recovery. Provided, however, that courts shall exclude from the amount of monetary relief awarded in the action any amount of monetary relief which duplicates amounts which have been awarded for the same injury.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2013, ch. 274, § 1; P.L. 2013, ch. 365, § 1.

NOTES TO DECISIONS

Artful Pleading Doctrine.

The artful pleading doctrine applies to support removal only when claims previously filed as federal claims in federal court are resubmitted in state court as state law claims: artful pleading doctrine would not apply when the plaintiff under the Rhode Island Antitrust Act raised claims that were not raised in prior federal litigation and therefore there were no claims for plaintiff to “resubmit” to the state court. Delta Dental v. Blue Cross & Blue Shield, 942 F. Supp. 740, 1996 U.S. Dist. LEXIS 14413 (D.R.I. 1996).

Construction With Federal Law.

There has never been a clear congressional intent to pre-preempt state regulation in the field of antitrust law; the federal law and this section create a system of joint antitrust enforcement in which states retain the ability to regulate commercial activities that take place within their borders, even if the challenged activity has interstate aspects. Delta Dental v. Blue Cross & Blue Shield, 942 F. Supp. 740, 1996 U.S. Dist. LEXIS 14413 (D.R.I. 1996).

Prospective Operation.

Illinois Brick-repealer statute, effective July 15, 2013, which expressly conveys standing to indirect purchasers, R.I. Gen. Laws § 6-36-7(d) , is presumed to apply only prospectively, absent evidence of legislative intent to the contrary. Therefore, the End-Payor Plaintiffs’ recovery under the Rhode Island Antitrust Act, R.I. Gen. Laws § 6-36-1 et seq., was limited to damages incurred after July 15, 2013. In re Loestrin 24 Fe Antitrust Litig., 410 F. Supp. 3d 352, 2019 U.S. Dist. LEXIS 182299 (D.R.I. 2019).

6-36-8. Exemptions.

Any activity or activities exempt from the provisions of the antitrust laws of the United States shall be similarly exempt from the provisions of this chapter. The exemptions shall be liberally construed in harmony with federal statutes and ruling judicial interpretations of the United States courts, with due regard for the need to exempt conduct otherwise exempt under federal law but for the absence of any nexus with interstate commerce, except where the provisions of this chapter are expressly contrary to applicable federal provisions as construed. Nothing contained in this chapter shall be construed to apply to activities or arrangements approved by any regulatory body or officer acting under statutory authority of this state or of the United States.

History of Section. P.L. 1979, ch. 98, § 1.

Collateral References.

What constitutes “state action” rendering public official’s participation in private antitrust activity immune from application of federal antitrust laws. 109 A.L.R. Fed. 758.

6-36-9. Investigation by attorney general.

  1. General power of investigation.  Whenever it appears to the attorney general, upon reasonable cause, that any person has engaged in, engages in, or is about to engage in any act or practice prohibited by this chapter; or that any person has assisted or participated in any plan, scheme, agreement, or combination of the nature prohibited by this chapter; or whenever the attorney general believes it to be in the public interest that an investigation be made; he or she may, in his or her discretion, either require or permit the complainant to file with the attorney general a statement in writing under oath or otherwise as to all facts and circumstances concerning the subject matter that the attorney general believes to be in the public interest to investigate. The attorney general may also require any other data and information from the complainant that he or she deems relevant and may make any special and independent investigations that he or she deems necessary in connection with the matter. In addition, the attorney general may take any measures that will not violate due process of law to preserve the confidentiality of the complainant’s identity.
  2. Investigative demand.
    1. Whenever the attorney general has reason to believe that any person may have knowledge or be in possession, custody, or control of any documentary material pertinent to an investigation of a possible violation of this chapter, the attorney general may issue in writing and cause to be served upon the person an investigative demand by which the attorney general may:
      1. Compel the attendance of the person and require him or her to submit to examination and give testimony under oath;
      2. Require the production of documentary material pertinent to the investigation for inspection or copying; and/or
      3. Require answer to written interrogatories to be furnished under oath.
    2. The power to issue investigative demands shall neither abate nor terminate by reason of the bringing of any action or proceeding under this chapter. The attorney general may issue successive investigative demands to the same person in order to obtain additional information pertinent to an ongoing investigation.
  3. Contents of investigative demand.  Each investigative demand shall:
    1. State the section or sections of the chapter the alleged violation of which is under investigation and the general subject matter of this investigation;
    2. Prescribe a reasonable return date no less than forty (40) days after service of the investigative demand, provided that an earlier date may be prescribed under compelling circumstances, but in no event less than twenty (20) days;
    3. Specify the time and place at which the person is to appear and give testimony; produce documentary material; and furnish answers to interrogatories; or do any or a combination of these things;
    4. Describe by class any documentary material required to be produced so as to clearly indicate what is demanded; and
    5. Contain any interrogatories to which written answers under oath are required.
  4. Prohibition against unreasonable demand.  No investigative demand shall:
    1. Contain any requirement that would be unreasonable or improper if contained in a subpoena issued by a court of this state; or
    2. Require the disclosure of any material or information that would be privileged, or which for any other reason would not be required to be disclosed by a subpoena issued by a court of this state, including, but not limited to, trade secrets or confidential scientific, technical, merchandising, production, management, or commercial information, to the extent that the material or information is protected pursuant to the rules of civil procedure of the superior court.
  5. Offer of documentary evidence.  Where the information requested upon oral examination or written interrogatory pursuant to an investigative demand may be derived or ascertained from the business records of the person upon whom the demand has been served; or from an examination, audit, or inspection of the business records; or from a compilation, abstract, or summary based on the records; and the burden of deriving or ascertaining the answer is substantially the same for the attorney general as for the person from whom the information is requested, it is sufficient for that person to specify the records from which the answer may be derived or ascertained and to afford the attorney general reasonable opportunity to examine, audit, or inspect the records and to make copies, compilations, abstracts, or summaries.
  6. Service of investigative demand.  An investigative demand may be served by any means provided under the Rhode Island rules of civil procedure for service of a complaint in a civil action.
  7. Motion to quash.  Within forty (40) days after the service of an investigative demand or at any time before the return date specified in the demand, whichever period is shorter, the person served may file in a state superior court and serve upon the attorney general a petition for an order of court modifying or setting aside the demand. The time allowed for compliance in whole or part with the demand as deemed proper and ordered by the court shall not run while the petition is pending before the court. The petition shall specify each ground upon which the petitioner relies in seeking relief, and may be based upon any failure of the demand to comply with the provisions of this chapter or upon any constitutional or other legal right, privilege, or qualified privilege of the party, including that the material or information sought constitutes trade secrets or confidential scientific, technical, merchandising, production, management, or commercial information. If qualified privilege is raised, the court may order the person to comply with the demand only upon showing of particularized need and subject to an appropriate protective order. The provisions of this subsection shall be the sole and exclusive means for challenging the requirements of a demand.
  8. Those authorized to examine.  The examination of all persons pursuant to this section shall be conducted by the attorney general or a representative designated in writing by him or her before an officer authorized to administer oaths in this state. The statements made shall be taken down stenographically or by a sound recording device and shall be transcribed.
  9. Right of persons served with investigative demands.
    1. Any person required to attend and give testimony or to submit documentary material pursuant to this section shall be entitled to retain or, on payment of lawfully prescribed cost, to procure a copy of any document he or she produces and of his or her own statements as transcribed.
    2. Any person compelled to appear under a demand for oral testimony pursuant to this section may be accompanied, represented, and advised by counsel. Counsel may advise the person in confidence, either upon the request of the person or upon counsel’s own initiative, with respect to any question asked of the person. The person or counsel may object on the record to any question, in whole or part, and shall briefly state for the record the reason for the objection. An objection may properly be made, received, and entered upon the record when it is claimed that the person is entitled to refuse to answer the question on grounds of any constitutional or other legal right or privilege, including the privilege against self incrimination. The person shall not otherwise object to or refuse to answer any question, and shall not by him or herself or through counsel otherwise interrupt the oral examination. If the person refuses to answer any question, the attorney general may petition the superior court for an order compelling the person to answer the question.
    3. The information and materials supplied to the attorney general pursuant to an investigative demand shall not be permitted to become public or disclosed by the attorney general or his or her employees beyond the extent necessary for antitrust enforcement purposes in the public interest.
    4. Upon the completion of a case brought under this chapter, the attorney general shall return any documents, answers, and transcripts, and all copies of the material that have not passed into the control of the court through their introduction into the record, to the person who provided the documents, answers, or testimony. If no case in which the material may be used has been commenced within a reasonable time after completion of the examination or analysis of all documentary material, but in no event later than two (2) years after production of the documentary material, the attorney general shall, upon written request of the person who produced the material, return all documents, answers, and transcripts, and all copies of the material, to the person who provided them.
    5. The attorney general shall have the authority, at any time, to modify or revoke any civil investigative demand and to stipulate to protective orders with respect to documents and information submitted in response to a demand. The protective orders may include provisions appropriate to the full and adequate protection of trade secrets.
  10. Witness expenses.  All persons served with an investigative demand, other than those persons whose conduct or practices are being investigated, or any officer, director, or person in the employment of the person under investigation, shall be paid the same fees and mileage as paid witnesses in the courts of this state. No person shall be excused from attending the inquiry pursuant to the mandate of an investigative demand; from giving testimony; from producing documentary material; or from being required to answer questions on the ground of failure to tender or pay a witness fee or mileage unless demand for the fees or mileage is made at the time testimony is about to be taken and unless payment is not made upon demand.
  11. Refusal of witness to testify or produce documents.  Any person who shall neglect or refuse to attend and give testimony or to answer any lawful inquiry or to produce documentary material, if in his or her power to do so, in obedience to an investigative demand pursuant to this section, may be adjudged in civil contempt by the superior court until the time that he or she purges him or herself of contempt by testifying, producing documentary material, or presenting written answers as ordered. Any person who commits perjury or false swearing in response to an investigative demand pursuant to this section shall be punishable pursuant to the provisions of chapter 33 of title 11.
  12. Duty to testify immunity.
    1. If, in any investigation brought by the attorney general pursuant to this section, any individual shall refuse to attend; to give testimony; to produce documentary material; or to answer a written interrogatory in obedience to an investigative demand, or under order of court, on the ground that the testimony or material required of him or her may tend to incriminate him or her, that person may be ordered to attend and to give testimony; to produce documentary material; or to answer the written interrogatory; or to do an applicable combination of these. The order as previously stated shall be an order of court given after a hearing in which the attorney general has established a need for the grant of immunity as provided in this subsection.
    2. The attorney general may petition any superior court justice for an order as described in subdivision (l)(1). The petition shall set forth the nature of the investigation and the need for the immunization of the witness.
    3. Testimony so compelled shall not be used against the witness as evidence in any criminal proceedings against him or her in any court. However, the grant of immunity shall not immunize the witness from civil liability arising from the transactions about which testimony is given, and he or she may nevertheless be prosecuted or subjected to penalty or forfeiture for any perjury, false swearing, or contempt committed in answering, or in failing to answer, or in producing evidence, or failing to do so, in accordance with the order. If a person refuses to testify after being granted immunity from prosecution and after being ordered to testify as previously stated, he or she may be adjudged in civil contempt by the superior court until the time that he or she purges him or herself of contempt by testifying; producing documentary material; or presenting written answers as ordered. The foregoing shall not prevent the attorney general from instituting other appropriate contempt proceedings against any person who violates any of the above provisions.
  13. Duty of public officials.  It shall be the duty of all officials of this state and its public bodies, their deputies, assistants, clerks, subordinates, or employees, and all other persons to render and furnish to the attorney general when so requested all information and assistance in their possession or within their power.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Cross References.

Service of complaint in civil action, R.I. R. Civ. P. 4.

Witness fees and mileage, § 9-29-7 .

6-36-10. Injunction against and civil penalties for violations of this chapter.

  1. Jurisdiction of courts.  The superior court of this state shall have jurisdiction to prevent and restrain violations of this chapter, provided that the statutory minimum amount in controversy is properly present. In addition to granting prohibitory injunctions and other restraints for a period and upon terms and conditions necessary to deter the defendant from, and insure against, the committing of future violations of this chapter, the courts may grant mandatory injunctions reasonably necessary to dissipate the ill effects of the violation. The courts may issue appropriate decrees upon consent and stipulation by the parties. The courts may also issue restraining orders. Under no circumstances shall the state or a public body be required to post bond in any action under this chapter.
  2. Right to injunctive relief.
    1. The attorney general may institute proceedings to prevent and restrain violations of this chapter as provided in subsection (a) of this section.
    2. Any person or public body including the United States, whether a direct or indirect purchaser, may institute proceedings for injunctive relief, temporary or permanent, as provided in subsection (a) of this section, against threatened loss or damage to his or her property or business by a violation of this chapter. A preliminary injunction may be issued upon a showing that the danger of irreparable loss or damage is immediate and, within the court’s discretion, the execution of proper bond against damages for an injunction improvidently granted. If the court issues a permanent injunction, the plaintiff shall be awarded reasonable attorney’s fees, filing fees, and reasonable costs of the suit. Reasonable costs for the suit may include, but shall not be limited to, the expenses of discovery and document reproduction.
  3. Civil penalty.  In addition to injunctive relief authorized pursuant to subsections (a) and (b) of this section, any person who violates this chapter may be liable for a civil penalty of not more than fifty thousand dollars ($50,000) for each violation.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2013, ch. 274, § 1; P.L. 2013, ch. 365, § 1.

Cross References.

Superior court jurisdiction of actions involving over $5,000, § 8-2-14 .

6-36-11. Enforcement.

  1. Action for treble damages.  Any person or public body, including the United States, injured in his or her business or property by reason of a violation of the provisions of this chapter may sue in superior court and shall recover threefold the damages sustained by him or her, together with reasonable costs of suit and any reasonable attorneys’ fees that may be granted at the discretion of the court. The reasonable costs of suit may include, but shall not be limited to, the expenses of discovery and document reproduction. In any action under this section the fact that a person or public body has not dealt directly with the defendant shall not bar or otherwise limit recovery. Provided, however, that the court shall exclude from the amount of the damages awarded in the action, any amount of monetary relief that duplicates amounts that have been awarded for the same injury, but shall not exclude reasonable costs and attorneys’ fees.
  2. Action by attorney general.  The attorney general shall investigate suspected violations of the provisions of this chapter and if he or she shall conclude that a violation is imminent, is occurring, or has occurred, he or she may institute on behalf of the state of Rhode Island or any of its departments, subdivisions, agencies, or its cities and towns, an action in superior court seeking appropriate relief. The attorney general may bring an action in federal court on behalf of the state of Rhode Island; any of its political subdivisions or agencies; or its cities and towns to recover the damages provided for by the federal antitrust laws, and pursuant to the federal laws may undertake any measures that he or she deems necessary for the successful conduct of the action.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2013, ch. 274, § 1; P.L. 2013, ch. 365, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Law Reviews.

2002 Survey of Rhode Island Law, see 8 Roger Williams U.L. Rev. 421 (2003).

NOTES TO DECISIONS

Standing.

A doctor and a law firm were indirect purchasers of the computer company’s operating system and, therefore, lacked standing to sue for antitrust violations; incidental agreements, such as end user licensing agreement and warranty, were insufficient to vest them with standing to sue as direct purchasers. Siena v. Microsoft Corp., 796 A.2d 461, 2002 R.I. LEXIS 97 (2002).

6-36-12. Attorney general — Suits parens patriae.

  1. The attorney general may bring a civil action in superior court in the name of the state, as parens patriae on behalf of persons residing in this state, to secure monetary relief as provided in this section for injuries sustained by the persons to their property by reason of any violation of this chapter. This parens patriae action shall take precedence, have priority status, and automatically stay any other action by a city or town in superior court seeking monetary relief for the same injuries sustained by the persons to their property by reason of any violation of this chapter. The court shall exclude from the amount of monetary relief awarded in this action any amount of monetary relief:
    1. That duplicates amounts that have been awarded for the same injury; or
    2. That is properly allocable to persons who have excluded their claims pursuant to subsection (c)(1) of this section.
  2. The court shall award the state as monetary relief threefold the total damage sustained as described in subsection (a) of this section and the costs of suit, including a reasonable attorney’s fee.
    1. In any action brought under subsection (a) of this section, the attorney general shall, at the times, in the manner, and with the content that the court may direct, cause notice of the action to be given by publication.
    2. Any person on whose behalf an action is brought under subsection (a) may elect to exclude from adjudication the portion of the state claim for monetary relief attributable to him or her by filing notice of the election with the court within the time specified in the notice given pursuant to subsection (c)(1) of this section.
    3. The final judgment in an action under subsection (a) shall be res judicata as to any claim under § 6-36-11 by any person on behalf of whom the action was brought and who fails to give the notice within the period specified in the notice given pursuant to subsection (c)(1) of this section.
  3. An action under subsection (a) shall not be dismissed or compromised without the approval of the court and notice of any proposed dismissal or compromise shall be given by publication at the times, in the manner, and with the content that the court may direct.
  4. In any action under subsection (a):
    1. The amount of the plaintiff’s attorney’s fees, if any, shall be determined by the court and any attorney’s fees awarded to the attorney general shall be deposited with the state as general revenues; and
    2. The court may, in its discretion, award a reasonable attorney’s fee to a prevailing defendant upon a finding that the attorney general has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.
  5. Monetary relief recovered in an action under this section shall: (1) Be distributed in any manner that the court in its discretion may authorize; or (2) Be deemed a civil penalty by the court and deposited with the state as general revenues; subject in either case to the requirement that any distribution procedure adopted afford each person a reasonable opportunity to secure his or her appropriate portion of the net monetary relief.
  6. In any action under this section the fact that a person or public body has not dealt directly with the defendant shall not bar or otherwise limit recovery. Provided, however, that the court shall exclude from the amount of monetary relief awarded in the action any amount of monetary relief that duplicates amounts that have been awarded for the same injury. No provision of this chapter shall be construed to limit the standing of any person or public body, whether the person or public body is a direct or indirect purchaser, from bringing suit on his or her own behalf.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2013, ch. 274, § 1; P.L. 2013, ch. 365, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-36-13. Proof of aggregate damages.

In any action brought by the attorney general under either § 6-36-11 or 6-36-12 , the attorney general may recover aggregate damages sustained by the public bodies and by the citizens and residents of this state as respectively their interests shall appear in the case, without separately proving the claims of each of them; and his or her proof of the damages may be based upon statistical sampling methods, the pro rata allocation of excess profits to sales of other transactions occurring wholly or partially within this state or, any other reasonable system of estimating aggregate damages that the court in its discretion may permit.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-14. Agreements with other plaintiffs — Settlements — Cooperation with other governments — Division of antitrust.

  1. In any action brought by the attorney general pursuant either to this chapter or to the federal antitrust laws, or both, for the recovery of damages or other proper relief, the attorney general may enter into agreements relating to the investigation and litigation of the action with any other party plaintiff who has brought a similar action and with whom the attorney general finds it advantageous to act jointly or to share common expenses or to cooperate in any manner relative to the action. The attorney general may enter settlements with defendants that provide for the payment of money to plaintiffs.
  2. The attorney general may cooperate with officials of the federal government and of the several states in the investigation and enforcement of violations to the end that implementation of this chapter will be accomplished in the most equitable and efficient manner possible.
  3. The attorney general may establish a division of antitrust within the department of attorney general to enforce this chapter, and he or she may employ any assistant attorneys general, special assistant attorneys general, economic analysts, investigators, and clerical staff that may be required to support the division.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-15. Common law powers.

No provision of this chapter shall be construed to limit the common law powers of the attorney general.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-16. Criminal penalties — Consent decrees.

  1. Fines and penalties.  Any person or corporation, or any officer or agent of any person or corporation, who shall knowingly violate the provisions of this chapter or knowingly aid in or advise a violation, or who, as principal, manager, director, stockholder owning ten percent (10%) or more of the aggregate outstanding capital stock of all classes of the corporation, agent, servant, or employee, knowingly does any act comprising part of a violation, is guilty of a felony and shall be punished by a fine not exceeding one million dollars ($1,000,000) if a corporation, or, if a natural person, by not more than three (3) years imprisonment or by a fine of not more than one hundred thousand dollars ($100,000), or both imprisonment and fine, in the discretion of the court.
  2. Consent decrees.  The attorney general may petition the court for entry of a consent decree dismissing any criminal prosecution under this chapter, but the court shall review the proceeding to determine whether entry of a consent decree dismissing any criminal prosecution is in the public interest.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-17. Forfeiture of charter rights and privileges to do business.

    1. Upon the failure of any person to comply with the terms of a final judgment or decree rendered by a court of this state issued for a violation of the provisions of this chapter, or to comply with a consent settlement approved by a court of this state concerning an alleged violation of this chapter, the attorney general may apply to the court:
      1. For the forfeiture of any charter rights, franchise privileges, or powers of the corporation held by the person under the laws of this state;
      2. For dissolution, if the person is a corporation or limited partnership organized under the laws of this state; or
      3. For the suspension of the privilege to conduct business within this state.
    2. The court, after giving due consideration to the public interest and to relevant competitive and economic circumstances, may grant so much of the requested relief as is deemed appropriate. Dissolution shall be conducted in accordance with the procedures specified by law for either voluntary or judicial dissolution of the particular type of corporation, association, firm, or partnership.
  1. If any corporation, association, partnership, or limited partnership shall be dissolved or have its privilege to transact business in this state suspended or revoked as provided in subsection (a) of this section, no assignee, transferee, or successor in interest of the corporation, association, partnership, or limited partnership shall be permitted to incorporate or to transact business in this state without first applying to the court for and receiving an order permitting incorporation or transaction of business. No order shall be granted unless the applicant proves to the satisfaction of the court that it will conduct its affairs in accordance with the provisions of this chapter.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-18. Acts of officers, directors, representatives, or agents acting within the scope of their authority.

