A service contract shall not be executed, issued or delivered in this State until the form thereof is approved in writing by the commissioner.
Motor ClubsThe Service Contract
Section § 12250
In California, any service contract must get written approval from the commissioner before it can be finalized or given to customers.
service contract commissioner approval written approval
Section § 12251
In California, when a motor club makes a service contract, it needs to be in two copies. Both copies should have the date and signatures from the motor club, an authorized agent, and the buyer. The club keeps one copy, and the buyer gets the other.
Every service contract executed, issued or delivered in this State shall be made in duplicate and shall be dated and signed by the motor club issuing it. Such contract shall be countersigned by a duly authorized agent of the club, and by the party purchasing the contract. One copy of the contract shall be kept by the club and the other copy shall be delivered to the purchasing party.
service contract motor club duplicate contract
Section § 12252
If you're entering into a service contract in California, certain information must be included. The contract must list the exact name of the service provider and their locations.
It should allow either party to cancel at any time, with a refund for any unused services paid for, calculated fairly based on the contract period.
The contract must clearly state what services are promised, assure no extra fees beyond what's in the contract, define where the services will be provided, and specify when services start.
Additionally, the contract must have a prominent statement at the top saying, “This is not an insurance contract.”
A service contract shall not be executed, issued or delivered in this State unless it contains the following:
(a)CA Insurance Code § 12252(a) The exact corporate or other name of the club.
(b)CA Insurance Code § 12252(b) The exact location of its home office and of its usual place of business in this State, giving street number and city.
(c)CA Insurance Code § 12252(c) A provision that the contract may be canceled at any time by either the club or the holder, and that the holder will, if he has actually paid the consideration, thereupon be entitled to the unused portion of the consideration paid for such contract, calculated on a pro rata basis over the period of the contract, without any deductions.
(d)CA Insurance Code § 12252(d) A provision plainly specifying:
(1)CA Insurance Code § 12252(d)(1) The services promised.
(2)CA Insurance Code § 12252(d)(2) That the holder will not be required to pay any sum, in addition to the amount specified in the contract, for any services thus specified.
(3)CA Insurance Code § 12252(d)(3) The territory wherein such services are to be rendered.
(4)CA Insurance Code § 12252(d)(4) The date when such service will commence.
(e)CA Insurance Code § 12252(e) A statement in not less than fourteen point modern type at the head of said contract stating, “This is not an insurance contract.”
service contract requirements service provider name home office location
Section § 12253
This law states that you can't encourage or help someone else to buy a service contract from a club that doesn't have the official approval required to operate legally.
A person shall not solicit or aid in the solicitation of another person to purchase a service contract issued by a club not having a certificate of authority procured pursuant to this part.
service contract solicitation certificate of authority
Section § 12254
This law says that clubs and their representatives cannot lie or provide false information about the terms, benefits, or privileges of a service contract they offer or plan to offer.
A club or an officer or agent thereof shall not in any manner misrepresent the terms, benefits or privileges of any service contract issued or to be issued by it.
misrepresentation service contract club officer
Section § 12255
This law states that if a service contract is made, issued, or delivered in violation of any part of the law, it is still considered valid and enforceable against the club that issued it.
Any service contract made, issued or delivered contrary to any provision of this part shall nevertheless be valid and binding on the club.
service contract valid contract binding agreement
Section § 12256
This section allows a motor club to choose not to create or provide service contracts in the state. However, they can still distribute informational materials like brochures or advertisements, as long as these materials are not used as contracts and don't need the commissioner's prior approval.
If a motor club opts out of using service contracts, they must provide their members with some form of membership proof, like cards or tokens.
Any motor club may elect not to execute, issue, or deliver service contracts in this state. A club may distribute brochures, prospectuses, or advertisements which are not contracts. Such materials may be issued or delivered without prior approval of the commissioner.
If a club does not use service contracts it shall execute, issue, and deliver membership cards, tokens, or other indicia of membership to its members.
motor club service contracts brochures
