LD 1640
pg. 6
Page 5 of 11 An Act Regarding Service Contracts Page 7 of 11
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LR 2384
Item 1

 
paragraph A must contain a statement in substantially the
following form:__"Obligations of the provider under this
service contract are backed by the full faith and credit of
the provider."

 
C.__Service contracts must state the name and address of the
provider and must identify any administrator other than the
provider, the service contract seller and the service
contract holder to the extent that the name of the service
contract holder has been furnished by the service contract
holder.__The identities of such parties are not required to
be preprinted on the service contract and may be added to
the service contract at the time of sale.

 
D.__Service contracts must state the purchase price of the
service contract and the terms under which the service
contract is sold.__The purchase price is not required to be
preprinted on the service contract and may be negotiated at
the time of sale with the service contract holder.

 
E.__Service contracts must state the existence of any
deductible amount, if applicable.

 
F.__Service contracts must specify the merchandise and
services to be provided and any limitations, exceptions or
exclusions.

 
G.__Service contracts covering automobiles must state
whether the use of nonoriginal manufacturer's parts is
allowed.

 
H.__Service contracts must state any restrictions governing
the transferability of the service contract, if applicable.

 
I.__Service contracts must state the terms, restrictions or
conditions governing cancellation of the service contract
prior to the termination or expiration date of the service
contract by either the provider or the service contract
holder.__The provider of the service contract shall mail a
written notice to the service contract holder at the last
known address of the service contract holder contained in
the records of the provider at least 5 days prior to
cancellation by the provider.__Prior notice is not required
if the reason for cancellation is nonpayment of the provider
fee, a material misrepresentation by the service contract
holder to the provider or a substantial breach of duties by
the service contract holder relating to the covered product
or its use.__The notice must state the effective date of the
cancellation and the reason for the cancellation.

 
J.__Service contracts must set forth the obligations and duties
of the service contract holder, such as the duty to


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