  1. A corporation, association, firm, partnership, or limited partnership is liable for the acts of its officers, directors, representatives, or agents acting within the scope of their authority. Proof of the acts of any officer, director, representative, or agent shall be received as prima facie proof of the acts of the corporation, association, firm, partnership, or limited partnership itself.
  2. When a corporation, association, firm, partnership, or limited partnership violates this chapter, the violation shall be deemed to be that of the individual directors, members, officers, managers, employees, or agents of the corporation, association, firm, partnership, or limited partnership who knowingly authorized, ordered, aided, abetted, or advised in the acts or omissions constituting in whole or in part the violation, whether the individuals acted on their own behalf and for their own benefit, or for the corporation, association, firm, partnership, or limited partnership and in their representative capacity. The individuals, in their capacity as individuals, are subject to the provisions of this chapter and may be joined, if subject to personal jurisdiction, as additional parties defendant in the proceedings against the corporation, association, partnership, or limited partnership.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-19. Proof of conspiracy or combination.

In a prosecution under this chapter, it shall be sufficient to prove that a conspiracy or combination exists, and that the defendant or defendants belong to it or acted for or in connection with it, without proving all members belonging to it, or providing or producing any article or agreement or any written instrument on which it may be based, or that it was evidenced by any written instrument at all.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-20. Judgment in favor of state as prima facie evidence.

A final judgment or decree rendered in any civil or criminal proceeding under this chapter brought by or on behalf of the state of Rhode Island, any of its departments or agencies, or any of its political subdivisions to the effect that a defendant has violated this chapter shall be prima facie evidence against the defendant in any action or proceeding as to all matters respecting which the judgment or decree would be an estoppel as between the parties to it; provided, however, this section shall not apply to consent judgments or decrees entered before any testimony has been taken.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-21. Notification of civil action.

Upon commencement of any civil action by a person, other than the attorney general, for a violation of this chapter, the plaintiff shall mail a copy of the complaint to the attorney general and shall file proof of service on the attorney general with the court. The civil action may not proceed until the proof of service is filed.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-22. Promulgation of rules and regulations.

The attorney general shall, from time to time, promulgate rules and regulations prescribing procedures for the implementation and effectuation of his or her powers and authority under this chapter in accordance with chapter 35 of title 42.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-23. Limitation of actions.

Any action brought to enforce the provisions of this chapter shall be barred unless commenced within four (4) years after the cause of action arose, or if the cause of action is based upon a conspiracy in violation of this chapter, within four (4) years after the plaintiff discovered, or by the exercise of reasonable diligence should have discovered, the facts relied upon for proof of the conspiracy. No cause of action barred on July 1, 1979, shall be revived by this chapter. For purposes of this section, a cause of action for a continuing violation is deemed to arise at any time during the period of the violation.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Time when cause of action accrues for civil action under state antitrust, monopoly, or restraint of trade statutes. 90 A.L.R.4th 1102.

6-36-24. Suspension of limitation.

Whenever any civil or criminal proceedings shall be commenced by the state to prevent, restrain, or punish a violation of this chapter, the running of the statute of limitations in respect to every private right of action arising under this chapter and based in whole or in part on any matter complained of in the proceeding shall be suspended during the pendency of the action and for one year thereafter; provided, however, that whenever the running of the statute of limitations with respect to a cause of action arising under either § 6-36-10 or § 6-36-11 or both shall be suspended under this section, any action to enforce the section shall be forever barred unless commenced either within the period of suspension or within four (4) years after the cause of action accrued, whichever is later.

History of Section. P.L. 1979, ch. 98, § 1; P.L. 2014, ch. 528, § 26.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-36-25. Remedies cumulative.

The remedies provided in this chapter are cumulative of each other and of existing powers and remedies inherent in the court.

History of Section. P.L. 1979, ch. 98, § 1.

6-36-26. Severability.

If any provision or phrases of this chapter or applications of any provision or phrases of this chapter to any person or circumstances is held invalid, the invalidity shall not affect other provisions or phrases or applications of this chapter that can be given effect without the invalid provision or phrase or application, and to this end the provisions and phrases of this chapter are severable.

History of Section. P.L. 1979, ch. 98, § 1.

Chapter 37 Sale of Solid Fuel Burning Stoves, Furnaces, and Similar Appliances

6-37-1. Safety information required.

  1. Any person who sells at retail solid fuel burning stoves, furnaces, or similar appliances shall supply the purchaser with written information upon delivery concerning the safe installation and operation of the appliance. The information shall include, but not be limited to, the following:
    1. A statement informing the purchaser that a building permit is required to perform the installation;
    2. A statement indicating the installation shall conform to the provisions of the state building code and state fire safety code;
    3. The type of fuel to be burned in the appliance;
    4. Proper starting instructions;
    5. Proper storage of fuel;
    6. Safe disposal of ashes; and
    7. Proper chimney maintenance.
  2. The information required in subsections (a)(1) and (a)(2) shall be made available to the retailers by the state of Rhode Island.

History of Section. P.L. 1979, ch. 220, § 1.

Cross References.

Fire safety code, § 23-28.1-1 et seq.

State building code, § 23-27.3-100.1 et seq.

6-37-2. Penalty.

Any person who violates the provisions of this chapter shall be guilty of a misdemeanor.

History of Section. P.L. 1979, ch. 220, § 1.

Chapter 38 Insulation Contracts

6-38-1. Declaration of purpose.

Given increased public awareness in energy conservation and a concurrent increase in energy activity in the marketplace, the general assembly finds that to offer consumer protection to prospective purchasers of insulation products and of installation services of those products serves the public interest, and the general assembly further finds that the protection can be afforded by requiring that no insulation contractor shall install insulation in any existing residential, industrial, or commercial building without first providing the owner or lessee with a written contract which shall include, but not be limited to, the provisions of § 6-38-4 .

History of Section. P.L. 1980, ch. 194, § 1.

6-38-2. Definitions.

For the purpose of this chapter:

  1. “Degree of flammability” means the rating of fire retardation of insulation products.
  2. “Insulation” means any product made of either cellular, granular, fibrous, or formaldehyde-based or polyurethane-based material that, through gas-filled voids within these materials, is designed to retard the passage of heat through the ceiling, roof, walls, or floor of a structure.
  3. “Insulation contractor” means any individual, firm, partnership, corporation, company, association, or joint stock association that advertises itself as, solicits as, or holds itself to be one that is primarily engaged in the business of installing insulation and that has gross receipts for the installation of insulation of two thousand five hundred dollars ($2,500) or more for all labor, or four thousand five hundred dollars ($4,500) or more for all materials in any one calendar year.
  4. “Resistance factor” has the same meaning as “thermal resistance” as defined in the American Society of Heating, Refrigeration, and Air-conditioning Engineers (ASHRAE) Handbook of Fundamentals.
  5. “Vapor barrier” means any material specifically designed or intended for the purpose of restricting the passage of moisture through walls and ceilings and designed or intended to protect a structure against mildew, rot, peeling paints, and a breakdown of insulation.

History of Section. P.L. 1980, ch. 194, § 1; P.L. 2014, ch. 528, § 27.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-38-3. Contract requirements.

No insulation contractor shall install insulation in any existing residential, industrial, or commercial building without providing the owner or lessee, within a reasonable period of time prior to commencement of installation of insulation products, with a written contract. The contract, whether prepared by the contractor or on a form prepared by and available from the state of Rhode Island, shall clearly and conspicuously state, but not be limited to, the provisions of § 6-38-4 .

History of Section. P.L. 1980, ch. 194, § 1.

6-38-4. Contract provisions.

Contracts provided under the provisions of this chapter must include, but may not be limited to, the following:

  1. The type of insulation as defined in § 6-38-2 , the manufacturer, and the commercial brand name, if any. Under this provision, any insulation contractor intending to install a ureaformaldehyde insulation product must conspicuously include within any contract required under the provisions of this chapter the following notice in its entirety: “CAUTION: Under some conditions ureaformaldehyde insulation may cause the release of formaldehyde gas into living areas and the development of adverse health effects. Continued exposure to formaldehyde can cause nausea and vomiting, respiratory difficulties, headaches, eye irritation, and allergic reactions. The symptoms may develop anywhere from a few days to more than six (6) months after the gas is released. This notice of caution shall be acknowledged by the purchaser by signifying in an appropriate box that the purchaser has read and understands the nature and terms of the notice, provided, however, that the acknowledgment shall not constitute a waiver of any rights pursuant to the contract.”;
  2. The resistance factor of the insulation per product inch and the thickness in inches of the insulation to be installed;
  3. The degree of flammability of those properties. Under this provision, any insulation contractor intending to install a polyurethane-based insulation product must conspicuously include within any contract required under the provisions of this chapter the following notice in its entirety:

    “NOTICE In the event of fire, a urethane-based product, if burned, can emit a highly toxic and deadly gas.”;

  4. The area to be insulated as calculated in square feet, and a generic description of the area to be insulated, i.e., walls, roof, and/or floors;
  5. The method by which the insulation contractor intends to install the insulation;
  6. The type of ventilation to be installed in the insulated area. If no ventilation is to be installed, the contract must state this or must state that no ventilation is required and the reasons for the statement must be provided;
  7. The type of vapor barrier to be installed. If no vapor barrier is to be installed, the contract must state this or must state that no vapor barrier is required and the reasons for the statement must be provided;
  8. A guarantee against product settling or a statement as to the maximum percentage by which the insulation product can be expected to settle and over what period of time the settling can take place;
  9. A detailed description of structural changes required to install insulation and an estimate of the cost of those changes. If no structural changes are required, the contract must state this;
  10. A statement of the insulation contractor’s intent to complete all work necessary to restore the structure and surrounding area to its condition prior to commencement of installation of insulation;
  11. The provisions of all product and installer warranties; and
  12. The name, business address, and owner of the firm, partnership, corporation, company, association, or joint stock association providing the goods and services as described in the contract.

History of Section. P.L. 1980, ch. 194, § 1; P.L. 1981, ch. 273, § 1; P.L. 2014, ch. 528, § 27.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-38-5. Penalties.

Any individual, firm, partnership, corporation, company, association, or joint stock association which violates any provision of this chapter shall be subject to a penalty of not less than five hundred dollars ($500), nor more than one thousand dollars ($1,000), for each and every offense. In addition to the penalties provided in this section, any violation of this chapter shall constitute a violation of the Deceptive Trades Practices Act (chapter 13.1 of title 6).

History of Section. P.L. 1980, ch. 194, § 1.

6-38-6. Enforcement.

Responsibility for enforcement of the provisions of this chapter shall be in the department of the attorney general.

History of Section. P.L. 1980, ch. 194, § 1.

6-38-7. Subsequent occupant or purchaser — Availability of installation information.

In the event of the sale or rental of a single or multifamily dwelling for which the owner or lessor has installed ureaformaldehyde insulation, the owner or lessor, upon request of a prospective purchaser, lessee, or tenant, shall provide any available information relative to the installed insulation.

History of Section. P.L. 1981, ch. 273, § 1.

Chapter 39 Title to Dies, Molds, and Forms

6-39-1. Definitions.

For purposes of this chapter:

  1. “Customer” means any individual or entity:
    1. Who causes or caused a molder to fabricate, cast, or otherwise make a die, mold, or form; or
    2. Who causes or caused a molder to use a die, mold, or form to manufacture, assemble, or otherwise make a product or products.
  2. “Molder” means any individual or entity, including, but not limited to, a tool or die maker:
    1. Who fabricates, casts, or otherwise makes a die, mold, or form; or
    2. Who uses a die, mold, or form to manufacture, assemble, or otherwise make a product or products.

History of Section. P.L. 1981, ch. 341, § 1.

6-39-2. Provisions not applicable.

This chapter shall not apply where a molder retains title to and possession of a die, mold, or form. Nothing in this chapter shall be construed to grant a customer any rights, title, or interest to a die, mold, or form.

History of Section. P.L. 1981, ch. 341, § 1.

6-39-3. Title to dies, molds, or forms by operation of law.

  1. Unless otherwise agreed in writing, if a customer does not take possession from the molder of a die, mold, or form in this state within three (3) years following the last prior use of it, all of the customer’s rights, title, and interest to the die, mold, or form may be transferred by operation of law to the molder only for the purpose of destroying the die, mold, or form, consistent with this chapter.
  2. For purposes of this chapter, the phrase “within three (3) years following the last prior use” shall be construed to include any period following the last prior use of a die, mold, or form regardless of whether or not the period precedes November 21, 1981.

History of Section. P.L. 1981, ch. 341, § 1.

6-39-4. Notice required.

If a molder chooses to have all rights, title, and interest to any die, mold, or form transferred to the molder by operation of law, the molder shall send written notice by registered mail, return receipt requested, to the customer at the address, if any, indicated in the agreement pursuant to which the molder obtained possession of the die, mold, or form, and to the customer’s last known address, indicating that the molder intends to terminate all of the customer’s rights, title, and interest by having all rights, title, and interest transferred to the molder by operation of law pursuant to this chapter.

History of Section. P.L. 1981, ch. 341, § 1.

6-39-5. Molder’s rights following notice.

If a customer does not take possession of the particular die, mold, or form within one hundred twenty (120) days following the date the molder receives acknowledgment or non-acknowledgment of the return receipt of the notice, or does not make other contractual arrangements with the molder for taking possession or for the storage of it, all rights, title, and interest of the customer shall transfer by law to the molder only for the purpose of destroying the die, molds, or form consistent with this chapter. After this, the molder shall be entitled to destroy the particular die, mold, or form as the molder’s own property without any risk of liability to the customer, except that this chapter shall not be construed in any manner to affect the right of the customer under federal patent or copyright law, or any state or federal law, pertaining to unfair competition.

History of Section. P.L. 1981, ch. 341, § 1.

Chapter 40 Mail Order Sales

6-40-1. Short title.

This chapter may be cited as the “Mail Order Address Disclosure Act”.

History of Section. P.L. 1986, ch. 490, § 1.

6-40-2. Prohibitions.

It is unlawful in the sale of consumer goods or services for any person conducting a mail order or catalog business in this state, and utilizing a post office box address or a street address representing a site used primarily for the receipt or delivery of mail or as a telephone answering service, to fail to disclose the legal name under which business is done and the complete street address from which business is actually conducted in all advertising and promotional materials, including order blanks and forms.

History of Section. P.L. 1986, ch. 490, § 1.

6-40-3. Penalty.

Any person who violates the provisions of this chapter shall be deemed to have committed a deceptive trade practice and is subject to the penalty set forth in § 6-13.1-14 .

History of Section. P.L. 1986, ch. 490, § 1.

Chapter 41 Uniform Trade Secrets Act

6-41-1. Definitions.

As used in this chapter, unless the context requires otherwise:

  1. “Improper means” includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means;
  2. “Misappropriation” means:
    1. Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
    2. Disclosure or use of a trade secret of another without express or implied consent by a person who:
      1. Used improper means to acquire knowledge of the trade secret; or
      2. At the time of disclosure or use, knew or had reason to know, that his or her knowledge of the trade secret was:
        1. Derived from or through a person who had utilized improper means to acquire it;
        2. Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
        3. Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
      3. Before a material change of his or her position, knew or had reason to know, that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
  3. “Person” means a natural person, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.
  4. “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
    1. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
    2. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

History of Section. P.L. 1986, ch. 439, § 1; P.L. 2014, ch. 528, § 28.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Law Reviews.

2001 Survey of Rhode Island Law, see 7 Roger Williams U.L. Rev. 403 (2002).

NOTES TO DECISIONS

In General.

Applying Rhode Island choice of law principles in a diversity case, with no choice of law provision in a non-compete agreement, Rhode Island law applied under the interest weighing test and as the place of contract. While Connecticut had a relationship to the case because of the employee’s customer base, it did not have the most significant interest, outweighing Rhode Island; the employer could maintain, then, its Rhode Island trade secret claim pursuant to R.I. Gen. Laws § 6-41-1 et seq., but its unfair practices claim under Conn. Gen. Stat. § 42-110a et seq. was dismissed. R.J. Carbone Co. v. Regan, 582 F. Supp. 2d 220, 2008 U.S. Dist. LEXIS 81996 (D.R.I. 2008).

Misappropriation.

Company knew or had reason to know that it received the defense research firm’s trade secrets by the sale and transfer of certain assets; thus, there were sufficient allegations of misappropriation of trade secrets to withstand a motion for judgment on the pleadings. Magnum Def., Inc. v. Harbour Group, Ltd., 248 F. Supp. 2d 64, 2003 U.S. Dist. LEXIS 3714 (D.R.I. 2003).

Definition of “misappropriation” under R.I. Gen. Laws § 6-41-1 (2) of the Rhode Island Trade Secrets Act, R.I. Gen. Laws § 6-41-1 - et seq., included disclosure of a trade secret by one who acquired it while under a duty to maintain its secrecy and the acquisition of a trade secret by one who knew that it was acquired by breach of a duty to maintain secrecy; contrary to defendant competitor and former employee’s assertion, plaintiff former employer did not need to show that either the former employee or the competitor “used” plaintiff’s trade secrets. Disclosure or acquisition was sufficient to constitute misappropriation, subjecting defendants to liability for actual loss and unjust enrichment caused by the misappropriation pursuant to R.I. Gen. Laws § 6-41-3(a) . Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 2009 U.S. App. LEXIS 23298 (1st Cir. 2009).

Trade Secret.

Where a seller’s employee, who was responsible for assisting independent distributors in selling the seller’s prepaid phone cards, alerted the seller’s in-house direct sales manager that a distributor was close to a deal to sell cards to a major drug store chain, and detailed the information that the chain was seeking from the distributor, the information at issue did not constitute trade secrets because it was obtainable within normal business channels had the seller sought to do so. APG, Inc. v. MCI Telecomms. Corp., 436 F.3d 294, 2006 U.S. App. LEXIS 3018 (1st Cir. 2006).

Collateral References.

Actions Under Defend Trade Secrets Act, 18 U.S.C. § 1836. 30 A.L.R. Fed. 3d Art. 9 (2018).

Disclosure of trade secret as abandonment of secrecy, generally. 92 A.L.R.3d 138.

Disclosure of trade secret in court proceedings as abandonment of secrecy. 58 A.L.R.3d 1318.

Discovery of trade secret in state court action. 75 A.L.R.4th 1009.

Implied obligation not to use trade secrets or similar confidential information disclosed during unsuccessful negotiations for sale, license, or the like. 9 A.L.R.3d 665.

In camera trial or hearing and other procedures to safeguard trade secret or the like against undue disclosure in course of civil action involving such secret. 62 A.L.R.2d 509.

Proper measure and elements of damages for misappropriation of trade secrets. 11 A.L.R.4th 12.

Right of employee who has wrongfully appropriated trade secrets, in accounting for profits, to set off losses. 67 A.L.R.2d 825.

Uniform Trade Secrets Act (UTSA) as Preempting Civil Action Not Sounding in Contract and Based on Misappropriation of Confidential Information Other than Trade Secret, and UTSA as Precluding Plaintiff’s Assertion that Claim Does Not Constitute Trade Secret in Order to Circumvent Preemption Bar. 29 A.L.R.7th Art. 4 (2018).

What constitutes “trade secrets and commercial or financial information obtained from person and privileged or confidential”, exempt from disclosure under Freedom of Information Act (5 USCS § 552(b)(4)) (FOIA). 139 A.L.R. Fed. 225.

What constitutes “trade secrets” exempt from disclosure. 27 A.L.R.4th 773; 21 ALR Fed 224.

What is computer “trade secret” under state law. 53 A.L.R.4th 1046.

What is “trade secret” so as to render actionable under state law its use or disclosure by former employee. 59 A.L.R.4th 641.

6-41-2. Injunctive relief.

  1. Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.
  2. In exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time for which the use could have been prohibited. Exceptional circumstances include, but are not limited to, a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation that renders a prohibitive injunction inequitable.
  3. In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.

History of Section. P.L. 1986, ch. 439, § 1.

NOTES TO DECISIONS

In General.

Applying Rhode Island choice of law principles in a diversity case, with no choice of law provision in a non-compete agreement, Rhode Island law applied under the interest weighing test and as the place of contract. While Connecticut had a relationship to the case because of the employee’s customer base, it did not have the most significant interest, outweighing Rhode Island; the employer could maintain, then, its Rhode Island trade secret claim pursuant to R.I. Gen. Laws § 6-41-1 et seq., but its unfair practices claim under Conn. Gen. Stat. § 42-110a et seq. was dismissed. R.J. Carbone Co. v. Regan, 582 F. Supp. 2d 220, 2008 U.S. Dist. LEXIS 81996 (D.R.I. 2008).

Collateral References.

Applicability of Inevitable Disclosure Doctrine Barring Employment of Competitor’s Former Employee. 36 A.L.R.6th 537.

6-41-3. Damages.

  1. Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation. Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss. In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator’s unauthorized disclosure or use of a trade secret.
  2. If willful and malicious misappropriation exists, the court may award exemplary damages in an amount not exceeding twice an award made under subsection (a).

History of Section. P.L. 1986, ch. 439, § 1.

NOTES TO DECISIONS

In General.

Applying Rhode Island choice of law principles in a diversity case, with no choice of law provision in a non-compete agreement, Rhode Island law applied under the interest weighing test and as the place of contract. While Connecticut had a relationship to the case because of the employee’s customer base, it did not have the most significant interest, outweighing Rhode Island; the employer could maintain, then, its Rhode Island trade secret claim pursuant to R.I. Gen. Laws § 6-41-1 et seq., but its unfair practices claim under Conn. Gen. Stat. § 42-110a et seq. was dismissed. R.J. Carbone Co. v. Regan, 582 F. Supp. 2d 220, 2008 U.S. Dist. LEXIS 81996 (D.R.I. 2008).

Liability.

