Practical Tips for Businesses in Light of the “Right to Cure” Changes
The new Right to Cure Amendments to the Consumer Sales Practices Act can get a business out of a tough spot, but only if you know how to use it, and take the early steps to protect yourself. Using this law the right way could be the difference between a reasonable settlement and financial ruin for your company and you personally (an unhappy customer can sue the individual they were dealing with at the company, too).
In order to make sure you are benefiting fully from the law, there are things you need to do before you get sued in court.
- Use the mandatory forms. Ohio’s consumer laws require you to use specific forms for different sales you make to specific consumers. If you do not use a form that you are supposed to, a customer with a smart lawyer might come after you for thousands of dollars. The best defense is prevention–use the right forms.
- Use the right contract language. You may decide that you would prefer arbitration to long, drawn out litigation. If so, put it in your contract. If you are going to use subcontractors, you need to put that in your contract. If you want to limit the warranties you make, put that in the contract. There are special rights available to you, as well, if you include specific language required by the Ohio Revised Code. You need to know when, where, and how to use this language, though. This can be complicated. This is when a lawyer comes in handy.
- If your customer complains, get all the information you can. Customer complaints can easily lead to lawsuits. If the customer has already gotten a quote from someone else for the work, ask the customer for this quote, the amount of the quote, or the name of the company they spoke with. If the customer won’t give you the quote but will tell you the name of the contractor, contact that other contractor to see what their quote was. Get all the information you can from them, before the customer sues you. This information will be critical later when you speak with an attorney about making a Cure Offer.
- Be careful performing corrective work. If your consumer calls you up after terminating your contract and asks you to come back and make some corrections or do another project, promising to pay you, watch out! Businesses have been taken by this tactic before. You may end up not getting paid and the consumer will end up with free work.
- Once you are sued, get to a lawyer immediately. Your Cure Offer has to include very specific language required by statute. If it doesn’t, it’s no good. You also have only a few days to make the offer and send a Notice of Cure Offer to the Court. If you don’t speak with an attorney in time to get a Cure Offer together, you will likely lose your right to resolve the case for 1/3 of the cost. A little help early on can save a lot of money in the end.
Bottom line: If you want to help your business survive these more frequent lawsuits, you need to (1) use the right forms, and (2) get to a lawyer once you start having problems. You can get those forms, and contact a lawyer, right here. If you can’t prevent your problems, get all the information you can and don’t put yourself back into a bad situation.