Louisiana Revised Statutes 51:1822 – Surety bond
Terms Used In Louisiana Revised Statutes 51:1822
- Agent: means a person who solicits prospective purchasers or negotiates on behalf of a seller. See Louisiana Revised Statutes 51:1821
- Business opportunity: means the sale or lease for an initial required consideration exceeding three hundred dollars of any goods or services which are transferred to a purchaser for the purpose of enabling the purchaser to start a business, and in which the seller or agent:
(a) Represents that the seller or an entity to which it will refer the purchaser, will provide or assist the purchaser in finding business locations on premises neither owned nor leased by the purchaser or seller for the use or operation of vending machines, racks, display cases, currency-operated amusement machines, or other similar devices; or
(b) Represents that the seller, or any entity to which it will refer the purchaser, will purchase any or all products to be sold, made, produced, fabricated, assembled, grown, bred, or modified by the purchaser using in whole or in part the supplies, services, or goods sold to the purchaser by the seller; or
(c) Guarantees that the purchaser is to derive income from the business opportunity which exceeds the price paid for the business opportunity, or that the seller is to refund all or part of the price paid for the business opportunity, or repurchase any of the products, equipment, supplies, or goods supplied by the seller, if the purchaser is unsatisfied with the business opportunity; or
(d) Represents that for a fee exceeding three hundred dollars the seller will provide a sales plan or marketing program which will enable the purchaser to derive income from the business opportunity which exceeds the price paid for the business opportunity. See Louisiana Revised Statutes 51:1821
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Department: means the Department of Justice. See Louisiana Revised Statutes 51:1821
- Seller: means a person or entity which sells or leases, or offers to sell or to lease a business opportunity. See Louisiana Revised Statutes 51:1821
A. A business opportunity seller shall maintain a surety bond issued by a surety company authorized to do business in this state in the amount of fifty thousand dollars. The bond shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the seller’s dishonesty, unfair or deceptive practice, breach of the contract for the business opportunity sale or any duty arising therefrom, or violation of law.
B. A business opportunity agent, whether an independent contractor, a broker, or an employee of the seller, shall maintain a surety bond issued by a surety company authorized to do business in this state in the amount of twenty-five thousand dollars. The bond shall be in favor of the state for the use, benefit, and indemnity of any person who suffers any damage or loss as a result of the agent’s dishonesty, unfair or deceptive practice, breach of a duty, or violation of law.
C. The department may at any time require a seller or agent to file a new or additional bond in the amount of the original bond whenever he deems the security of a bond required by this Section to be unsatisfactory or finds that a bond has become insufficient to satisfy all claims accrued or contingent against the principal.
D. The state or any person claiming against the bond may maintain an action for damages or other relief against the principal or the surety, or both. The liability of the surety for all breaches of the conditions of the bond provided herein shall in no event exceed the amount of the bond.
E. The seller and agent shall file the bonds required of them with the department before doing any business in this state, including advertising or soliciting. New or additional bonds shall be filed before continuing business in this state.
F. Whoever violates the provisions of Subsections A, B, or E of this Section shall be guilty of a misdemeanor, punishable by a fine of five hundred dollars and by imprisonment for not more than six months.
G. The bonding requirements of this Section shall apply only to business opportunities as defined in La. Rev. Stat. 51:1821(1)(a), (b), or (c).
H. The term of a bond required by this Section shall be continuous. The surety on said bond may terminate the bond upon giving a sixty-day written notice to the assistant secretary and the principal; however, the liability of the surety for the acts of the principal shall continue during the sixty-day period. The notice shall not release the surety from liability which accrues before the termination becomes final, but which is discovered after that date.
Acts 1988, No. 625, §6; Acts 2001, No. 819, §1.