Definition of “misappropriation” under R.I. Gen. Laws § 6-41-1 (2) of the Rhode Island Trade Secrets Act, R.I. Gen. Laws § 6-41-1 - et seq., included disclosure of a trade secret by one who acquired it while under a duty to maintain its secrecy and the acquisition of a trade secret by one who knew that it was acquired by breach of a duty to maintain secrecy; contrary to defendant competitor and former employee’s assertion, plaintiff former employer did not need to show shown that either the former employee or the competitor “used” plaintiff’s trade secrets. Disclosure or acquisition was sufficient to constitute misappropriation, subjecting defendants to liability for actual loss and unjust enrichment caused by the misappropriation pursuant to R.I. Gen. Laws § 6-41-3(a) . Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 2009 U.S. App. LEXIS 23298 (1st Cir. 2009).

Punitive Damages.

Corporation introduced evidence that the company and the employee misappropriated the corporation’s confidential customer lists and information about those customers, such as pricing strategies, which aided the company and the employee in making sales to those customers, and the corporation also provided evidence that industry gross profit margins ranged from 35-60 percent and taking the low end of that range, 35 percent, from the putative total sales loss of $ 1,008,921 made a profit loss of $ 353,122. In concurrence with the jury’s finding, the court found that the misappropriation was unquestionably willful and malicious, and therefore, the maximum exemplary damages award was appropriate to deter and punish such behavior and the corporation was awarded $ 560,000 in exemplary damages under the Rhode Island Trade Secrets Act, R.I. Gen. Laws § 6-41-3(b) . Astro-Med, Inc. v. Plant, 2008 U.S. Dist. LEXIS 56498 (D.R.I. July 25, 2008), aff'd, 591 F.3d 1, 2009 U.S. App. LEXIS 23298 (1st Cir. 2009).

Collateral References.

Proper Measure and Elements of Damages for Misappropriation of Trade Secret — Royalties. 28 A.L.R.7th Art. 6 (2018).

6-41-4. Attorney’s fees.

If: (a) a claim of misappropriation is made in bad faith; or (b) a motion to terminate an injunction is made or resisted in bad faith; or (c) willful and malicious misappropriation exists, the court may award reasonable attorney’s fees to the prevailing party.

History of Section. P.L. 1986, ch. 439, § 1; P.L. 2014, ch. 528, § 28.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Awards.

Court awarded reasonable attorney’s fees in the amount of $209,911.85 to the corproation under R.I. Gen. Laws § 6-41-4(c) because the jury’s finding of willful and malicious misappropriation of trade secrets was supported by substantial evidence and although the attorney’s fees were higher than in similar cases of the same nature, much of the additional costs could have been attributed to the company and the employee’s needless complication of the issues. Astro-Med, Inc. v. Plant, 2008 U.S. Dist. LEXIS 56498 (D.R.I. July 25, 2008), aff'd, 591 F.3d 1, 2009 U.S. App. LEXIS 23298 (1st Cir. 2009).

Under Rhode Island law, costs were allowed only by statute or contract and therefore, the court awarded the non-taxable costs in the amount of $11,844.37 only against the employee in his individual capacity for the breachof contract and not against the company and the employee jointly and severally pursuant to R.I. Gen. Laws § 6-41-4 . Astro-Med, Inc. v. Plant, 2008 U.S. Dist. LEXIS 56498 (D.R.I. July 25, 2008), aff'd, 591 F.3d 1, 2009 U.S. App. LEXIS 23298 (1st Cir. 2009).

Bad Faith Required.

A court must find subjective bad faith before it can impose sanctions under the Uniform Trade Secrets Act, although a court may rely on circumstantial evidence to find that bad faith. Russo v. Baxter Healthcare Corp., 51 F. Supp. 2d 70, 1999 U.S. Dist. LEXIS 8128 (D.R.I. 1999).

Where the plaintiff’s claim suffered from numerous flaws, but those were unclear until live witnesses were subjected to direct and cross-examination, his claim was made in good faith, he was entitled to have the court evaluate his claims, and he was not liable for attorney fees. Russo v. Baxter Healthcare Corp., 51 F. Supp. 2d 70, 1999 U.S. Dist. LEXIS 8128 (D.R.I. 1999).

6-41-5. Preservation of secrecy.

In an action under this chapter, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.

History of Section. P.L. 1986, ch. 439, § 1.

Collateral References.

What constitutes “trade secrets and commercial or financial information obtained from person and privileged or confidential”, exempt from disclosure under Freedom of Information Act (5 USCS § 552(b)(4)) (FOIA). 139 A.L.R. Fed. 225.

6-41-6. Statute of limitations.

An action for misappropriation must be brought within three (3) years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim.

History of Section. P.L. 1986, ch. 439, § 1.

Law Reviews.

2004 Survey of Rhode Island Law: Case: Tort Law/Contract Law, see 10 Roger Williams U. L. Rev. 927 (2005).

NOTES TO DECISIONS

In General.

In a suit brought by a decedent’s widow and daughter alleging that entertainment companies misappropriated the decedent’s theme park idea in 1962 and opened an identical theme park to the public in 1982, plaintiffs’ misappropriation claim was time-barred and the companies did not conceal a cause of action from plaintiffs or the decedent. Waters v. Walt Disney World Co., 237 F. Supp. 2d 162, 2002 U.S. Dist. LEXIS 26235 (D.R.I. 2002).

In an action under the Rhode Island Uniform Trade Secrets Act, R.I. Gen. Laws § 6-41-1 et seq., as the injured party’s claim was properly found to be time-barred under the three-year statute of limitations under R.I. Gen. Laws § 6-41-6 ; as a result of a deposition in another lawsuit, the injured party became aware that the bank had used confidential information for comparison with a competitor for the competitor’s loan application, and the injured party failed to file a lawsuit until more than three years later. Read & Lundy, Inc. v. Wash. Trust Co., 840 A.2d 1099, 2004 R.I. LEXIS 4 (2004).

6-41-7. Effect on other law.

  1. Except as provided in subsection (b) of this section, this chapter displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret.
  2. This chapter does not affect:
    1. Contractual remedies, whether or not based upon misappropriation of a trade secret;
    2. Other civil remedies that are not based upon misappropriation of a trade secret; or
    3. Criminal remedies, whether or not based upon misappropriation of a trade secret.

History of Section. P.L. 1986, ch. 439, § 1.

6-41-8. Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

History of Section. P.L. 1986, ch. 439, § 1.

6-41-9. Short title.

This chapter may be cited as the “Uniform Trade Secrets Act”.

History of Section. P.L. 1986, ch. 439, § 1.

6-41-10. Severability.

If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of the chapter that can be given effect without the invalid provision or application and to this end the provisions of this chapter are severable.

History of Section. P.L. 1986, ch. 439, § 1; P.L. 2014, ch. 528, § 28.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-41-11. Time of taking effect.

This chapter takes effect on July 1, 1986, and does not apply to misappropriation occurring prior to July 1, 1986. With respect to a continuing misappropriation that began prior to July 1, 1986, the chapter also does not apply to the continuing misappropriation that occurs after July 1, 1986.

History of Section. P.L. 1986, ch. 439, § 1.

Chapter 41.1 Patent Infringement

6-41.1-1. Legislative findings and statement of purpose.

  1. Rhode Island is striving to build an entrepreneurial- and knowledge-based economy. Attracting and nurturing internet technology (“IT”) and other knowledge-based companies is an important part of this effort and will be beneficial to Rhode Island’s future.
  2. Patents are essential to encouraging innovation, especially in the IT- and knowledge-based fields. The protections afforded by the federal patent system create an incentive to invest in research and innovation, which spurs economic growth. Patent holders have every right to enforce their patents when they are infringed, and patent enforcement litigation is necessary to protect intellectual property.
  3. The general assembly does not wish to interfere with the good-faith enforcement of patents or good-faith patent litigation. The general assembly also recognizes that Rhode Island is preempted from passing any law that conflicts with federal patent law.
  4. Patent litigation can be technical, complex, and expensive. The expense of patent litigation, which may cost hundreds of thousands of dollars or more, can be a significant burden on small- and medium-size companies. Rhode Island wishes to help its businesses avoid these costs by encouraging the most efficient resolution of patent-infringement claims without conflicting with federal law.
  5. In order for Rhode Island companies to be able to respond promptly and efficiently to patent infringement assertions against them, it is necessary that they receive specific information regarding how their product, service, or technology may have infringed the patent at issue. Receiving such information at an early stage will facilitate the resolution of claims and lessen the burden of potential litigation on Rhode Island companies.
  6. Abusive patent litigation, and especially the assertion of bad-faith infringement claims, can harm Rhode Island companies. A business that receives a letter asserting such claims faces the threat of expensive and protracted litigation and may feel that it has no choice but to settle and to pay a licensing fee, even if the claim is meritless. This is especially so for companies and nonprofits that lack the resources to investigate and defend themselves against infringement claims.
  7. Not only do bad-faith patent infringement claims impose a significant burden on individual Rhode Island businesses, these claims also undermine Rhode Island’s efforts to attract and nurture other knowledge-based companies. Funds used to avoid the threat of bad-faith litigation are no longer available to invest, produce new products, expand, or hire new workers, thereby harming Rhode Island’s economy.
  8. Through this narrowly focused act, the general assembly seeks to facilitate the efficient and prompt resolution of patent-infringement claims; protect Rhode Island businesses from abusive and bad-faith assertions of patent infringement; and build Rhode Island’s economy, while at the same time respecting federal law and being careful to not interfere with legitimate patent-enforcement actions.

History of Section. P.L. 2016, ch. 74, § 1; P.L. 2016, ch. 76, § 1.

Compiler’s Notes.

P.L. 2016, ch. 74, § 1, and P.L. 2016, ch. 76, § 1 enacted identical versions of this chapter.

6-41.1-2. Definitions.

As used in this chapter:

  1. “Demand letter” means a letter, e-mail, or other communication asserting or claiming that the target has engaged in patent infringement;
  2. “Person” means any natural person or the estate of any natural person, or trust or association of persons, whether formal or otherwise, or any corporation, partnership, company, or any other legal or commercial entity;
  3. “Target” means a person doing business in Rhode Island:
    1. Who has received a demand letter or against whom an assertion or allegation of patent infringement has been made;
    2. Who has been threatened with litigation or against whom a lawsuit has been filed alleging patent infringement; or
    3. Whose customers have received a demand letter asserting that the person’s product, service, or technology has infringed upon a patent.

History of Section. P.L. 2016, ch. 74, § 1; P.L. 2016, ch. 76, § 1.

6-41.1-3. Bad-faith assertions of patent infringement.

  1. A person shall not make a bad-faith assertion of patent infringement.
  2. A court may consider the following factors as evidence that a person has made a bad-faith assertion of patent infringement:
    1. The demand letter does not contain the following information:
      1. The patent number;
      2. The name and address of the patent owner or owners and assignee or assignees, if any; and
      3. Factual allegations concerning the specific areas in which the target’s products, services, and technology infringe the patent or are covered by the claims in the patent.
    2. Prior to sending the demand letter, the person fails to conduct an analysis comparing the claims in the patent to the target’s products, services, and technology, or such an analysis was done but does not identify specific areas in which the products, services, and technology are covered by the claims in the patent.
    3. The demand letter lacks the information described in subsection (b)(1); the target requests the information; and the person fails to provide the information within a reasonable period of time.
    4. The demand letter demands payment of a license fee or response within an unreasonably short period of time.
    5. The person offers to license the patent for an amount that is not based on a reasonable estimate of the value of the license.
    6. The claim or assertion of patent infringement is meritless, and the person knew, or should have known, that the claim or assertion is meritless.
    7. The claim or assertion of patent infringement is deceptive.
    8. The person or its subsidiaries or affiliates have previously filed or threatened to file one or more lawsuits based on the same or similar claim of patent infringement and:
      1. Those threats or lawsuits lacked the information described in subsection (b)(1); or
      2. The person attempted to enforce the claim of patent infringement in litigation and a court found the claim to be meritless.
    9. Any other factor the court finds relevant.
  3. A court may consider the following factors as evidence that a person has not made a bad-faith assertion of patent infringement:
    1. The demand letter contains the information described in subsection (b)(1).
    2. Where the demand letter lacks the information described in subsection (b)(1) and the target requests the information, the person provides the information within a reasonable period of time.
    3. The person engages in a good-faith effort to establish that the target has infringed upon the patent and to negotiate an appropriate remedy.
    4. The person makes a substantial investment in the use of the patent or in the production or sale of a product or item covered by the patent.
    5. The person is:
      1. The inventor or joint inventor of the patent or, in the case of a patent filed by and awarded to an assignee of the original inventor or joint inventor, is the original assignee; or
      2. An institution of higher education or a technology transfer organization owned or affiliated with an institution of higher education.
    6. The person has:
      1. Demonstrated good-faith business practices in previous efforts to enforce the patent, or a substantially similar patent; or
      2. Successfully enforced the patent, or a substantially similar patent, through litigation.
    7. Any other factor the court finds relevant.

History of Section. P.L. 2016, ch. 74, § 1; P.L. 2016, ch. 76, § 1.

6-41.1-4. Exemptions.

A demand letter or assertion of patent infringement that includes a claim for relief under 35 U.S.C. § 271(e)(2) shall not be subject to the provisions of this chapter.

History of Section. P.L. 2016, ch. 74, § 1; P.L. 2016, ch. 76, § 1.

6-41.1-5. Bond.

Upon motion by a target and a finding by the court that a target has established a reasonable likelihood that a person has made a bad-faith assertion of patent infringement in violation of this chapter, the court shall require the person to post a bond in an amount equal to a good-faith estimate of the target’s costs to litigate the claim and amounts reasonably likely to be recovered under § 6-41.1-6(b) , conditioned upon payment of any amounts finally determined to be due to the target. A hearing shall be held if either party so requests. A bond ordered pursuant to this section shall not exceed five hundred thousand dollars ($500,000). The court may waive the bond requirement if it finds the person has available assets equal to the amount of the proposed bond or for other good cause shown.

History of Section. P.L. 2016, ch. 74, § 1; P.L. 2016, ch. 76, § 1.

6-41.1-6. Enforcement, remedies, and damages.

  1. The attorney general shall have the same authority under this chapter to conduct civil investigations, bring civil actions, and enter into assurances of discontinuances pursuant to chapter 36 of title 6 “antitrust law” or assurances of voluntary compliance pursuant to chapter 13.1 of title 6 “deceptive trade practices.” In an action brought by the attorney general under this chapter, the court may award or impose any relief available pursuant to the provisions of chapter 36 of title 6 entitled “antitrust law” and pursuant to the provisions of chapter 13.1 of title 6 entitled “deceptive trade practices.”
  2. A target of conduct involving assertions of patent infringement or a person aggrieved by a violation of this chapter may bring an action in superior court. A court may award the following remedies to a plaintiff who prevails in an action brought pursuant to this subsection:
    1. Equitable relief;
    2. Actual damages;
    3. Costs and fees, including reasonable attorney’s fees; and
    4. Exemplary damages in an amount equal to fifty thousand dollars ($50,000) or three (3) times the total of actual damages, costs, and fees, whichever is greater.
  3. This chapter shall not be construed to limit the rights and remedies available to the state of Rhode Island or to any person under any other law and shall not alter or restrict the attorney general’s authority under chapter 36 of title 6 entitled “antitrust law” or chapter 13.1 of title 6 entitled “deceptive trade practices” with regard to conduct involving assertions of patent infringement.

History of Section. P.L. 2016, ch. 74, § 1; P.L. 2016, ch. 76, § 1.

Collateral References.

Inequitable conduct as equitable defense to patent infringement. 15 A.L.R. Fed. 3d Art. 7 (2016).

Standing of licensee to bring patent infringement action. 14 A.L.R. Fed. 3d Art. 11 (2016).

Chapter 42 Checks and Other Instruments — Dishonor

6-42-1. Notice of dishonor.

When a check, draft, or other instrument has been dishonored by nonacceptance or nonpayment by any bank or other financial institution and has not been paid within ten (10) days, the holder to whom the check, draft, or other instrument was issued may send a notice of dishonor to the maker or drawer as provided in § 6-42-2 .

History of Section. P.L. 1988, ch. 93, § 1.

6-42-2. Term of notes — Form of notice of dishonor.

  1. A notice of dishonor sent by a holder to a maker or drawer pursuant to § 6-42-1 shall substantially comply with the following form:
  2. The notice provided for in subsection (a) shall be sent certified mail, return receipt requested, or by regular mail when such mailing is supported by an affidavit of service by mail.

NOTICE OF DISHONORED CHECK DATE NAME OF ISSUER STREET ADDRESS CITY AND STATE You are according to law hereby notified that a check or instrument numbered and dated 20, drawn on (bank or other financial institution) of , in the amount of has been returned unpaid with the notation that the payment has been refused because of rule. Within thirty (30) days from the mailing of this notice, you must pay or tender to (holder) at sufficient money to pay the check (address of holder) draft or instrument in full. If payment of the above amount is not made within thirty (30) days of the mailing of this notice of dishonor, you may be liable under , in addition to the amount of the check, draft, or other instrument, and a collection fee of twenty-five dollars ($25.00), for an amount of up to three (3) times the amount of the check, draft, or other instrument, but in no case less than two hundred dollars ($200) and not more than one thousand dollars ($1,000). § 6-42-3 (signature of holder)

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History of Section. P.L. 1988, ch. 93, § 1; P.L. 2003, ch. 211, § 1; P.L. 2003, ch. 228, § 1; P.L. 2014, ch. 528, § 29.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-42-3. Cause of action — Damages.

  1. If a check, draft, or other instrument has not been paid within thirty (30) days after the holder has sent a notice of dishonor to the maker or drawer of a check, draft, or other instrument that has been dishonored, pursuant to §§ 6-42-1 and 6-42-2 , the holder may seek the damages provided under this section in the district court and may at the holder’s election be in accordance with the procedure for small claims set forth in chapter 16 of title 10.
  2. The maker or drawer of a dishonored check or other instrument who fails to pay the amount demanded within thirty (30) days of the mailing of the notice of dishonor shall be liable to the holder for:
    1. The amount of the check or other instrument;
    2. A collection fee of twenty-five dollars ($25.00);
    3. An amount equal to three (3) times the amount of the check or instrument, but in no case less than two hundred dollars ($200) and in no case more than one thousand dollars ($1,000).

History of Section. P.L. 1988, ch. 93, § 1.

NOTES TO DECISIONS

Dishonor.

Trial justice did not overlook material evidence in ruling that a car mechanic was entitled to judgment under R.I. Gen. Laws § 6-42-3 because a customer dishonored a $200 check without a justifiable reason after the mechanic installed a starter repeatedly in the customer’s car as the customer asked. Almesallmy v. Lapinski, 981 A.2d 1025, 2009 R.I. LEXIS 115 (2009).

6-42-4. Defenses to action.

It shall be a defense to any action commenced by the holder of a dishonored check or other instrument under § 6-42-3 that:

  1. The dishonor of the check or other instrument was due to a justifiable stop payment order or to the attachment of the account; or
  2. Within thirty (30) days from the mailing of the notice of dishonor, the maker or drawer has paid to the holder the full amount of the check or other instrument.

History of Section. P.L. 1988, ch. 93, § 1.

Chapter 43 Regulation of the Rental of Video Recordings to Minors

6-43-1. Regulation of rentals to minors.

  1. No person, firm, or corporation, engaged in the business of the rental of video cassette recordings shall rent a recording that has been labeled, advertised, or otherwise held out to be “X”, “XX”, or “XXX” to any person who is under the age of eighteen (18). The use of the designation “X”, “XX”, or “XXX” on a video cassette recording or its packaging shall constitute the labeling and advertisement for purposes of this chapter.
  2. If the person, firm, or corporation renting a video cassette recording is in doubt as to the age of any person seeking to rent a recording that has been labeled, advertised, or otherwise held out to be “X”, “XX”, or “XXX”, demand may be made that the person produce any of the following documents: (1) A birth certificate; (2) A baptismal certificate; (3) An armed services identification card; (4) A Rhode Island motor vehicle operator’s license; or (5) A Rhode Island identification card; and may require that any person who has shown a document as set forth in this section substantiating his or her age sign his or her name in a book kept for this purpose indicating which document was presented. If a person whose age is questioned shall sign the book before he or she rents a video cassette recording, and it is later determined that the person was not over eighteen (18) years of age, it shall be considered prima facie evidence that the person, firm, or corporation renting the recording acted in good faith in renting to the person.
  3. Nothing contained in this chapter shall be construed as adopting, incorporating, or referring to the motion picture rating system of the motion picture association of America or of any other private or public organization.

History of Section. P.L. 1988, ch. 559, § 1; P.L. 2014, ch. 528, § 30.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-43-2. Penalty for violations.

Any person who violates the provisions of this chapter shall be guilty of a misdemeanor.

History of Section. P.L. 1988, ch. 559, § 1.

Chapter 44 Rental Purchase Agreements

6-44-1. Short title.

This chapter shall be known as “The Rhode Island Rental Purchase Agreement Act.”

History of Section. P.L. 1989, ch. 481, § 1.

6-44-2. Definitions.

For the purposes of this chapter:

  1. “Lessee” means an individual who leases personal property under a rental purchase agreement.
  2. “Lessor” means a person who, in the ordinary course of business, regularly leases, offers to lease, or acts as an agent for the leasing of property under a rental purchase agreement.
  3. “Property” means the personal property that is the subject of a rental purchase agreement.
  4. “Rental purchase agreement” means an agreement for the use of property by a lessee for personal, family, or household purposes, for an initial period of four (4) months or less, that is automatically renewable with each payment after the initial period and that permits, but does not obligate, the lessee to become the owner of the property.
  5. An agreement that complies with this chapter shall not be construed as, nor be governed by, the laws relating to:
    1. “Credit” as defined in § 6-27-3(1) ;
    2. A “home solicitation sale” as defined in § 6-28-2 ; or
    3. A “security interest” as defined in § 6A-1-201(35).

History of Section. P.L. 1989, ch. 481, § 1.

6-44-3. General requirements of disclosure.

  1. Each lessor shall give to the lessee, prior to the execution of the lease, a dated, written statement on which the lessor and lessee are identified setting out accurately and in a clear and conspicuous manner the following information with respect to the lease, as applicable:
    1. A brief description or identification of the leased property, including whether the property is new or used;
    2. The amount of any payment required by the lessee at or before the execution of the lease;
    3. The amount paid or payable by the lessee for fees or taxes;
    4. The amount and description of other charges payable by the lessee and not included in the periodic payments;
    5. A statement of the amount or method of determining the amount of any liabilities the lease imposes upon the lessee at the end of the term of the lease; whether or not the lessee has the option to purchase the leased property and the price at which the leased property may be purchased at the end of the lease; and the method of determining the early purchase option price at any point in time;
    6. A statement identifying all express warranties and guarantees made by the manufacturer or lessor with respect to the leased property and identifying the party responsible for maintaining or servicing the leased property together with a description of the responsibility;
    7. A brief description of insurance provided or paid for by the lessor or required of the lessee, including the types and amount of the coverages and costs;
    8. The number, amount, and due dates or periods of payments under the lease and the total amount of the periodic payments; and
    9. A statement of the conditions under which the lessee or lessor may terminate the lease prior to the end of the term or that no right to terminate exists and the amount or method of determining the amount of any penalty or other charge for delinquency, default, late payments, or early termination.
  2. The disclosures required under this section may be made in the lease contract to be signed by the lessee or may be made in a separate, written document that shall be attached to the lease contract. Any of the information required to be disclosed under this section may be given in the form of estimates where the lessor is not in a position to know the exact information.

History of Section. P.L. 1989, ch. 481, § 1; P.L. 2014, ch. 528, § 31.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-44-4. Prohibited provisions.

A rental purchase agreement may not contain a provision:

  1. Requiring a confession of judgment;
  2. Authorizing a lessor or an agent of the lessor to commit a breach of the peace in the repossession of property; or
  3. Waiving a defense counterclaim or right the lessee may have against the lessor or an agent of the lessor.

History of Section. P.L. 1989, ch. 481, § 1.

6-44-5. Reinstatement.

  1. A lessee who fails to make timely lease payments has the right to reinstate the original rental purchase agreement without losing any rights or options previously acquired under the rental purchase agreement within three (3) lease terms after the expiration of the last lease term for which the lessee made a timely payment if the lessee surrenders the leased property to the lessor when the lessor or its agent requests him or her to surrender the leased property.
  2. Before reinstating a rental purchase agreement, a lessor may require a lessee to pay any unpaid lease payments; delinquency charges; a reasonable reinstatement fee of not more than five dollars ($5.00); and a delivery charge if redelivery of the leased property is necessary.
  3. If reinstatement occurs pursuant to this section, the lessor shall provide the lessee with either the same property leased by the lessee prior to reinstatement or substitute property that is of comparable quality and condition. If substitute property is provided, the lessor shall provide the lessee with all of the disclosures required by § 6-44-3 of this chapter.

History of Section. P.L. 1989, ch. 481, § 1; P.L. 2014, ch. 528, § 31.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-44-6. Early purchase option.

A rental purchase agreement must provide that, at any time after the initial payment, the lessee may acquire ownership of the property by complying with the terms of an early purchase option that must be clearly set forth in the rental purchase agreement.

History of Section. P.L. 1989, ch. 481, § 1; P.L. 2014, ch. 528, § 31.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-44-7. Exempted transactions.

This chapter does not apply to:

  1. Agreements for the rental of property in which the person who rents the property has no legal right to become the owner of the property at the end of the rental period;
  2. A lease of a safe deposit box;
  3. Commercial leases or leases entered into by an organization;
  4. Any telecommunication equipment leases or rental agreements; or
  5. Any automobile, truck, or any other vehicular and automotive equipment leases or rental agreement.

History of Section. P.L. 1989, ch. 481, § 1.

6-44-8. Advertisements.

  1. If an advertisement for a rental purchase agreement states the amount of any payment or states that any or no initial payment is required, the advertisement shall also clearly and conspicuously state the following items as applicable:
    1. That the transaction advertised is a lease;
    2. The total of initial payments required at or before execution of the lease or delivery of the property, whichever is later;
    3. That a security deposit is required if applicable;
    4. The number, amounts, and timing of scheduled payments; and
    5. For a lease in which the liability of the lessee at the end of the lease term is based on the anticipated residual value of the property, that an extra charge may be imposed at the end of the lease term.
  2. If an advertisement for a consumer lease refers to or states the amount of any payment and that the lessee has the right to acquire ownership of any particular item, the advertisement shall further clearly and conspicuously state the following items as applicable:
    1. The total of payments necessary to acquire ownership, if ownership is acquired through the accumulation of periodic payments; the price at which the leased property may be purchased at the end of the lease; and the method of determining the purchase price at any point in time if acquired through the exercise of the early option to purchase; and
    2. That the consumer lessee acquires no ownership right if the total amount necessary to acquire ownership is not paid or the option to purchase is not exercised by payment of the purchase price.
  3. Any owner or the agents or employees of any owner of any medium in which an advertisement appears or through which it is disseminated shall not be liable under this section.

History of Section. P.L. 1989, ch. 481, § 1; P.L. 2014, ch. 528, § 31.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-44-9. Enforcement.

  1. A lessee who has suffered a loss due to a violation of this chapter by a lessor is entitled to recover from the lessor actual damages, reasonable attorney’s fees, and court costs.
  2. A lessor shall not be held liable in any action brought under this section if he or she shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adopted to avoid any error. A bona fide error shall include, but shall not be limited to, clerical, calculation, computer malfunction, and programming and printing errors; provided that an error of legal judgment with respect to a person’s obligations under this chapter shall not be a bona fide error.
  3. A lessor shall not be deemed liable under this chapter for a violation of the provisions of § 6-44-3 if, within sixty (60) days after discovering the error and before an action is filed in accordance with the provisions of this section or written notice of the error is received from the consumer, the lessor notifies the consumer of the error and makes whatever adjustments in the account necessary to assure that the consumer shall not be required to pay an amount in excess of the amounts actually disclosed. This provision shall apply whether the discovery of the error was made through the lessor’s own procedures or otherwise.
  4. An action shall not be brought under this chapter more than one year after the occurrence of the act, method, or practice that is the subject of the action, or more than one year after the last payment in a transaction involving the method, act, or practice that is the subject of the action, whichever is later.

History of Section. P.L. 1989, ch. 481, § 1; P.L. 2014, ch. 528, § 31.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-44-10. Severability.

The provisions of this chapter shall be severable, and if any clause, sentence, paragraph, subdivision, section, or part of this chapter shall be adjudged by any court of competent jurisdiction to be invalid, the judgment shall not affect, impair, or invalidate the remainder of this chapter but shall be confined in its operation to the clause, sentence, paragraph, subdivision, section, or part of this chapter directly involved in the controversy in which the judgment shall have been rendered.

History of Section. P.L. 1989, ch. 481, § 1.

Chapter 45 Consumer Enforcement of Assistive Technology Device Warranties

6-45-1. Definitions.

The following words and phrases as used in this chapter, for the purposes of this chapter, have the following meanings:

  1. “Assistive technology device” means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used or designed to be used to increase, maintain, or improve any functional capability of an individual with disabilities. An assistive technology device system that as a whole is within the definition of this term is itself an assistive technology device, and in this case, this term also applies to each component product of the assistive technology device system that is itself ordinarily an assistive technology device. This term includes, but is not limited to:
    1. Wheelchairs and scooters of any kind and other aids that enhance the mobility or positioning of an individual, such as motorization, motorized positioning features, and the switches and controls for any motorized features;
    2. Hearing aids, telephone communication devices for persons who are deaf or hard of hearing, and other assistive listening devices;
    3. Computer equipment and reading devices with voice output, optical scanners, talking software, Braille printers, and other aids and devices that provide access to text;
    4. Computer equipment with voice output, artificial larynges, voice amplification devices, and other alternative and augmentative communication devices;
    5. Voice recognition computer equipment, software and hardware accommodations, switches, and other forms of alternative access to computers;
    6. Environmental control units; and
    7. Simple mechanical aids that enhance the functional capabilities of an individual with disabilities.
  2. “Assistive technology device dealer” means a dealer who is in the business of selling or leasing assistive technology devices. A dealer shall be an assistive technology device dealer with respect to a particular sale or lease of a product that constitutes an assistive technology device as to that sale or lease if he or she is in the business generally of selling or leasing that product or kind of product without regard to whether that product constitutes an assistive technology device for other buyers.
  3. “Assistive technology device system” means the final product resulting from a manufacturer customizing, adapting, reconfiguring, refitting, refurbishing, or composing into a system one or more component products, whether or not new, that may be assistive technology devices or standard products of the same or other manufacturer.
  4. “Collateral costs” means expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining another device or service to substitute for the absence, due to a nonconformity or attempt to repair, of the device sold or leased to the consumer, if no loaner was offered to the consumer, except to the extent the person opposing liability for these costs shall prove that incurring these expenses was not reasonable in light of the sophistication of, and the means readily available, to the consumer.
  5. “Conforming replacement” means a new device in good working order that is identical to or has functional capabilities equal to or greater than those of the original device.
  6. “Consumer” of an assistive technology device means the person who is a party, whether the buyer or the lessee, to the contract of sale or lease, respectively, of that device. This party may be, but is not necessarily, the user.
  7. “Dealer” means the person who is the party, whether the seller or the lessor, to the contract with the consumer of sale or lease of the device.
  8. “Demonstrator” means an assistive technology device that would be new but for its use since its manufacture only for the purpose of demonstrating the device to the public or prospective buyers or lessees.
  9. “Early termination cost” means any expense or obligation that a lessor incurs as a result of both the termination of a written lease before the termination date set forth in that lease and the return of the device to the manufacturer. Early termination cost includes a penalty for prepayment under a finance arrangement.
  10. “Early termination savings” means any expense or obligation that a lessor avoids as a result of both the termination of a written lease before the termination date set forth in that lease and the return of the device to the manufacturer, which shall include an interest charge that the lessor would have paid to finance the device or, if the lessor does not finance the device, the difference between the total amount for which the lease obligates the consumer during the period of the lease term remaining after the early termination and the present value of that amount at the date of the early termination.
  11. “Individual with disabilities” means any individual who is considered to have a mental or physical disability or impairment for the purposes of any other law of this state or of the United States, including any rules or regulations under this state or of the United States.
  12. “Loaner” means a device provided to the consumer for use by the user free of charge that need not be new, nor identical to, nor have functional capabilities equal to or greater than those of the original device, but that meets the following conditions:
    1. It is in good working order;
    2. It performs at a minimum the most essential functions of the original device in light of the disabilities of the user; and
    3. Any differences between it and the original device do not create a threat to safety.
  13. “Manufacturer” means:
    1. The person who manufactures or assembles an assistive technology device;
    2. The person who manufactures or assembles a product that becomes a component product of an assistive technology device system, to the extent such product is itself ordinarily an assistive technology device; and
    3. Agents of a person described in subsection (13)(i) or (13)(ii) of this section, including an importer, a distributor, factory branch, distributor branch, and any warrantors of the manufacturer’s devices, provided that such agents shall not include, with respect to a particular transaction, the dealer, unless the dealer is also a person described in subsection (13)(i) or (13)(ii) of this section.
  14. “Nonconformity” of an assistive technology device means any failure of the device to conform to any applicable express or implied warranties that substantially impairs the use, value, or safety of the device. The implied warranties described in the preceding sentence include, but are not limited to, the implied warranty of merchantability described in §§ 6A-2-314 or 6A-2.1-212 , and the implied warranty of fitness for a particular purpose described in §§ 6A-2-315 or 6A-2.1-213 and subject to the provisions of § 6-45-2 .
  15. “Term A” means the year following the date the device is first delivered into the possession of the consumer.
  16. “Term B” means the two (2) years following the date the device is first delivered into the possession of the consumer.
  17. “User” of an assistive technology device means the individual with a disability who, by reason of this disability, needs and actually uses that device.

History of Section. P.L. 1995, ch. 222, § 1; P.L. 1999, ch. 83, § 3; P.L. 1999, ch. 130, § 3; P.L. 2014, ch. 528, § 32.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-45-2. Effect on implied warranties of Uniform Commercial Code.

  1. For purposes of §§ 6A-2-314 or 6A-2.1-212 and §§ 6A-2-315 or 6A-2.1-213 , with respect to a sale or a lease of an assistive technology device, the term “seller” or “lessor” includes the manufacturer of the device.
  2. For purposes of §§ 6A-2-315 or 6A-2.1-213 , with respect to a sale or lease of an assistive technology device, the seller or lessor shall be deemed to know that the particular purpose, for which the device is required, is to increase, maintain, or improve those functional capabilities that are appropriate to the kind of device involved in light of any knowledge that the seller or lessor may have acquired of the disabilities of the consumer.
  3. For purposes of §§ 6A-2-315 or 6A-2.1-213 , with respect to a sale or lease of an assistive technology device, the seller or lessor shall be deemed to know that the consumer is relying on the seller’s or lessor’s skill or judgment to select or furnish a suitable device in light of the knowledge that the seller or lessor has, or is deemed to have by reason of subsection (b) of this section, unless the consumer specifies a particular device and signs and is furnished a copy of a writing that:
    1. Particularly describes the device that the consumer is specifying;
    2. States that this person is specifying that device described; and
    3. Contains the following notice, conspicuously in type that is at least four (4) points larger than the surrounding text: “There is no warranty (guarantee) that this product will be fit for your particular needs. There is only a warranty (guarantee) that the product will be fit for the purposes that it ordinarily meets. This is because you have specified the product you want to buy instead of relying on the seller’s/lessor’s knowledge to help choose one based upon your particular needs.”
  4. With respect to a sale or lease of an assistive technology device, the implied warranty of merchantability described in §§ 6A-2-314 or 6A-2.1-212 and the implied warranty of fitness for a particular purpose described in §§ 6A-2-315 or 6A-2.1-213 shall not be excluded or modified, pursuant to §§ 6A-2-316 or 6A-2.1-214 or otherwise.

History of Section. P.L. 1995, ch. 222, § 1; P.L. 2014, ch. 528, § 32.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-45-3. Repair of assistive technology device with nonconformity.

  1. If a new assistive technology device or demonstrator has a nonconformity and the consumer first reports that nonconformity to the manufacturer of the device or its authorized dealer within Term B, then the manufacturer of the device shall be jointly obligated, together with any authorized dealer if an assistive technology device dealer was involved in the sale or lease of the device, to effect any repairs as are necessary to conform the device to all warranties, notwithstanding that those repairs might be made after the expiration of Term B.
  2. For all purposes of this chapter, a consumer reports a nonconformity when he or she:
    1. Makes any communication, written or oral, that describes a problem with the device, or that may be reasonably understood as an expression of dissatisfaction with any aspect of the operation of the device, which communication need only indicate in any way the nature of the problem, such as an indication of the functions that the device is not achieving or achieving unsatisfactorily to the consumer, and need not be in technical language or attempt to state the cause of the problem;
    2. Does not refuse to make the device available to the manufacturer or dealer for repair; and
    3. The problem indicated by the consumer’s communication constitutes, or is caused by, a nonconformity.
  3. It shall be presumed that the consumer has made the device available to the manufacturer or dealer for repair if he or she allows the manufacturer or dealer to take it from the consumer’s home or other location where the user customarily uses the device. The consumer shall be required to deliver the device to another location only upon a showing that it would be a substantially greater hardship for the manufacturer and dealer to take the device from the consumer’s home, or other location where the user customarily uses the device, than for the consumer to deliver the device.
  4. Whether or not the rights of the consumer provided by § 6-45-5(a) have arisen, and in addition to the remedies relating to collateral costs provided by this chapter, a person who is under an obligation to repair pursuant to this section is obliged immediately to provide the consumer a loaner if the absence of a loaner would be a threat to the safety of the user, but in any event when the out-of-service period exceeds seven (7) days as determined by § 6-45-4(b) and (c).

History of Section. P.L. 1995, ch. 222, § 1; P.L. 2014, ch. 528, § 32.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-45-4. Reasonable number of attempts to repair.

  1. A “reasonable number of attempts to repair” an assistive technology device with a nonconformity means the occurrence of one or both of the following:
    1. The same nonconformity that is first reported during Term A is subject to repair two (2) or more times during Term B; or
    2. The device is out-of-service for an aggregate of thirty (30) or more calendar days during Term A because of one or more nonconformities.
  2. For purposes of counting the days for which a device is out-of-service because of one or more nonconformities, an out-of-service period shall begin with and include the day that is the later of:
    1. The day the nonconformity first appears; or
    2. The business day prior to the day on which the consumer first reports the nonconformity to the manufacturer of the device or its authorized dealer.
  3. For purposes of counting the days for which a device is out-of-service because of one or more nonconformities, an out-of-service period shall end with and include the day on which the device is returned after repair, and is then free of nonconformities, to the possession of the consumer, unless this return is made by 10:00 a.m. of that day in which case the out-of-service period shall end with and include the previous day.
  4. In the event an out-of-service period has commenced during Term A, then for purposes of subsection (a)(2), Term A shall continue until the end of this out-of-service period.

History of Section. P.L. 1995, ch. 222, § 1; P.L. 2014, ch. 528, § 32.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-45-5. Replacement or refund for device.

  1. If, after a reasonable number of attempts to repair, a nonconformity develops in a new assistive technology device or demonstrator, the manufacturer shall carry out the requirement under subsections (a)(1) and (a)(2) at the sole option of the consumer upon his or her request for it:
      1. In the case of a sale, the manufacturer shall refund to the consumer and to any holder of a perfected security interest, as their interest may appear, the full purchase price plus any finance charge or sales tax paid by the consumer at the point of sale and collateral costs, less a reasonable allowance for use.
      2. In the case of a lease, the manufacturer shall refund to the lessor and to any holder of a perfected security interest, as their interest may appear, the current value of the lease and refund to the consumer the amount that the consumer paid under the lease plus any collateral costs, less a reasonable allowance for use.
    1. The manufacturer shall provide a conforming replacement.
    1. To receive the refund described in subsection (a)(1) or the replacement described in subsection (a)(2) the consumer shall offer to the manufacturer of the device or its authorized dealer to transfer possession of the device.
    2. The manufacturer shall make the refund required by this section within fourteen (14) calendar days after the offer described in this subsection.
    3. The manufacturer shall make the replacement required by this section within thirty (30) calendar days after the offer described in this subsection.
    4. If the replacement required by this section is not made within fourteen (14) calendar days after the offer described in this subsection, then the manufacturer shall provide the consumer a loaner for use until replacement is made.
    5. The manufacturer may require that, simultaneously with the manufacturer timely making the refund payment described in subsection (a)(1) of this section or the replacement described in subsection (a)(2) of this section, the consumer shall deliver possession of the original device to the manufacturer or its authorized dealer and sign any documents necessary to, or to provide reasonable evidence of, a transfer of title and possession of the device to any person as the manufacturer shall designate.
    6. The manufacturer may impose the requirements described in subsection (b)(5) of this section only if:
      1. The time and place of the mutual activities described in subsections (b)(2), (b)(3), and (b)(5) are readily accessible to the consumer; and
      2. The manufacturer provides the consumer a writing that is received no later than four (4) business days before the time of these mutual activities and states in clear and understandable language the time and place of these mutual activities and the requirements allowed by subsection (b)(5) that the consumer must meet at that time and place.
  2. A reasonable allowance for use shall be that amount obtained by multiplying the full purchase price (or in the case of a lease, the total amount for which the lease obligates the consumer) by a fraction, the denominator of which is the number of days in the useful life of the device and the numerator of which is the number of days after delivery of the device to the consumer and prior to the beginning of the first out-of-service period as defined in § 6-45-4(b) .
  3. As used in subsection (c) of this section, the useful life of the device equals the greater of:
    1. Five (5) years; or
    2. Any other time that the consumer may prove to be the expected useful life of devices of the same kind.
  4. The current value of the lease equals the total amount for which that lease obligates the consumer during the period of the lease remaining after its early termination, plus the lessor’s early termination costs and the value of the device at the lease expiration date, less the lessor’s early termination savings.
  5. In the case of a manufacturer of an assistive technology device system of which one or more component products are not new, if the dealer gives the consumer, prior to his or her decision to enter into the sale or lease, a written statement specifying the component products that are not new and containing the following statement: “You will not have replace-or-refund rights under the Assistive Technology Lemon Law for the component products listed on this sheet”, then the manufacturer shall not have the duties and liabilities of a manufacturer under this section with respect to these component products, but only with respect to component products that are new and to the work performed by the manufacturer in creating the assistive technology device system.

History of Section. P.L. 1995, ch. 222, § 1; P.L. 2014, ch. 528, § 32.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-45-6. Nonconformity disclosure requirement.

  1. No assistive technology device returned by a consumer in this state or any other state by reason of problems with its performance, fitness, quality, or functioning may be sold or leased again in this state unless full written disclosure is made to any prospective buyer or lessor of any return, including the date, reasons for the return, and the history of attempts to repair.
  2. If a sale or lease is made of an assistive technology device in violation of subsection (a) of this section, a consumer who bought or took the lease of the device shall have the rights of a consumer of a new assistive technology device provided by § 6-45-5(a) , without regard to whether there is a nonconformity or to whether there has been a reasonable number of attempts to repair, except that if the consumer chooses the refund option described in § 6-45-5(a)(1) , there shall be no deduction from the full purchase price in calculating the refund under that paragraph. The rights described in this paragraph run against the person who last sold or transferred the device to any other person, whether or not a consumer, with knowledge of the previous return of the device, without providing the disclosure required by the preceding paragraph. These rights may be declared and exercised by the consumer at any time within two (2) years after he or she knows of the previous return and the person against whom the rights run.

History of Section. P.L. 1995, ch. 222, § 1.

6-45-7. Remedies.

  1. In addition to pursuing any other remedy, a consumer may bring an action to recover any damages caused by a violation of this chapter, plus taxable costs and reasonable attorneys’ fees. For a violation of any of the obligations provided by § 6-45-5(a) , whether relative to a refund as described in § 6-45-5(a) (1) or to a replacement as described in § 6-45-5(a)(2) , the court shall award damages equal to the greater of:
    1. Actual damages; or
    2. The sum of:
      1. Two (2) times the amount obtained as:
        1. The amount that should have been refunded under § 6-45-5(a)(1) or that should have been refunded under § 6-45-5(a)(1) had the consumer chosen that option; minus
        2. The amount that was actually refunded, if any; minus
        3. The amount, if any, of the difference between the amounts described in clauses (A) and (B) that was attributable to a good faith dispute by the manufacturer as to:
          1. The amount of collateral costs; or
          2. The length of a useful life greater than five (5) years in calculating the reasonable allowance for use under § 6-45-5(c) and 6-45-5(d) ; and
      2. The amount described in subsection (a)(2)(i)(C) of this section.
  2. Actual damages caused by a violation of this chapter shall include collateral costs, beginning at the time of the violation, whether or not the consumer acquired the rights provided by § 6-45-5(a) .
  3. The remedies of a buyer or lessee described in §§ 6A-2-715 or 6A-2.1-520 , with respect to an assistive technology device, shall not be excluded or limited.
  4. The rights and remedies provided to the consumer by this chapter shall be in addition to those available under any other law.
  5. Any waiver by a consumer of rights under this chapter is void.

History of Section. P.L. 1995, ch. 222, § 1; P.L. 2014, ch. 528, § 32.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 46 Equipment Dealerships

6-46-1. Short title.

This chapter shall be known and may be cited as the “Rhode Island Equipment Dealership Act”.

History of Section. P.L. 1998, ch. 408, § 1.

Cross References.

Licensing of motor vehicle dealers, § 31-5-1 et seq.

6-46-2. Definitions.

For the purposes of this chapter, the terms defined in this section have the following meanings:

  1. “Current net price” means the price listed in the supplier’s price list or catalog in effect at the time the dealer agreement is terminated, less any applicable discounts allowed.
  2. “Dealer” means a person, corporation, or partnership primarily engaged in the business of retail sales of farm and utility tractors, forestry equipment, industrial or construction equipment, farm implements, farm machinery, yard and garden equipment, attachments, accessories, and repair parts. The term “dealer” shall not include a single-line dealer primarily engaged in the retail sale and service of industrial, forestry, and construction equipment.
  3. “Dealer agreement” means a written or oral contract or agreement between a dealer and a wholesaler, manufacturer, or distributor by which the dealer is granted the right to sell or distribute goods or services or to use a trade name, trademark, service mark, logotype, or advertising or other commercial symbol.
  4. “Inventory” means farm, utility, forestry, industrial or construction equipment, implements, machinery, yard and garden equipment, attachments, or repair parts.
  5. “Net cost” means the price the dealer paid the supplier for the inventory, less all applicable discounts allowed, plus the amount the dealer paid for freight costs from the supplier’s location to the dealer’s location. In the event of termination of a dealer agreement by the supplier, “net cost” includes the reasonable cost of assembly and/or disassembly performed by a dealer.
  6. “Single-line dealer” means a person, partnership, or corporation who or that:
    1. Has purchased seventy-five percent (75%) or more of the dealer’s total new product inventory from a single supplier; and
    2. Who has a total annual average sales volume for the previous three (3) years in excess of twenty million dollars ($20,000,000) for the entire territory for which the dealer is responsible.
  7. “Supplier” means a wholesaler, manufacturer, or distributor of inventory who enters into a dealer agreement with a dealer.
  8. “Termination” of a dealer agreement means the cancellation, non-renewal, or non-continuance of the agreement.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-3. Notice of termination of dealer agreements.

  1. Notwithstanding any agreement to the contrary, prior to the termination of a dealer agreement, a supplier shall notify the dealer of the termination not less than one hundred twenty (120) days prior to the effective date of the termination. No supplier may terminate, cancel, or fail to renew a dealer agreement without cause. For purposes of this subsection “cause” means failure by an equipment dealer to comply with requirements imposed upon the equipment dealer by the dealer agreement, provided the requirements are not substantially different from those requirements imposed upon other similarly situated dealers in this state.
  2. The supplier may immediately terminate the agreement at any time upon the occurrence of any of the following events:
    1. The filing of a petition for bankruptcy or for receivership either by or against the dealer;
    2. The making by the dealer of an intentional and material misrepresentation as to the dealer’s financial status;
    3. Any default by the dealer under a chattel mortgage or other security agreement between the dealer and the supplier;
    4. The commencement of voluntary or involuntary dissolution or liquidation of the dealer if the dealer is a partnership or corporation;
    5. A change in location of the dealer’s principal place of business as provided in the agreement without the prior written approval of the supplier;
    6. Withdrawal of an individual proprietor, partner, major shareholder, or the involuntary termination of the manager of the dealership, or a substantial reduction in the interest of a partner or major shareholder without the prior, written consent of the supplier.
  3. Unless there is an agreement to the contrary, a dealer who intends to terminate a dealer agreement with a supplier shall notify the supplier of that intent not less than one hundred twenty (120) days prior to the effective date of the termination.
  4. Notification required by either party under this section shall be in writing and shall be made by certified mail or by personal delivery and shall contain:
    1. A statement of intention to terminate the dealer agreement;
    2. A statement of the reasons for the termination; and
    3. The date on which the termination shall be effective.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-4. Supplier’s duty to repurchase inventory.

  1. Whenever a dealer enters into a dealer agreement under which the dealer agrees to maintain an inventory, and the agreement is terminated by either party as provided in this chapter, the supplier, upon written request of the dealer filed within thirty (30) days of the effective date of the termination, shall repurchase the dealer’s inventory as provided in this chapter. There shall be no requirement for the supplier to repurchase inventory pursuant to this section if:
    1. The dealer has made an intentional and material misrepresentation as to the dealer’s financial status;
    2. The dealer has defaulted under the chattel mortgage or other security agreement between the dealer and supplier; or
    3. The dealer has filed a voluntary petition in bankruptcy.
  2. Whenever a dealer enters into a dealer agreement in which the dealer agrees to maintain an inventory and the dealer or the majority stockholder of the dealer, if the dealer is a corporation, dies, or becomes incompetent, the supplier shall, at the option of the heir, personal representative, guardian of the dealer, or the person who succeeds to the stock of the majority stockholder, repurchase the inventory as if the agreement had been terminated. The heir, personal representative, guardian, or succeeding stockholder has six (6) months from the date of the death of the dealer or majority stockholder to exercise the option under this chapter.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-5. Repurchase terms.

  1. Within ninety (90) days from the receipt of the written request of the dealer, a supplier under the duty to repurchase inventory pursuant to this chapter may examine any books or records of the dealer to verify the eligibility of any item for repurchase. Except as otherwise provided in this chapter, the supplier shall repurchase from the dealer all inventory, required signage, special tools, books, supplies, data processing equipment, and software previously purchased from the supplier or other qualified vendor in the possession of the dealer on the date of termination of the dealer agreement.
  2. The supplier shall pay the dealer:
    1. One hundred percent (100%) of the net cost of all new and undamaged and complete farm and utility tractors, forestry equipment, light industrial equipment, farm implements, farm machinery, or yard and garden equipment purchased within the past thirty six (36) months from the supplier, less a reasonable allowance for deterioration attributable to weather conditions at the dealer’s location;
    2. Ninety percent (90%) of the current net prices of all new and undamaged repair parts;
    3. Eighty-five percent (85%) of the current net price of all new and undamaged superseded repair parts;
    4. Eighty-five percent (85%) of the latest available published net price of all new and undamaged non-current repair parts;
    5. Either the fair market value or assume the lease responsibilities of any specific data processing hardware that the supplier required the equipment dealer to acquire or purchase to satisfy the reasonable requirements of the dealer agreement, including computer systems equipment required and approved by the supplier to communicate with the supplier;
    6. Repurchase at seventy-five percent (75%) of the net cost specialized repair tools, signage, books, and supplies previously purchased pursuant to requirements of the supplier and held by the equipment dealer on the date of termination. Specialized repair tools must be unique to the supplier product line and must be complete and in usable condition; and
    7. Repurchase, at average, as-is value shown in current industry guides, dealer-owned rental fleet financed by the supplier or its finance subsidiary.
  3. The party that initiates the termination of the dealer agreement shall pay the cost of the return, handling, packing, and loading of this inventory.
  4. Payment to the dealer required under this section shall be made by the supplier not later than forty-five (45) days after receipt of the inventory by the supplier. A penalty shall be assessed in the amount of two percent (2%) per day of any outstanding balance over the required forty-five (45) days. The supplier shall be entitled to apply any payment required under this section to be made to the dealer as a set-off against any amount owed by the dealer to the supplier.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-6. Exceptions to repurchase requirement.

The provisions of this chapter shall not require the repurchase from a dealer of:

  1. A repair part with a limited storage life or otherwise subject to physical or structural deterioration including, but not limited to, gaskets or batteries;
  2. A single repair part normally priced and sold in a set of two or more items;
  3. A repair part that, because of its condition, cannot be marketed as a new part without repackaging or reconditioning by the supplier or manufacturer;
  4. Any inventory that the dealer elects to retain;
  5. Any inventory ordered by the dealer after receipt of notice of termination of the dealer agreement by either the dealer or supplier;
  6. Any inventory that was acquired by the dealer from a source other than the supplier.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-7. Transfer of business.

  1. No supplier shall unreasonably withhold or delay consent to any transfer of the dealer’s business or transfer of the stock or other interest in the dealership whenever the dealer to be substituted meets the material and reasonable business and financial requirements of the supplier. Should a supplier determine that a proposed transferee does not meet these requirements, it shall give the dealer written notice stating the specific reasons for withholding consent. No prospective transferee may be disqualified to be a dealer because it is a publicly held corporation. A supplier shall have ninety (90) days to consider a dealer’s request to make a transfer under this subsection.
  2. No supplier shall unreasonably withhold consent to the transfer of the dealer’s business to a member or members of the family of the dealer or the principal owner of the dealership if the family member meets the reasonable business ability, business experience, and character standards of the supplier, and if the transferee can demonstrate that the dealership will be adequately capitalized. Should a supplier determine that the designated family member does not meet those requirements, the supplier shall provide the dealer with written notice of the supplier’s objection and specific reasons for withholding its consent. As used in this subsection, “family” means and includes the spouse, parent, siblings, children, stepchildren, and lineal descendants, including those by adoption of the dealer or principal owner of the dealership.
  3. In any dispute as to whether a supplier has denied consent in violation of this section, the supplier shall have the burden of proving a substantial and reasonable justification for the denial of consent.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-8. Uniform commercial practice.

Nothing contained in this chapter may be construed to release or terminate a perfected security interest of the supplier in the inventory of the dealer.

History of Section. P.L. 1998, ch. 408, § 1.

6-46-9. Warranty obligations.

Whenever a supplier and a dealer enter into an agreement providing consumer warranties, the supplier shall pay any warranty claim made for warranty parts and service within thirty (30) days after its receipt and approval. The supplier shall approve or disapprove a warranty claim within thirty (30) days after its receipt. If a claim is not specifically disapproved in writing within thirty (30) days after its receipt, it shall be deemed to be approved and payment shall be made by the supplier within thirty (30) days.

History of Section. P.L. 1998, ch. 408, § 1.

6-46-10. Remedies.

Nothing contained in this section shall bar the right of an agreement to provide for binding arbitration of disputes. Any arbitration shall be consistent with the provisions of this chapter and other appropriate state law. The place of any arbitration shall be in the city or county in which the dealer maintains the dealer’s principal place of business in this state.

History of Section. P.L. 1998, ch. 408, § 1.

6-46-11. Waiver of chapter void.

  1. The provisions of this chapter shall be deemed to be incorporated in every agreement and shall supersede and control all other provisions of the agreement. No supplier may require any dealer to waive compliance with any provision of this chapter. Any contract or agreement purporting to do so is void and unenforceable to the extent of the waiver or variance.
  2. Nothing in this chapter may be construed to limit or prohibit good-faith settlements of disputes voluntarily entered into between the parties.

History of Section. P.L. 1998, ch. 408, § 1; P.L. 2014, ch. 528, § 33.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-46-12. Obligation of successors in interest.

The obligation of any supplier or dealer is applied to and made an obligation of any successor in interest or assignee of the supplier or dealer. A successor in interest includes, but is not limited to, any purchaser of the assets or stock, and surviving entity resulting from merger or liquidation, any receiver or any trustee of the original supplier or dealer.

History of Section. P.L. 1998, ch. 408, § 1.

Chapter 47 Internet Access and Advertising by Facsimile

6-47-1. Advertising by fax.

  1. No person or entity conducting business in the state of Rhode Island shall transmit by facsimile (fax), or cause to be faxed, documents consisting of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit unless:
    1. In the case of a fax, that person or entity must establish a toll-free telephone number that a recipient of the unsolicited faxed documents may call to notify the sender not to fax the recipient any further unsolicited documents.
    2. In the case of faxed material, the statement shall be in at least nine-point (9) type. The statement shall be the first text in the body of the message and shall be of the same size as the majority of the text of the message.
  2. Upon notification by a recipient of his or her request not to receive any further unsolicited fax, no person or entity conducting business in the state of Rhode Island shall fax or cause to be faxed any unsolicited documents to that recipient.
  3. As used in this chapter, “unsolicited fax” means any document or documents consisting of advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit that meet both of the following requirements:
    1. The documents are addressed to a recipient with whom the initiator does not have an existing business or personal relationship.
    2. The documents are not sent at the request of, or with the express consent of, the recipient.
  4. As used in this chapter, “fax” or “caused to be faxed” does not include or refer to the transmission of any documents by a telecommunications utility or internet service provider to the extent that the telecommunications utility or internet service provider merely carries that transmission over its network.
  5. The recipient of an unsolicited fax, transmitted in violation of subsection (b) of this section, may bring a civil action in superior court against the person or entity that transmitted the unsolicited fax or caused it to be transmitted in violation of subsection (b). Any transmission of an unsolicited fax in violation of subsection (b) shall be considered a violation of chapter 13.1 of this title, known as the Deceptive Trade Practices Act, and may subject the person or entity that transmitted, or caused to be transmitted, the unsolicited fax to prosecution by the attorney general pursuant to chapter 13.1 of this title. In any such action by either the recipient of such unsolicited fax or the attorney general on behalf of the recipient or recipients, damages may be awarded in the amount of five hundred dollars ($500) for each violation, not to exceed a total of fifty thousand dollars ($50,000). The attorney general may, in such circumstances as he or she may deem appropriate, aggregate multiple claims against a person or entity alleged to have committed multiple violations of this section and maintain a class action on behalf of all recipients of the unsolicited faxes. In any action brought under this section, the court may award, in addition to the relief provided in this section, reasonable attorneys’ fees and costs.

History of Section. P.L. 1999, ch. 479, § 1; P.L. 2007, ch. 425, § 1; P.L. 2014, ch. 528, § 34.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Validity, construction, and application of state statute or law pertaining to telephone solicitation. 44 A.L.R.5th 619.

6-47-2. Unsolicited electronic mail.

  1. No person or entity may initiate the transmission of a commercial electronic mail message from a computer located in Rhode Island or to an electronic mail address that the sender knows, or has reason to know, is held by a Rhode Island resident unless that person or entity establishes a toll-free telephone number or valid sender operated return e-mail address that the recipient of the unsolicited documents may call or e-mail to notify the sender not to e-mail any further unsolicited documents.
  2. All unsolicited commercial electronic messages subject to this section shall include a statement informing the recipient of the toll-free telephone number that the recipient may call, or a valid return address to which the recipient may write or e-mail, as the case may be, notifying the sender not to e-mail the recipient any further unsolicited commercial electronic mail messages to the e-mail address or addresses specified by the recipient.
  3. Upon notification by a recipient of his or her request not to receive any further unsolicited commercial electronic mail messages, no person or entity subject to subsection (a) shall e-mail, or cause to be e-mailed, any unsolicited documents to that recipient.
  4. No person or entity may initiate the transmission of a commercial electronic mail message from a computer located in Rhode Island or to an electronic mail address that the sender knows, or has reason to know, is held by a Rhode Island resident, that fraudulently uses a third-party’s internet domain name without permission of the third party, or otherwise fraudulently misrepresents any information in identifying the point of origin or the transmission path of a commercial electronic mail message.
  5. As used in this section, “commercial electronic messages” means any e-mailed document or documents consisting of commercial advertising material, the principal purpose of which is to promote the for-profit sale or lease of goods or services to the recipient and that meet both of the following requirements:
    1. The documents are addressed to a recipient with whom the initiator does not have an existing business or personal relationship.
    2. The documents are not sent at the request of, or with the express consent of, the recipient.
  6. As used in this section, “e-mail” or “caused to be e-mailed” does not include or refer to the transmission of any documents by a telecommunications utility or internet service provider to the extent that the telecommunications utility or internet service provider merely carries that transmission over its network.
  7. For purposes of this section, a person or entity has reason to know that the intended recipient of a commercial electronic mail message is a Rhode Island resident if the recipient has requested of the sender not to receive any further unsolicited commercial electronic messages.
  8. Any person or entity who or that violates the provisions of this chapter shall be liable for damages to the recipient of an unsolicited commercial electronic mail message in the amount of one hundred dollars ($100) for each such violation. In addition, the recipient may recover reasonable attorney’s fees and costs.

History of Section. P.L. 1999, ch. 479, § 1; P.L. 2014, ch. 528, § 34.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Collateral References.

Validity of state statutes and administrative regulations regulating internet communications under commerce clause and First Amendment of federal constitution.98 A.L.R.5th 167.

6-47-3. Severability.

If any provision of this chapter or the application of this chapter to any person or circumstances is held invalid, this invalidity shall not affect other provisions or applications of this chapter, which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

History of Section. P.L. 1999, ch. 479, § 1.

Chapter 48 Consumer Empowerment and Identity Theft Prevention Act of 2006

6-48-1. Short title.

This chapter may be cited as “The Consumer Empowerment and Identity Theft Prevention Act of 2006”.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1.

6-48-2. Purpose.

This act establishes the right of consumers to protect themselves from identity theft or fraud by conferring upon them the right to voluntarily place a security freeze on their credit report.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1.

6-48-3. Legislative findings.

The general assembly finds and declares that:

  1. Identity theft is a growing menace for consumers in the new economy, as vast quantities of sensitive, personal information has become vulnerable to criminal interception and misuse;
  2. Identity theft has become a major law enforcement challenge;
  3. An integral part of many identity thefts involves the interception of personal financial data, the fraudulent acquisition of credit cards or other financial products in another person’s name;
  4. Identity theft is an act that violates the privacy of our citizens, ruins their good names and may subject them to restricted access to credit, diminished employment opportunities, and months or years of effort to repair damage to credit histories;
  5. Social security numbers are frequently used as identification numbers in many computer files, giving access to information an individual may want kept private, making it [is] wise to limit access to an individual’s social security number whenever possible; and
  6. It is therefore a valid public purpose for the Rhode Island general assembly to ensure that the private financial information and social security numbers of the citizens of the state of Rhode Island are less accessible, in order to mitigate the potential for more identity theft to occur.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1.

6-48-4. Definitions.

As used in this chapter:

  1. “Person” means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.
  2. “Consumer” means an individual who is also a resident of this state.
  3. “Consumer reporting agency” has the meaning ascribed to it in 15 U.S.C. § 1681(a)(f).
  4. “Consumer report” has the meaning ascribed to it in 15 U.S.C. § 1681(a)(d).
  5. “Credit card” has the same meaning as in § 103 of 15 U.S.C. § 1601 et. seq. (The Truth in Lending Act.)
  6. “Debit card” means any card or device issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account holding assets of the consumer at such financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor, or services.
  7. “Proper identification” means proper identification as defined in 15 U.S.C. § 1681h(a)(1).
  8. “Security freeze” means a notice placed in a consumer’s credit report at the request of the consumer and subject to certain exceptions, that prohibits the consumer reporting agency from releasing the consumer’s credit report or score related to the extension of credit.
  9. “Reviewing the account” or “account review” includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1.

6-48-5. Security freeze — Timing, covered entities, cost.

    1. A consumer may elect to place a “security freeze” on his or her credit report by making a request by certified mail to a consumer reporting agency at an address designated by the consumer reporting agency to receive such requests.
    2. A consumer reporting agency shall place a security freeze on a consumer’s credit report no later than five (5) business days after receiving from the consumer:
      1. A written request as described in subsection (a)(1); and
      2. Proper identification.
    3. The consumer reporting agency shall send a written confirmation of the security freeze to the consumer within ten (10) business days of placing the freeze and at the same time shall provide the consumer with a unique personal identification number, password, or similar device to be used by the consumer when providing authorization for the release of his or her credit report for a specific period of time, or when permanently removing the freeze.
    4. If the consumer wishes to allow his or her credit report to be accessed for a specific period of time while a freeze is in place, he or she shall contact the consumer reporting agency, using a point of contact designated by the consumer reporting agency, to request that the freeze be temporarily lifted and provide the following:
      1. Proper identification;
      2. The unique personal identification number or password provided by the consumer reporting agency pursuant to subsection (a)(3); and
      3. The proper information regarding the time period for which the report shall be available to users of the credit report.
    5. A consumer reporting agency that receives a request from a consumer to temporarily lift a freeze on a credit report pursuant to subsection (a)(4) shall comply with the request no later than three (3) business days after receiving the request.
    6. A consumer reporting agency may develop procedures involving the use of telephone, fax, or, upon the consent of the consumer in the manner required by the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq., hereinafter referred to as (“E-Sign”) for legally required notices, by the internet, e-mail, or other electronic media to receive and process a request from a consumer to temporarily lift a freeze on a credit report pursuant to subsection (a)(4) in an expedited manner.
    7. A consumer reporting agency shall remove or temporarily lift a freeze placed on a consumer’s credit report only in the following cases:
      1. Upon consumer request, pursuant to subsection (a)(4) or (a)(9); and
      2. If the consumer’s credit report was frozen due to a material misrepresentation of fact by the consumer. If a consumer reporting agency intends to remove a freeze upon a consumer’s credit report pursuant to this paragraph, the consumer reporting agency shall notify the consumer in writing prior to removing the freeze on the consumer’s credit report.
    8. If a third party requests access to a consumer credit report on which a security freeze is in effect; and this request is in connection with an application for credit or any other use; and the consumer does not allow his or her credit report to be accessed; then the third party may treat the application as incomplete.
    9. A security freeze shall remain in place until the consumer requests, using a point of contact designated by the consumer reporting agency, that the security freeze be removed. A consumer reporting agency shall remove a security freeze within three (3) business days of receiving a request for removal from the consumer who provides all of the following:
      1. Proper identification; and
      2. The unique personal identification number or password provided by the consumer reporting agency pursuant to subsection (a)(3).
    10. A consumer reporting agency shall require proper identification of the person making a request to place or remove a security freeze.
    11. A consumer reporting agency may not suggest or otherwise state or imply to a third party that the consumer’s security freeze reflects a negative credit score, history, report, or rating.
    12. The provisions of this section do not apply to the use of a consumer credit report by any of the following:
      1. A person, or the person’s subsidiary, affiliate, agent, or assignee with which the consumer has, or prior to assignment had, an account, contract, or debtor-creditor relationship for the purposes of reviewing the account or collecting the financial obligation owing for the account, contract, or debt;
      2. A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted under subsection (a)(4) for purposes of facilitating the extension of credit or other permissible use;
      3. Any person acting pursuant to a court order, warrant, or subpoena;
      4. A state or local agency that administers a program for establishing and enforcing child support obligations;
      5. The department of health, or its agents or assigns, acting to investigate fraud;
      6. The attorney general, or its agents or assigns, acting to investigate fraud;
      7. The division of taxation, or its agents or assigns, acting to investigate or collect delinquent taxes or unpaid court orders or to fulfill any of its other statutory responsibilities;
      8. The use of a credit report by a person for purposes of prescreening as defined by the federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.;
      9. Any person or entity administering a credit file monitoring subscription service to which the consumer has subscribed;
      10. Any person or entity for the purpose of providing a consumer with a copy of his or her credit report upon the consumer’s request; and
      11. Any person or entity for use in setting or adjusting a rate, adjusting a claim, or underwriting for insurance purposes.
    13. A consumer may not be charged a fee for any security freeze service by a consumer reporting agency.
  1. Entities not required to place a security freeze.  The following entities are not required to place a security freeze on a credit report:
    1. A consumer reporting agency that acts only as a reseller of credit information by assembling and merging information contained in the database of another consumer reporting agency or multiple consumer credit reporting agencies and does not maintain a permanent database of credit information from which new consumer credit reports are produced. However, a consumer reporting agency acting as a reseller shall honor any security freeze placed on a consumer credit report by another consumer reporting agency;
    2. A check services or fraud prevention services company that issues reports on incidents of fraud or authorizations for the purpose of approving or processing negotiable instruments, electronic funds transfers, or similar methods of payments;
    3. A deposit account information service company that issues reports regarding account closures due to fraud, substantial overdrafts, ATM abuse, or similar negative information regarding a consumer to inquiring banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution; and
    4. Any database or file that consists of any information adverse to the interests of the consumer, including, but not limited to, criminal record information; personal loss history information; information used for fraud prevention or detection; tenant screening; and employment screening.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1; P.L. 2014, ch. 528, § 35; P.L. 2018, ch. 31, § 1; P.L. 2018, ch. 33, § 1; P.L. 2019, ch. 308, art. 2, § 3.

Compiler’s Notes.

P.L. 2018, ch. 31, § 1, and P.L. 2018, ch. 33, § 1 enacted identical amendments to this section.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

P.L. 2018, ch. 31, § 2, provides that the amendment to this section by that act takes effect on September 1, 2018.

P.L. 2018, ch. 33, § 2, provides that the amendment to this section by that act takes effect on September 1, 2018.

6-48-6. Notice of rights.

Any time that a consumer is required to receive a summary of rights required under section 609 of the federal Fair Credit Reporting Act, (15 U.S.C. § 1681 et. seq.) the following notice shall be included:

Consumers have the right to obtain a security freeze

You may obtain a security freeze on your credit report to protect your privacy and ensure that credit is not granted in your name without your knowledge. You have a right to place a “security freeze” on your credit report pursuant to chapter 48 of title 6 of the Identity Theft Prevention Act of 2006.

The security freeze will prohibit a consumer reporting agency from releasing any information in your credit report without your express authorization or approval.

The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. When you place a security freeze on your credit report, within five (5) business days you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit report or to temporarily authorize the release of your credit report for a specific period of time after the freeze is in place. To provide that authorization, you must contact the consumer reporting agency and provide all of the following:

  1. The unique personal identification number or password provided by the consumer reporting agency.
  2. Proper identification to verify your identity.
  3. The proper information regarding the period of time for which the report shall be available to users of the credit report.

    A consumer reporting agency that receives a request from a consumer to temporarily lift a freeze on a credit report shall comply with the request no later than three (3) business days after receiving the request.

    A security freeze does not apply to circumstances where you have an existing account relationship and a copy of your report is requested by your existing creditor or its agents or affiliates for certain types of an account review, collection, fraud control, or similar activities.

    If you are actively seeking a new credit, loan, utility, telephone, or insurance account, you should understand that the procedures involved in lifting a security freeze may slow your own applications for credit. You should plan ahead and lift a freeze — either completely, if you are shopping around, or specifically for a certain creditor — with enough advance notice before you apply for new credit for the lifting to take effect.

    You have a right to bring a civil action against someone who violates your rights under the credit reporting laws. The action can be brought against a consumer reporting agency or a user of your credit report.

    Unless you are sixty-five (65) years of age or older, or you are a victim of identity theft with an incident report or complaint from a law enforcement agency, a consumer reporting agency has the right to charge you up to ten dollars ($10.00) to place a freeze on your credit report; up to ten dollars ($10.00) to temporarily lift a freeze on your credit report, depending on the circumstances; and up to ten dollars ($10.00) to remove a freeze from your credit report. If you are sixty-five (65) years of age or older or are a victim of identity theft with a valid incident report or complaint, you may not be charged a fee by a consumer reporting agency for placing, temporarily lifting, or removing a freeze.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1; P.L. 2014, ch. 528, § 35.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-48-7. Violations; Penalties.

  1. Any person who willfully fails to comply with any requirement imposed under this chapter with respect to any consumer is liable to that consumer in an amount equal to the sum of:
    1. Any actual damages sustained by the consumer as a result of the failure or damages of not less than one hundred dollars ($100) and not more than one thousand dollars ($1,000); or
    2. Such amount of punitive damages as the court allows; and
    3. In the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorneys’ fees as determined by the court.
  2. Any person who obtains a consumer report, requests a security freeze, requests the temporary lift of a freeze, or the removal of a security freeze from a consumer reporting agency under false pretenses or in an attempt to violate federal or state law shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or one thousand dollars ($1,000), whichever is greater.
  3. Any person who is negligent in failing to comply with any requirement imposed under this chapter with respect to any consumer is liable to that consumer in an amount equal to the sum of:
    1. Any actual damages sustained by the consumer as a result of the failure and;
    2. In the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorneys’ fees as determined by the court.
  4. Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this chapter was filed in bad faith or for the purposes of harassment, the court shall award to the prevailing party attorneys’ fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1.

6-48-8. Social security number protection — Effective January 1, 2008.

  1. Except as provided in subsection (c) of this section a person or entity, including a state or local agency, may not do any of the following:
    1. Intentionally communicate or otherwise make available to the general public all or part of an individual’s social security number;
    2. Print all or part of an individual’s social security number on any card required for the individual to access products or services provided by the person or entity;
    3. Require an individual to transmit all or part of his or her social security number over the Internet, unless the connection is secure or the social security number is encrypted;
    4. Require an individual to use all or part of his or her social security number to access an Internet Website, unless a password or unique personal identification number or other authentication device is also required to access the Internet Website; and
    5. Print all or part of an individual’s social security number on any materials that are mailed to the individual, unless state or federal law requires the social security number to be on the document to be mailed.

      Notwithstanding this paragraph, social security numbers may be included in applications and forms sent by mail, including documents sent as part of an application or enrollment process, or to establish, amend or terminate an account, contract or policy, or to confirm the accuracy of the social security number. A social security number that is permitted to be mailed under this section may not be printed, in whole or in part, on a postcard or other mailer not requiring an envelope, or visible on the envelope or without the envelope having been opened.

  2. The provisions of this section do not apply to documents that are recorded or required to be open to the public pursuant to the Rhode Island general laws chapter 42-46. This section does not apply to records that are by statute or case law required to be made available to the public by entities provided for in the Rhode Island Constitution.
  3. This section does not prevent the collection, use, or release of a social security number as required by state or federal law or the use of a social security number for internal verification or administrative purposes.
  4. The penalties for violating this section shall be:
    1. Any person who violates this section is responsible for the payment of a civil fine of not more than three thousand dollars ($3,000).
    2. A person who knowingly violates this section is guilty of a misdemeanor punishable by imprisonment for not more than thirty (30) days, or a fine of not more than five thousand dollars ($5,000), or both.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1; P.L. 2011, ch. 57, § 2; P.L. 2011, ch. 69, § 2.

6-48-9. Severability.

If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the chapter, which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

History of Section. P.L. 2006, ch. 226, § 1; P.L. 2006, ch. 270, § 1.

Chapter 49 Electronic Mail Fraud

6-49-1. Short title.

This chapter shall be known and may be cited as the “Electronic Mail Fraud Regulatory Act.”

History of Section. P.L. 2006, ch. 628, § 1.

Compiler’s Notes.

As enacted by P.L. 2006, ch. 628, § 1, this chapter was designated as chapter 48 of title 6. The chapter was redesignated as chapter 49 by the director of law revision of the joint committee on legislative services pursuant to § 43-2-2.1 .

6-49-2. Legislative findings.

It is hereby found and declared as follows:

Consumers are bombarded with electronic communications, often times in a fraudulent attempt to solicit personal and private information. In the interest of protecting the citizens of Rhode Island, it is imperative that the general assembly establish safeguards against such practices. Notwithstanding any provision of the general or public law, rule, or regulation, the general assembly shall establish regulations pertaining to the prevention of electronic mail fraud.

History of Section. P.L. 2006, ch. 628, § 1; P.L. 2014, ch. 528, § 36.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-49-3. Definitions.

For the purpose of this chapter, the following words and phrases shall have the following meanings:

  1. “Assist the transmission” means actions taken by a person to provide substantial assistance or support that enables any person to formulate, compose, send, originate, initiate, or transmit a commercial electronic mail message or a commercial electronic text message when the person providing the assistance knows that the initiator of the commercial electronic mail message or the commercial electronic text message is engaged, or intends to engage, in any practice that violates the consumer protection act.
  2. “Commercial electronic mail message” means an electronic mail message sent for the purpose of promoting real property, goods, or services for sale or lease. It does not mean an electronic mail message to which an interactive computer service provider has attached an advertisement in exchange for free use of an electronic mail account when the sender has agreed to such an arrangement.
  3. “Commercial electronic text message” means an electronic text message sent to promote real property, goods, or services for sale or lease.
  4. “Electronic mail address” means a destination, commonly expressed as a string of characters, to which electronic mail may be sent or delivered.
  5. “Electronic mail message” means an electronic message sent to an electronic mail address and a reference to an internet domain, whether or not displayed, to which an electronic mail message can be sent or delivered.
  6. “Electronic text message” means a text message sent to a cellular telephone or pager equipped with short message service or any similar capability, whether the message is initiated as a short message service message or as an electronic mail message.
  7. “Initiate the transmission” refers to the action by the original sender of an electronic mail message or an electronic text message, not to the action by any intervening, interactive computer service or wireless network that may handle or retransmit the message, unless such intervening, interactive computer service assists in the transmission of an electronic mail message when it knows that the person initiating the transmission is engaged, or intends to engage, in any act or practice that violates the consumer protection act.
  8. “Interactive computer service” means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including, specifically, a service or system that provides access to the internet and such systems operated or services offered by libraries or educational institutions.
  9. “Internet” means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected worldwide network of networks that employ the transmission control protocol/internet protocol, or any predecessor or successor protocols, to such protocol, to communicate information of all kinds by wire or radio.
  10. “Internet domain name” refers to globally unique, hierarchical reference to an internet host or service, assigned through centralized, internet naming authorities, comprising a series of character strings separated by periods, with the right-most string specifying the top of the hierarchy.
  11. “Person” means a person, corporation, partnership, or association.
  12. “Personally identifying information” means an individual’s: (i) social security number; (ii) driver’s license number; (iii) bank account number; (iv) credit or debit card number; (v) personal identification number; (vi) automated or electronic signature; (vii) unique biometric data; (viii) account passwords; or (ix) any other piece of information that can be used to access an individual’s financial accounts or to obtain goods or services.
  13. “Web page” means a location, with respect to the world wide web, that has a single, uniform, resource locator, or other single location with respect to the internet.

History of Section. P.L. 2006, ch. 628, § 1; P.L. 2014, ch. 528, § 36.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-49-4. Prohibited activity.

No person may solicit, request, or take any action to induce another person to provide personally identifying information by means of a web page, electronic mail message, or otherwise using the internet in a manner as previously defined in § 6-49-3 by representing oneself, either directly or by implication, to be a business or individual without the authority or approval of such business or individual. No person may conspire with another person to engage in any act that violates the provisions of this chapter.

History of Section. P.L. 2006, ch. 628, § 1; P.L. 2014, ch. 528, § 36.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-49-5. Damages.

  1. Damages to a consumer resulting from the practices prohibited by this chapter are up to five hundred dollars ($500) per violation, or actual damages, whichever is greater.
  2. A person engaged in the business of providing internet access service to the public; an owner of a web page; or trademark owner adversely affected by reason of a violation of this chapter, may bring an action against a person who violates this chapter to:
    1. Enjoin further violations of this chapter; and
    2. Recover the greater of actual damages or five thousand dollars ($5,000) per violation of this chapter.
  3. The court may increase the damages up to three (3) times the damages allowed by this section if the defendant has engaged in a pattern and practice of violating this chapter. The court may award costs and reasonable attorneys’ fees to a prevailing party.

History of Section. P.L. 2006, ch. 628, § 1; P.L. 2014, ch. 528, § 36.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-49-6. Severability.

If any of the provisions of this chapter, or the application of any provision to any person or circumstance, shall be held invalid, the remainder of this chapter, or the application of the provisions to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

History of Section. P.L. 2006, ch. 628, § 1.

Chapter 50 The Rhode Island Fair Dealership Act

6-50-1. Short title.

This chapter shall be known as the “Rhode Island Fair Dealership Act.”

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1.

NOTES TO DECISIONS

Applicability.

Rhode Island Fair Dealership Act (FDA), R.I. Gen. Laws § 6-50-1 et seq., is a substantive law creating, defining, and regulating the rights of parties to a dealership agreement; thus the FDA does not apply retroactively. Pascale Serv. Corp. v. Int'l Truck & Engine Corp., 558 F. Supp. 2d 217, 2008 U.S. Dist. LEXIS 45176 (D.R.I. 2008).

6-50-2. Definitions.

In this chapter:

  1. “Community of interest” means a continuing financial interest between the grantor and the grantee in either the operation of the dealership business or the marketing of such goods or services;
  2. “Dealer” means a person who is a grantee of a dealership situated in this state;
  3. “Dealership” means any of the following:
    1. A contract or agreement, either expressed or implied, whether oral or written, between two (2) or more persons, by which a person is granted the right to sell or distribute goods or services, or use a trade name, trademark, service mark, logotype, advertising, or other commercial symbol, in which there is a community of interest in the business of offering, selling, or distributing goods or services at wholesale, retail, by lease, agreement, or otherwise.
  4. “Good cause” means, for the purposes of this act, good cause for terminating, canceling, or nonrenewal and shall include, but not be limited to, failure by the dealer to comply with the reasonable requirements imposed by the grantor or any of the reasons listed in § 6-50-4(a)(1) — (a)(6).
  5. “Grantor” means a person who grants a dealership;
  6. “Person” means a natural person, partnership, joint venture, corporation, or other entity.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2008, ch. 347, § 1; P.L. 2008, ch. 373, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-50-3. Purposes — Rules of construction — Variation by contract.

  1. This chapter shall be liberally construed and applied to promote its underlying remedial purposes and policies.
  2. The underlying purposes and policies of this chapter are:
    1. To promote the compelling interest of the public in fair business relations between dealers and grantors and in the continuation of dealerships on a fair basis;
    2. To protect dealers against unfair treatment by grantors;
    3. To provide dealers with rights and remedies in addition to those existing by contract or common law;
    4. To govern dealerships, including any renewals or amendments, to the full extent consistent with the constitutions of this state and the United States.
  3. The effect of this chapter may not be varied by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to that extent only.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2008, ch. 347, § 1; P.L. 2008, ch. 373, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Applicability.

Auto parts dealer’s claim that a corporation’s contract termination violated the Rhode Island Fair Dealership Act (FDA) was dismissed as the corporation gave notice before the FDA’s effective date and R.I. Gen. Laws § 6-50-4 governed only the method of giving notice. Examination of R.I. Gen. Laws §§ 6-50-3 and 6-50-4 , revealed little implied intent for retroactivity; despite the FDA’s articulated remedial purpose, it was not a remedial statute as the obligations created and rights defined by § 6-50-4 rendered it a substantive act. Pascale Serv. Corp. v. Int'l Truck & Engine Corp., 558 F. Supp. 2d 217, 2008 U.S. Dist. LEXIS 45176 (D.R.I. 2008).

6-50-4. Notice of termination or change in dealership.

  1. Notwithstanding the terms, provisions, or conditions of any agreement to the contrary, a grantor shall provide a dealer sixty (60) days prior, written notice of termination, cancellation, or nonrenewal. The notice shall state all the reasons for termination, cancellation, or nonrenewal and shall provide that the dealer has thirty (30) days in which to cure any claimed deficiency; provided that a dealer has a right to cure three (3) times in any twelve-month (12) period during the period of the dealership agreement. The sixty-day (60) notice provisions of this section shall not apply and the termination, cancellation, or nonrenewal may be made effective immediately upon written notice if the reason for termination, cancellation, or nonrenewal is in the event the dealer: (1) Voluntarily abandons the dealership relationship; (2) Is convicted of a felony offense related to the business conducted pursuant to the dealership; (3) Engages in any substantial act that tends to materially impair the goodwill of the grantor’s trade name, trademark, service mark, logotype, or other commercial symbol; (4) Makes a material misrepresentation of fact to the grantor relating to the dealership; (5) Attempts to transfer the dealership (or a portion thereof) without authorization of the grantor; or (6) Is insolvent, files, or suffers to be filed against it, any voluntary or involuntary bankruptcy petition or makes an assignment for the benefit of creditors or similar disposition of assets of the dealer business.
  2. If the reason for termination, cancellation, or nonrenewal is nonpayment of sums due under the dealership, the dealers shall be entitled to written notice of such default and shall have ten (10) days in which to cure such default from the date of such notice. A dealer has the right to cure three (3) times in any twelve-month (12) period during the period of the dealership agreement.
  3. If the reason for termination, cancellation, or nonrenewal is for violation of any law, regulation, or standard relating to public health or safety, the dealer shall be entitled to immediate, written notice and shall have twenty-four (24) hours to cure such violation.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2008, ch. 347, § 1; P.L. 2008, ch. 373, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Applicability.

Auto parts dealer’s claim that a corporation’s contract termination violated the Rhode Island Fair Dealership Act (FDA) was dismissed as the corporation gave notice before the FDA’s effective date and R.I. Gen. Laws § 6-50-4 governed only the method of giving notice. Examination of R.I. Gen. Laws §§ 6-50-3 and 6-50-4 revealed little implied intent for retroactivity; despite the FDA’s articulated remedial purpose, it was not a remedial statute as the obligations created and rights defined by § 6-50-4 rendered it a substantive act. Pascale Serv. Corp. v. Int'l Truck & Engine Corp., 558 F. Supp. 2d 217, 2008 U.S. Dist. LEXIS 45176 (D.R.I. 2008).

6-50-5. Repurchase of inventories.

If a dealership is terminated by the grantor, the grantor, at the option of the dealer, shall repurchase all inventories sold by the grantor to the dealer for resale under the dealership agreement at the fair, wholesale market value. This section applies only to merchandise with a name, trademark, label, or other mark on it which identifies the grantor.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-50-6. Application to arbitration agreements.

This chapter shall not apply to provisions for the binding arbitration of disputes contained in a dealership agreement if the criteria for determining whether good cause existed for a termination, cancellation, or nonrenewal and the relief provided is no less than that provided for in this chapter.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2008, ch. 347, § 1; P.L. 2008, ch. 373, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-50-7. Action for damages and injunctive relief.

If any grantor violates this chapter, a dealer may bring an action against such grantor in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the grantor’s violation, together with the actual costs of the action, including reasonable, actual attorneys’ fees. The dealer also may be granted injunctive relief against unlawful termination, cancellation, or nonrenewal.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2008, ch. 347, § 1; P.L. 2008, ch. 373, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-50-8. Temporary injunctions.

In any action brought by a dealer against a grantor under this chapter, any violation of this chapter by the grantor is deemed an irreparable injury to the dealer in determining if temporary injunctions should issue.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1.

6-50-9. Nonapplicability.

This chapter shall not apply to malt beverage dealerships; motor vehicle dealerships; insurance agency relationships; any relationship relating to the sale or administration of insurance or any similar contract with an entity organized under chapters 19 or 20 of title 27; fuel distribution dealerships; and door-to-door sales dealerships.

History of Section. P.L. 2007, ch. 28, § 1; P.L. 2007, ch. 36, § 1; P.L. 2008, ch. 347, § 1; P.L. 2008, ch. 373, § 1; P.L. 2014, ch. 528, § 37.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 51 The Rhode Island Automobile Repossession Act

6-51-1. Legislative findings.

The general assembly finds and declares that:

  1. Rhode Island consumers who have purchased, through an extension of credit, or leased an automobile may fall behind on payments during difficult economic or emotional times and should be allowed to cure a default on the loan or lease within the time provided under this chapter.
  2. If the consumer is unable to cure such a default and the lessor or secured party repossesses the automobile, the repossession cannot take place on the property owned or rented by the consumer without his or her consent except as provided by this chapter or by judicial action. In the event of repossession, a consumer is allowed to redeem the automobile within the time provided by this chapter.
  3. The lessor or secured party who holds title to the automobile shall be allowed to dispose of the automobile after repossession in order to recover the fair market value of the vehicle and expenses from the repossession according to the provisions of this chapter and any other applicable laws of this state.

History of Section. P.L. 2007, ch. 296, § 1; P.L. 2008, ch. 115, § 1; P.L. 2008, ch. 217, § 1; P.L. 2014, ch. 528, § 38.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-51-2. Definitions.

For purposes of this chapter:

  1. “Automobile” means any self-propelled, motored device in, upon, or by which any person is, or may be, transported or drawn upon a highway and is used or brought for use primarily for personal, family, or household purposes and shall include:
    1. An automobile as defined by § 31-1-3 (d);
    2. A motorcycle as defined by § 31-1-3 (l);
    3. A suburban vehicle as defined by § 31-1-3.
  2. “Automobile lease agreement” means the bargain, with respect to the lease, of the lessor and the consumer in fact as found in their language. The term includes a sublease agreement.
  3. “Automobile loan agreement” means a transaction that creates or provides for a security interest in an automobile in which: (1) An individual incurs an obligation primarily for personal, family, or household purposes; (2) A security interest secures the obligation; and (3) The automobile is held or acquired primarily for personal, family, or household purposes.
  4. “Consumer” means any natural person: (1) In an automobile lease agreement who acquires, applies for, or is offered the right to possession and use of goods under an automobile lease and includes a legal representative of, fiduciary for, or successor in interest to, an individual who is a lessee, but does not include a guarantor on a consumer lease; or (2) In an automobile loan agreement with respect to an obligation secured by a security interest in the automobile: (i) Owes payment or other performance of the obligation; (ii) Has provided property other than the collateral to secure payment or other performance of the obligation; or (iii) Is otherwise accountable in whole or part for payment or other performance of the obligation and the term does not include issuers or nominated persons under a letter of credit.
  5. “Lessor” means a person or business who transfers the right to possession and use of an automobile under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.
  6. “Secured party” means a person or business that holds a security interest arising under an automobile loan agreement.

History of Section. P.L. 2007, ch. 296, § 1; P.L. 2014, ch. 528, § 38.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-51-3. Default, notice, right to cure, reinstatement.

  1. The default provisions of a consumer automobile lease or automobile loan agreement are enforceable only to the extent that:
    1. The consumer does not make one or more payments required by the lease or loan agreement; or
    2. The lessor or secured party establishes that the prospect of payment, performance, or realization of the lessor’s or secured party’s interest in the automobile is significantly impaired.
  2. After a default under an automobile lease or loan agreement by the consumer, the lessor or secured party may not accelerate, take judicial action to collect, or repossess the automobile until the lessor or secured party gives the consumer the notice required by this section and the consumer does not cure the default in the time allowed under this section. A lessor or secured party may initiate a procedure to cure by sending to the consumer, at any time after the consumer has been in default for ten (10) days, a notice of the right to cure the default. Said notice shall be delivered via certified mail, return receipt requested, or via first-class mail, at the consumer’s address last known to the lessor or secured party. The time when notice is given shall be deemed to be upon actual delivery of the notice to the consumer or three (3) business days following the mailing of the notice to the consumer at the consumer’s address last known to the lessor or secured party.
  3. The notice shall be in writing and shall conspicuously state the rights of the consumer upon default in substantially the following form:

    The heading shall read: “Rights of Defaulting consumer under Rhode Island General Laws.” The body of the notice shall read: “You may cure your default in (describe automobile lease or loan agreement in a manner enabling the consumer to identify it) by paying to (name and address of lessor or secured party) (amount due) before (date that is at least twenty-one (21) days after notice is delivered). If you pay this amount within the time allowed you are no longer in default and may continue with the automobile (lease or loan) agreement as though no default has occurred.

    If you do not cure your default by the date stated above, the lessor or secured party may sue you to obtain a judgment for the amount of the debt and may take possession of the automobile.

    If the lessor or secured party takes possession of the automobile, you may get it back by paying the full amount of your debt plus any reasonable expenses incurred by the lessor or secured party if you make the required payment within twenty (20) days after the lessor or secured party takes possession.

    If (the secured party) sells the vehicle repossessed from the consumer for an amount exceeding the amount outstanding on the automobile (loan) agreement including reasonable expenses related to judicial action and or repossession, the excess funds shall be returned promptly to the defaulting consumer.

    You have the right to cure a default only once in any twelve-month (12) period during the period of the automobile (lease or loan) agreement. If you default again within the next twelve (12) months in making your payments, we may exercise our rights without sending you another right to cure notice. If you have questions, telephone (name of lessor or secured party) at (phone number).”

  4. Within the period for cure stated in the notice under this section, the consumer may cure the default by tendering the amount of all unpaid sums due at the time of tender, including any unpaid delinquency or default charges, but without additional security deposit or prepayment of period payments not yet due. Cure restores the rights of the lessor or secured party and consumer under the automobile loan or lease agreement as if the default had not occurred.
  5. A consumer has the right to cure only once in any twelve-month (12) period during the period of the automobile lease or loan agreement.

History of Section. P.L. 2007, ch. 296, § 1; P.L. 2008, ch. 115, § 1; P.L. 2008, ch. 217, § 1; P.L. 2009, ch. 310, § 2; P.L. 2014, ch. 528, § 38.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

NOTES TO DECISIONS

Repossession.

Creditor was not entitled to repossess and dispose of the debtor’s vehicle because the debtor did not default on the loan, which would have given rise to an action for repossession under R.I. Gen. Laws § 6-51-3(2). In re Visnicky, 401 B.R. 61, 2009 Bankr. LEXIS 388 (Bankr. D.R.I. 2009).

6-51-4. Repossession of automobile as a result of default under a loan or lease agreement.

  1. Subject to the provisions of § 6-50-3 , a lessor or secured party under a consumer automobile lease or loan agreement may take possession of the automobile. In taking possession, the lessor or secured party under a consumer automobile lease or loan agreement may proceed without prior hearing pursuant to § 6-50-3 , only if the possession can be obtained without a breach of peace and, unless the consumer consents to an entry, at the time of such entry, without entry upon property owned by, or rented to the consumer, except as provided for in chapter 12.1 of title 39.
  2. Any lessor or secured party obtaining possession of an automobile under the provisions of this chapter shall notify the police department of the city or town in which such possession occurred pursuant to § 6A-9-609(b)(2) .
  3. The consumer under an automobile lease or loan agreement may redeem the automobile from the lessor or secured party and have the automobile lease or loan agreement reinstated at any time within twenty (20) days of the lessor’s or secured party’s taking possession of the automobile, or thereafter until the lessor or secured party has either disposed of the automobile; entered into a contract for its disposition; or gained the right to retain the automobile.
  4. The lessor or secured party may, after gaining possession of the automobile, sell or otherwise dispose of the automobile after the twenty-day (20) redemption period provided for in subsection (c) of this section.

History of Section. P.L. 2007, ch. 296, § 1; P.L. 2014, ch. 528, § 38.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-51-5. Statute of limitations.

An action for default under an automobile lease or loan agreement, including breach of warranty or indemnity, must be commenced within two (2) years after the cause of action accrued. By the original lease or loan agreement the parties may reduce the period of limitation to not less than one year.

History of Section. P.L. 2007, ch. 296, § 1.

Chapter 52 Safe Destruction of Documents Containing Personal Information

6-52-1. Definitions.

As used in this chapter:

  1. “Business” means a sole proprietorship, partnership, corporation, association, limited liability company, or other group, however organized and whether or not organized to operate at a profit, including a financial institution organized, chartered, or holding a license or authorization certificate under the laws of this state or any other state, or the parent, affiliate, or subsidiary of a financial institution. This term includes any entity that destroys records, including, but not limited to, the state, a state agency, or any political subdivision of the state.
  2. “Customer” means an individual who provides personal information to a business for the purpose of purchasing or leasing a product or obtaining a service from the business or whose personal information has been provided to another business from that business.
  3. “Personal information” means the following information that identifies, relates to, describes, or is capable of being associated with a particular individual: his or her signature; social security number; physical characteristics or description; passport number; driver’s license or state identification card number; insurance policy number; bank account number; credit card number; debit card number; any other financial information or confidential health care information, including all information relating to a patient’s health care history; diagnosis condition; treatment; or evaluation obtained from a health care provider who has treated the patient which explicitly or by implication identifies a particular patient.
  4. “Record” means any material, regardless of the physical form, on which personal information is recorded or preserved by any means, including written or spoken words, graphically depicted, printed, or electromagnetically transmitted. Record does not include publicly available directories containing information an individual has voluntarily consented to have publicly disseminated or listed, such as name, address, or telephone number.

History of Section. P.L. 2009, ch. 247, § 1; P.L. 2009, ch. 285, § 1; P.L. 2014, ch. 528, § 39.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-52-2. Safe destruction of documents.

A business shall take reasonable steps to destroy or arrange for the destruction of a customer’s personal information within its custody and control that is no longer to be retained by the business by shredding, erasing, or otherwise destroying and/or modifying the personal information in those records to make it unreadable or indecipherable through any means for the purpose of:

  1. Ensuring the security and confidentiality of customer personal information;
  2. Protecting against any reasonably foreseeable threats or hazards to the security or integrity of customer personal information; and
  3. Protecting against unauthorized access to, or use of, customer personal information that could result in substantial harm or inconvenience to any customer.

History of Section. P.L. 2009, ch. 247, § 1; P.L. 2009, ch. 285, § 1; P.L. 2014, ch. 528, § 39.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-52-3. Violations.

A business that does not take the reasonable steps when disposing of a customer’s personal information set out in § 6-52-2 is in violation of this chapter. For the purposes of this chapter, each record unreasonably disposed of constitutes an individual violation of this chapter.

  1. A customer who incurs actual damages due to a violation of this chapter may bring a civil action in superior court.
  2. Whenever the attorney general has reason to believe that a violation of this chapter has occurred and that proceedings would be in the public interest, the attorney general may bring an action in the name of the state against the business in violation. The business that violates this chapter may be liable in a suit by the attorney general for actual damages of the aggrieved customer and a civil penalty of five hundred dollars ($500) for each violation, not to exceed fifty thousand dollars ($50,000).

History of Section. P.L. 2009, ch. 247, § 1; P.L. 2009, ch. 285, § 1; P.L. 2014, ch. 528, § 39.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-52-4. Exemptions.

This chapter does not apply to any of the following:

  1. Any bank, credit union, or financial institution as defined under the federal Gramm Leach Bliley Law that is subject to the regulation of the Office of the Comptroller of Currency; the Federal Reserve; the National Credit Union Administration; the Securities and Exchange Commission; the Federal Deposit Insurance Corporation; the Federal Trade Commission; the Office of Thrift Supervision; and the U.S. Department of the Treasury or the Department of Business Regulation; and is subject to the privacy and security provisions of the Gramm Leach Bliley Act, 15 U.S.C. § 6801 et seq;
  2. Any health insurer, non-profit hospital, or medical service corporation, as defined in chapters 19 and 20 of title 27, and any health care facility that is subject to the standards for privacy of individually identifiable health information and the security standards for the protection of electronic health information of the Health Insurance Portability and Accountability Act of 1996;
  3. Any consumer report agency that is subject to, and in compliance with, the Federal Credit Reporting Act. 15 U.S. C. § 1681 et seq., as amended; or
  4. Any business that enters into a contractual agreement with another business to complete the destruction of a customer’s personal information and has physical evidence of that contractual agreement.

History of Section. P.L. 2009, ch. 247, § 1; P.L. 2009, ch. 285, § 1; P.L. 2014, ch. 528, § 39.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 53 Purchase and Sale of Tools and Electronics

6-53-1. License required — “Person” defined.

  1. No person, including a pawnbroker, consignment shop, salvage yard operator, or second-hand dealer as defined in § 5-21-1 , shall engage in the business of buying or receiving for the purpose of selling tools or electronic equipment, whether or not readily identifiable with a serial number, to include, but not limited to, generators, powers tools, video game consoles, MP3 players, computers, audio and video equipment, referred to in this chapter as “tools and electronics or trade-ins and store credits of the aforementioned,” from the general public for the purpose of reselling the tools and electronics in any condition without first obtaining a license from the attorney general of the State of Rhode Island (“attorney general”). The attorney general shall not issue any license to a person who has not registered a permanent place of business within the state for the purchase or sale of tools and electronics. The criteria for determining a person’s permanent place of business shall be formulated by the attorney general within ninety (90) days after passage.
  2. The word “person,” when used in this chapter, shall include individuals, partnerships, associations, and corporations.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-2. Application for license — Annual fee — Attorney general to promulgate rules and regulations.

  1. Application for the license shall be in writing, under oath, and in the form prescribed by the attorney general and shall contain the name and address (both of the residence and place of business) of the applicant, and if the applicant is a partnership or association, of every member; and if a corporation, of each officer and director and of the principal owner or owners of the issued and outstanding capital stock; also the city or town with the street and number where the business is to be conducted, and any further information that the attorney general may require. After receipt of an application for a license, the attorney general shall conduct an investigation to determine whether the facts presented in the application are true. The attorney general may also request a record search and a report from the National Crime and Information Center (NCIC) of the Federal Bureau of Investigation. If the application discloses that the applicant has a disqualifying criminal record; or if the investigation indicates that any of the facts presented in the application are not true; or if the records of the department of the attorney general indicate criminal activity on the part of the person signing the application and any other persons named in the application; or if the NCIC report indicates an outstanding warrant for the person signing the application and any other persons named in the application; then the attorney general may initiate a nationwide criminal records check that shall include fingerprints submitted to the Federal Bureau of Investigation regarding the person signing the application and any other persons named in the application. Upon the annual renewal of a license, or the opening of a new branch designated in the license, the attorney general may initiate a nationwide criminal records check that shall include fingerprints submitted to the Federal Bureau of Investigation regarding the licensee and any other persons named in the license. The individual who is subject to the national records check shall be responsible for the cost of conducting such check.
  2. The applicant, at the time of making his or her initial application only, shall pay to the attorney general the sum of fifty dollars ($50.00) as a fee for investigating the application and the additional sum of fifty dollars ($50.00) shall be paid annually. The licensee shall pay an additional fifty dollars ($50.00) annually for each branch designated in the license. Licenses shall not be assignable or transferable to any other person or entity. If the applicant is a holder of a precious metals and dealers license, the fees as required in this section shall be waived.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2013, ch. 502, § 2; P.L. 2013, ch. 507, § 2; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-3. Identification and authority of seller.

  1. Every person required to be licensed under this chapter shall require positive proof of identification with photograph, date of birth, and current address of every seller from whom tools and electronics are to be purchased and shall require the seller to sign a statement, on a form to be approved by the attorney general, stating that the seller is the legal owner of the property or is the agent of the owner authorized to sell the property and when and where or in what manner the property was obtained.
  2. Every person required to be licensed under this chapter shall, before purchasing any tool or electronic device, require the seller, if a minor, to be accompanied by the parent or legal guardian of the minor.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-4. Record of transactions required — Reports to police.

  1. Every person licensed under this chapter shall keep a copy of the report form obtained from or under the direction of the attorney general, containing a comprehensive record of all transactions concerning tools and electronics. The comprehensive record shall be hand printed legibly or typed. The record shall include the name, address, telephone number, and date of birth of the seller; a complete and accurate description of the property purchased or sold, including any serial numbers or other identifying marks or symbols; and the date and hour of the transaction.
  2. All persons licensed under this chapter shall deliver or send electronically to the chief of police of the city or town in which the business is located, and electronically submit to the attorney general, in a manner specified by the attorney general, copies of all report forms from the preceding seven-day (7) period.
  3. Every person licensed under this chapter shall retain a copy of the report for a period of one year from the date of the sale stated on the form.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2013, ch. 502, § 2; P.L. 2013, ch. 507, § 2; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-5. Fourteen day holding period — Recovery of stolen property — Return to rightful owner.

  1. All persons licensed under this chapter shall retain in their possession, in an unaltered condition, for a period of fourteen (14) days, all tools and electronics, including items that do not contain serial numbers or other identifying marks. The fourteen-day (14) holding period shall commence with the date the report of its acquisition was delivered to or received by the chief of police or the attorney general, whichever is later. The records so received by the chief of police or the attorney general shall be available for inspection only by law enforcement officers for law enforcement purposes. If the chief of police has probable cause to believe that tools and electronics have been stolen, he or she may give notice in writing to the person licensed to retain the tools, electronics, or article for an additional period of fifteen (15) days and the person shall retain the property for this additional fifteen-day (15) period unless the notice is recalled, in writing, within the fifteen-day (15) period. Within the fifteen-day (15) period, the chief of police, or his or her designee, shall designate in writing, an officer to secure the property alleged to be stolen and the persons in possession of the property shall deliver the property to the officer upon display of the officer’s written designation by the chief of police or his or her designee. Upon receipt of the property from the officer, the clerk or person in charge of the storage of alleged stolen property for a police department shall enter into a book a description of every article of property alleged to be stolen that was brought to the police department and shall attach a number to each article. The clerk or person in charge of the storage of alleged stolen property shall deliver the property to the owner of the property upon satisfactory proof of ownership, without any cost to the owner, provided that the following steps are followed:
    1. A complete photographic record of the property is made;
    2. A signed declaration of ownership under penalty of perjury is obtained from the person to whom the property is delivered;
    3. The person from whom the custody of the property was taken is served with written notice of the claim of ownership and is given ten (10) days from the mailing of the notice to file a petition in district court objecting to the delivery of the property to the person claiming ownership. If a petition is filed in a timely manner, the district court shall, at a hearing, determine by a preponderance of the evidence whether the property was stolen and if the person claiming ownership of the property is the true owner. The decision of the district court may only be appealable by writ of certiorari to the supreme court.
  2. The clerk or person in charge of the storage of alleged stolen property shall not be liable for damages for any official act performed in good faith in the course of carrying out the provisions of this section. The photographic record of the alleged stolen property shall be allowed to be introduced as evidence in any court of this state in place of the actual, alleged stolen property; provided that the clerk in charge of the storage of the alleged, stolen property shall take photographs of the property and those photographs shall be tagged and marked and remain in his/her possession or control.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2013, ch. 502, § 2; P.L. 2013, ch. 507, § 2; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-6. Persons injured by violations of chapter — Damages and costs.

Any person who has been damaged or injured by the failure of a person required to be licensed under this chapter to comply with the provisions of this chapter may recover the actual damages sustained. The court, in its discretion, may also award punitive damages and/or the costs of suit and reasonable attorneys’ fees to a prevailing plaintiff.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-7. Penalties.

  1. Every person who shall violate the provisions of this chapter shall be guilty of a misdemeanor and shall be fined not more than five hundred dollars ($500) or imprisoned for not more than one year, or both.
  2. If the value of the property involved in a transaction that is in violation of this chapter exceeds five hundred dollars ($500), a person convicted of a violation shall be fined not more than two thousand dollars ($2,000) or imprisoned for not more than three (3) years, or both.
  3. The attorney general shall have the authority to suspend the license of any person required to be licensed under this chapter as a result of violations of this chapter or attorney general regulations leading to penalties under this chapter.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-8. Rules and regulations.

The attorney general is authorized to promulgate, adopt, and enforce any and all rules and regulations deemed necessary to carry out the duties and responsibilities of this chapter. Rules and regulations shall be adopted in accordance with the Administrative Procedures Act, § 42-35-1 et seq.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-9. Refusal to issue license.

The attorney general shall refuse to issue a license when the attorney general has found that the application for the license contains a false representation of a material fact; when investigation reveals that the person applying for the license has previously been guilty of a violation of this chapter or has been a partner of a partnership, member of an association, or an officer or director of a corporation that has previously been guilty of a violation of this chapter; or has a disqualifying criminal record as defined in § 6-53-13 . The attorney general may, in his or her discretion, issue a license if the disqualifying criminal record is more than ten (10) years old.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-10. Suspension, revocation, and nonrenewal of license.

The attorney general, upon his or her own motion or upon receipt of a signed, written complaint that alleges violations of this chapter or of the rules and regulations promulgated pursuant to this chapter, may, after a hearing, suspend, revoke, or refuse to renew any license issued pursuant to this chapter.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-11. Hearings.

Hearings conducted pursuant to this chapter shall be in accordance with the Administrative Procedures Act, § 42-35-1 et seq.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-12. Appeals.

Appeals from a decision by the attorney general shall be made to the sixth division district court in Providence. Appeals from the decision of the sixth division district court shall be to the supreme court in accordance with the Administrative Procedures Act, § 42-35-1 et seq., as amended.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-13. Disqualifying criminal records — Employees or agents of licensee.

A licensee convicted in a court of this state, a court of another state, or in a federal court, of a felony charge of forgery; embezzlement; obtaining money under false pretenses; bribery; larceny; extortion; conspiracy to defraud; receiving stolen goods; burglary; breaking and entering; or any similar offense or offenses; or tax evasion associated with the conduct of business under a license issued pursuant to this chapter; shall forfeit his or her license. Prior to the forfeiture of the license, the licensee may request a hearing on the forfeiture. The attorney general, when so requested, shall hold a hearing. No licensee shall employ or engage any person as an employee or agent while engaging in the business of trading in tools and electronics who has been convicted of any of the offenses as they are described in this section and which shall be deemed to be a disqualifying criminal record.

History of Section. P.L. 2011, ch. 399, § 1; P.L. 2014, ch. 528, § 40.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

6-53-14. Severability.

If any provisions of this chapter or application of this chapter to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this chapter than can be given effect without the invalid provision or phrase or application, and to this end the provisions and phrases of this chapter are severable.

History of Section. P.L. 2011, ch. 399, § 1.

Chapter 54 General Regulatory Provisions the Rhode Island Dealership Preservation and Protection Act

6-54-1. Short title.

This chapter shall be known as the “Rhode Island Dealership Preservation and Protection Act.”

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-2. Definitions.

As used in this chapter:

  1. “Community of interest” means a continuing financial interest between the grantor and the grantee in either the operation of the dealership business or the marketing of such goods or services;
  2. “Dealer” means a person who is a grantee of a dealership situated in this state, and any successor in interest;
  3. “Dealership” means any of the following:
    1. A contract or agreement, either expressed or implied, whether oral or written, between two (2) or more persons, by which a person is granted the right to sell or distribute goods or services, or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol, in which there is a community of interest in the business of offering, selling or distributing goods or services at wholesale, retail, by lease, agreement or otherwise.
  4. “Good cause” means, for the purposes of this act, good cause for terminating, diminishing, canceling or nonrenewal shall mean:
    1. The failure by the dealer to substantially comply with the reasonable requirements imposed by the grantor; or
    2. Any of the reasons listed in subdivisions 6-54-4(a)(1) through (a)(6).
  5. “Grantor” means a person who grants a dealership, and any successor in interest;
  6. “Person” means a natural person, partnership, joint venture, corporation or other entity.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-3. Purposes; rules of construction; variation by contract.

  1. This chapter shall be liberally construed and applied to promote its underlying remedial purposes and policies.
  2. The underlying purposes and policies of this chapter are:
    1. To promote the compelling interest of the public in fair business relations between dealers and grantors, and in the continuation of dealerships on a fair basis;
    2. To protect dealers against unfair treatment by grantors;
    3. To provide dealers with rights and remedies in addition to those existing by contract or common law;
    4. To govern dealerships, including any renewals or amendments, to the full extent consistent with the constitutions of this state and the United States.
  3. The effect of this chapter may not be varied by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to that extent only.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-4. Notice of termination or change in dealership.

  1. Notwithstanding the terms, provisions, or conditions of any agreement to the contrary, a grantor shall provide a dealer sixty (60) days prior written notice of termination, cancellation, or nonrenewal. The notice shall state all reasons for termination, cancellation or nonrenewal and shall provide that the dealer has thirty (30) days in which to cure any claimed deficiency; provided, that a dealer has a right to cure three (3) times in any twelve (12) month period during the period of the dealership agreement. The sixty (60) day notice provisions of this section shall not apply and the termination, cancellation or nonrenewal may be made effective immediately upon written notice, if the reason for termination, cancellation or nonrenewal is in the event the dealer:
    1. Voluntarily abandons the dealership relationship;
    2. Is convicted of a felony offense related to the business conducted pursuant to the dealership;
    3. Engages in any substantial act which tends to materially impair the goodwill of the grantor’s trade name, trademark, service mark, logotype or other commercial symbol;
    4. Makes a material misrepresentation of fact to the grantor relating to the dealership;
    5. Attempts to transfer the dealership (or a portion thereof) without authorization of the grantor; or
    6. Is insolvent, files or suffers to be filed against it any voluntary or involuntary bankruptcy petition, or makes an assignment for the benefit of creditors or similar disposition of assets of the dealer business.
  2. If the reason for termination, cancellation, or nonrenewal is nonpayment of sums due under the dealership, the dealers shall be entitled to written notice of such default, and shall have ten (10) days in which to cure such default from the date of such notice. A dealer has the right to cure three (3) times in any twelve (12) month period during the period of the dealership agreement.
  3. If the reason for termination, cancellation or nonrenewal is for violation of any law, regulation or standard relating to public health or safety, the dealer shall be entitled to immediate written notice and shall have twenty-four (24) hours to cure such violation.
  4. No grantor may terminate, cancel or fail to renew a dealership, directly or indirectly, or otherwise take any action to diminish the dealership or its value, other than for good cause.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-5. Repurchase of inventories.

If a dealership is terminated by the grantor, the grantor, at the option of the dealer, shall repurchase all inventories sold by the grantor to the dealer for resale under the dealership agreement at the fair market value. This section applies only to merchandise with a name, trademark, label or other mark on it which identifies the grantor.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-6. Application to arbitration agreements.

This chapter shall not apply to provisions for the binding arbitration of disputes contained in a dealership agreement, if the criteria for determining whether good cause existed for a termination, cancellation, or nonrenewal, and the relief provided is no less than that provided for in this chapter.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-7. Action for damages and injunctive relief.

If any grantor violates this chapter, a dealer may bring an action against such grantor in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the grantor’s violation, together with the actual costs of the action, including reasonable actual attorneys’ fees, and the dealer also may be granted injunctive relief against unlawful termination, cancellation, or nonrenewal. For purposes of this chapter, damages shall include, without limitation, reasonable compensation for the fair market value of the dealer’s business with relation to the dealership.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-8. Temporary injunctions.

In any action brought by a dealer against a grantor under this chapter, any violation of this chapter by the grantor is deemed an irreparable injury to the dealer in determining if temporary injunctions should issue.

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1.

6-54-9. Nonapplicability.

This chapter shall not apply to malt beverage dealerships; motor vehicle dealerships; insurance agency relationships; any relationship relating to the sale or administration of insurance or any similar contract with an entity organized under chapters 19 or 20 of title 27; fuel distribution dealerships; door-to-door sales; dealerships; and franchises, franchisors, franchisees, dealers and dealerships that are subject to, and comply with or are exempt from, the provisions of chapter 28.1 of title 19, known as the “Rhode Island Franchise Investment Act.”

History of Section. P.L. 2013, ch. 308, § 1; P.L. 2013, ch. 370, § 1; P.L. 2014, ch. 528, § 41.

Effective Dates.

P.L. 2014, ch. 528, § 71 provides that the amendment to this section by that act takes effect on December 31, 2014.

Chapter 55 Military Leases of Motor Vehicles

6-55-1. Lease of motor vehicle by active duty armed forces member — Unilateral termination of lease under certain circumstances.

  1. A lease of a motor vehicle used, or intended to be used, by a servicemember, or a servicemember’s dependents, may be unilaterally terminated if:
    1. The lease is executed by or on behalf of a person who thereafter, and during the term of the lease, enters military service under a call or order specifying a period of not less than one hundred eighty (180) days, or who enters military service under a call or order specifying a period of one hundred eighty (180) days or less, and who, without a break in service, receives orders extending the period of military service to a period of not less than one hundred eighty (180) days; or
    2. The servicemember, while in military service, executes the lease and thereafter receives military orders for a change of permanent station to a location outside the continental United States or to deploy with a military unit, or as an individual in support of a military operation, for a period of not less than one hundred eighty (180) days.
  2. The date of the termination of the lease shall be effective only upon:
    1. The delivery of written notice of the termination from the lessee and a copy of the servicemember’s military orders to the lessor (or the lessor’s grantee), or to the lessor’s agent (or the agent’s grantee); and
    2. The motor vehicle is returned by the lessee to the lessor (or the lessor’s grantee), or to the lessor’s agent (or the agent’s grantee), not later than fifteen (15) days after the date of the delivery of written notice.
  3. Upon termination, the lessor may not impose an early termination charge, but the lessee shall be responsible for the prorated amount of the lease due for the period preceding the effective date of the lease termination, including any taxes, summonses, title, and registration fees, or other obligations and liabilities of the lessee in accordance with the terms of the lease, including reasonable charges to the lessee for excess wear or use and mileage, that are due and unpaid at the time of termination of the lease.
  4. Joint leases.  A lessee’s termination of a lease pursuant to this section shall terminate any obligation a dependent of the lessee may have under the lease.

History of Section. P.L. 2013, ch. 191, § 1; P.L. 2013, ch. 237, § 1.

Chapter 56 Uniform Supplemental Commercial Law for the Uniform Regulation of Virtual-Currency Businesses Act

6-56-1. Short title.

This chapter shall be known and may be cited as the “Uniform Supplemental Commercial Law for the Uniform Regulation of Virtual-Currency Businesses Act.”

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

Compiler’s Notes.

P.L. 2019, ch. 226, § 5, and P.L. 2019, ch. 246, § 5 enacted identical versions of this chapter.

Effective Dates.

P.L. 2019, ch. 226, § 6, provides that this chapter takes effect on January 1, 2020.

P.L. 2019, ch. 246, § 6, provides that this chapter takes effect on January 1, 2020.

6-56-2. Definitions.

  1. As used in this chapter:
    1. “Article 8” means Article 8 of the Uniform Commercial Code, as amended, in substantially the form approved by the American Law Institute and the National Conference of Commissioners on Uniform State Laws.
    2. “Control” has the meaning provided in § 19-14.3-1.1(1) .
    3. “Hague Securities Convention” means the Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary, concluded 5 July, 2006.
    4. “Uniform Commercial Code jurisdiction” means a state that has enacted Article 8.
    5. “Uniform Regulation of Virtual-Currency Businesses Act” means chapter 14.3 of title 19 of the Rhode Island general laws.
    6. “User” means a person for which a licensee has control of virtual currency.
  2. Other definitions applying to this chapter and the sections of the Uniform Regulation of Virtual-Currency Businesses Act in which they appear are as follows:
    1. “Licensee” as set forth in § 19-14.3-1.1 .
    2. “Record” as set forth in § 19-14.3-1.1 .
    3. “Resident” as set forth in § 19-14.3-1.1.
    4. “Sign” as set forth in § 19-14.3-1.1.
    5. “State” as set forth in § 19-14.3-1.1.
    6. “Virtual currency” as set forth in § 19-14-1 .
  3. Other definitions applying to this chapter and the sections of Article 8 in which they appear are as follows:
    1. “Entitlement holder” as set forth in § 8-102(a).
    2. “Financial asset” as set forth in § 8-102(a).
    3. “Securities intermediary” as set forth in § 8-102(a).
    4. “Security” as set forth in § 8-102(a).
    5. “Securities account” as set forth in § 8-501.
  4. The definition of “agreement” applying to this chapter appears in § 1-201(b)(3) of Article 1 of the Uniform Commercial Code, as amended, in substantially the form approved by the American Law Institute and the National Conference of Commissioners on Uniform State Laws.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-3. Scope.

This chapter applies to:

  1. A person or transaction governed by the Uniform Regulation of Virtual-Currency Businesses Act; and
  2. A user that is not a resident if the user or transaction with the user would be governed by the Uniform Regulation of Virtual-Currency Businesses Act if the user were a resident.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-4. Incorporation of Article 8.

  1. The relationship between a licensee or registrant and a user shall be evidenced by an agreement in a record signed by the licensee or registrant and by the user. The agreement:
    1. Shall specify the jurisdiction whose law governs the agreement;
    2. If governed by the law of a jurisdiction that is not a Uniform Commercial Code jurisdiction, the agreement shall:
      1. Specify a Uniform Commercial Code jurisdiction as the securities intermediary’s jurisdiction for the purpose of Article 8; and
      2. State that the law in force in the Uniform Commercial Code jurisdiction under subsection (2)(i) of this section applies to all issues specified in Article 2(1) of the Hague Securities Convention;
    3. Shall state that:
      1. The licensee is a securities intermediary;
      2. The control of virtual currency by the licensee for the benefit of the user creates a securities account of which the user is the entitlement holder;
      3. The parties agree that the virtual currency is to be treated as a financial asset credited or held for credit to the securities account of the user; and
      4. The licensee will not grant a security interest in virtual currency which the licensee or registrant is obligated to maintain under § 8-504(a) of Article 8;
    4. May not provide a standard for the licensee to comply with its duties under Part 5 of Article 8 of the Uniform Commercial Code which is less protective of the user than the standard that would apply under Part 5 of Article 8 of the Uniform Commercial Code in the absence of an agreement concerning the standard; and
    5. May not provide that:
      1. The securities intermediary’s jurisdiction for the purpose of Article 8 is a jurisdiction that is not a Uniform Commercial Code jurisdiction; or
      2. The law in force in a jurisdiction that is not a Uniform Commercial Code jurisdiction applies to all issues specified in Article 2(1) of The Hague Securities Convention.
  2. To the extent that there is no agreement that complies with subsection (a) of this section, the relationship between a licensee or registrant and a user is determined as if the licensee or registrant and the user have an agreement that complies with subsection (a) of this section and specifies that the law of this state governs the agreement.
  3. The effect of this section may not be varied by agreement.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-5. Qualifying office under Hague Securities Convention.

  1. A licensee shall maintain in a state an office that complies with the second sentence of Article 4(1) of The Hague Securities Convention.
  2. The effect of this section may not be varied by agreement.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-6. Effect of failure to comply with this chapter.

Failure to comply with this chapter is a violation of the Uniform Regulation of Virtual-Currency Businesses Act.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-7. No inference as to characterization under other statute or rule.

Treatment of virtual currency as a financial asset credited to a securities account under this chapter and Article 8 of the Uniform Commercial Code does not determine the characterization or treatment of the virtual currency under any other statute or rule.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-8. Supplementary law.

Unless displaced by the particular provisions of this chapter, the principles of law and equity supplement this chapter.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-9. Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-10. Relation to Electronic Signatures in Global and National Commerce Act.

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. § 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. § 7003(b).

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

6-56-11. Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or application of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

History of Section. P.L. 2019, ch. 226, § 5; P.L. 2019, ch. 246, § 5.

Chapter 57 Consumer Service Contracts

6-57-1. Definitions.

For purposes of this section, the following terms shall have the following meanings:

  1. “Consumer product” means any tangible personal property that is distributed in commerce and is normally used for personal, family, or household purposes, including a motor vehicle, and any tangible personal property intended to be attached to or installed in any real property without regard to whether it is so attached or installed.
  2. “Incidental costs” means expenses specified in a vehicle theft protection program warranty that are incurred by the warranty holder due to the failure of a vehicle theft protection program to perform as provided in the contract. Incidental costs may be reimbursed in either a fixed amount specified in the vehicle theft protection program warranty or by use of a formula itemizing specific incidental costs incurred by the warranty holder.
  3. “Maintenance agreement” means a contract of limited duration that provides for scheduled maintenance only.
  4. “Road hazard” means a hazard that is encountered while driving a motor vehicle and that may include, but not be limited to, potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.
  5. “Service contract” means a contract or agreement for a separately stated consideration for any duration to perform the repair, replacement, or maintenance of a consumer product or indemnification for the same, for the operational or structural failure of a consumer product due to a defect in materials, workmanship, accidental damage from handling, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including, but not limited to, towing, rental, and emergency road service and road hazard protection. Service contracts may provide for the repair, replacement, or maintenance of a consumer product for damage resulting from power surges or interruption. “Service contract” also includes a contract or agreement sold for a separately stated consideration for a specific duration that provides for any of the following:
    1. The repair or replacement or indemnification for the repair or replacement of a motor vehicle for the operational or structural failure of one or more parts or systems of the motor vehicle brought about by the failure of an additive product to perform as represented;
    2. The repair or replacement of tires and/or wheels on a motor vehicle damaged as a result of coming into contact with road hazards;
    3. The removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting;
    4. The repair of chips or cracks in or the replacement of motor vehicle windshields as a result of damage caused by road hazards;
    5. The replacement of a motor vehicle key or key fob in the event that the key or key fob becomes inoperable or is lost or stolen; or
    6. Other services or products that may be approved by the director of the department of business regulation.
  6. “Vehicle theft protection product” means a device or system that:
    1. Is installed on or applied to a motor vehicle;
    2. Is designed to prevent loss or damage to a motor vehicle from theft; and
    3. Includes a vehicle theft protection program warranty. “Vehicle theft protection product” does not include fuel additives, oil additives, or other chemical products applied to the engine, transmission, or fuel system, or interior or exterior surfaces of a motor vehicle.
  7. “Vehicle theft protection product warranty” means a written agreement by a warrantor that provides if the vehicle theft protection product fails to prevent loss or damage to a motor vehicle from theft, that the warrantor will pay to or on behalf of the warranty holder specified incidental costs as a result of the failure of the vehicle theft protection product to perform pursuant to the terms of the vehicle theft protection product warranty.

History of Section. P.L. 2019, ch. 188, § 1; P.L. 2019, ch. 243, § 1.

Compiler’s Notes.

This section was enacted by two acts (P.L. 2019, ch. 188, § 1; P.L. 2019, ch. 243, § 1) passed by the 2019 General Assembly. The enactments are the same except in subsections (5)(ii) and (5)(vi). In subsection (5)(ii), P.L. 2019, ch. 188 has “tires or wheels,” while P.L. 2019, ch. 243 has “tires and wheels,” and the language is set out above as “tires and/or wheels.” In subsection (5)(vi), P.L. 2019, ch. 188 has “the director of the department of business regulation,” while P.L. 2019, ch. 243 has “the department of business regulation,” and the language is set out above as enacted by P.L. 2019, ch. 188. P.L. 2019, ch. 188 was passed by the Legislature on June 25, 2019, and P.L. 2019, ch. 243 was passed by the Legislature on June 20, 2019.

Effective Dates.

P.L. 2019, ch. 188, § 2, provides that this chapter takes effect on January 1, 2020.

P.L. 2019, ch. 243, § 2, provides that this chapter takes effect on January 1, 2020.

6-57-2. Service contracts.

The offering, sale, or issuance of a service contract, vehicle theft protection product warranty, or maintenance agreement shall not be considered insurance or subject to the insurance laws of this state unless made expressly applicable thereto.

History of Section. P.L. 2019, ch. 188, § 1; P.L. 2019, ch. 243, § 1.

Chapter 58 Third-Party Delivery Systems

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021.

6-58-1. Definitions.

As used in this title, unless the context otherwise requires:

  1. “Agreement” means a written contractual agreement between the merchant and the third-party delivery service.
  2. “Customer” means the person, business, or other entity that places an order for merchant products through the marketplace.
  3. “Likeness” means identifiable symbols attributed and easily identified as belonging to a specific merchant or retailer.
  4. “Marketplace” means the third party’s proprietary online communication platform where customers can view and search the menus of merchants and place an order for merchant products via the third party’s website or mobile application for delivery or by the third-party delivery service, or an independent contractor of the third-party delivery service, to the customer.
  5. “Merchant” means a food service establishment as set forth in § 21-27-1 or other retail entity.
  6. “Third-party delivery service” means a company, organization, or entity, outside of the operation of the merchant’s business that facilitates delivery or online ordering services to customers.

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021; P.L. 2021, ch. 379, § 1, effective October 11, 2021.

Compiler's Notes.

P.L. 2021, ch. 379, § 1, and P.L. 2021, ch. 380, § 1 enacted identical versions of this chapter.

Effective Dates.

P.L. 2021, ch. 379, § 2, provides that this chapter takes effect on October 11, 2021.

P.L. 2021, ch. 380, § 2, provides that this chapter takes effect on October 11, 2021.

6-58-2. Third-Party use of merchant trademarks and likeness.

A third-party delivery service may not use the likeness, registered trademark, or any intellectual property belonging to the merchant to falsely suggest sponsorship or endorsement by, or affiliation with the merchant.

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021; P.L. 2021, ch. 379, § 1, effective October 11, 2021.

6-58-3. Merchant consent.

A third-party delivery service may not take orders and arrange for the delivery of merchant products through the third-party delivery service’s marketplace without obtaining the written consent of the merchant.

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021; P.L. 2021, ch. 379, § 1, effective October 11, 2021.

6-58-4. Indemnity agreement void.

No agreement entered into in accordance with this chapter shall include a provision, clause, or covenant that requires a merchant to indemnify a third-party delivery service, any independent contractor or agent of the third-party delivery service, for any damages or harm caused by the third-party delivery service or any independent contractor or agent of the third-party delivery service.

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021; P.L. 2021, ch. 379, § 1, effective October 11, 2021.

6-58-5. Enforcement — Penalties.

  1. Any merchant whose likeness was used by the third-party delivery service, or who appears on a third-party delivery service’s marketplace, in violation of this chapter, may bring an action in the superior court of the county in which the merchant or third-party delivery service is found, or in the superior court of the county as is otherwise provided by law, to recover actual damages or five thousand dollars ($5,000), whichever is greater. The court may, in its discretion, and where the conduct involves reckless or callous indifference to statutorily protected rights, award punitive damages and other equitable relief it deems appropriate.
  2. Any third-party delivery service who or that violates this chapter shall pay to the state a civil penalty of not more than one thousand dollars ($1,000) per violation. Each day a violation occurs shall count as a separate violation.

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021; P.L. 2021, ch. 379, § 1, effective October 11, 2021.

6-58-6. Uniformity.

No municipality shall establish, mandate, or implement any law inconsistent with the provisions of this chapter.

History of Section. P.L. 2021, ch. 380, § 1, effective October 11, 2021; P.L. 2021, ch. 379, § 1, effective October 11, 2021.