Michigan Laws 328.225 – Prices or quotations of prices; requirements; exception; manipulation of prices prohibited; provision for revocation of contract; refund; disclosure of right to cancel contract and amount of refund; d
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(1) All prices or quotations of prices contained in a prepaid contract, offer, or solicitation shall be stated in compliance with applicable federal and state laws and regulations. In addition, a person who offers either merchandise or funeral or cemetery services on a preneed or at-need basis shall comply with the price disclosure rules of the federal trade commission, code of federal regulations, 16 C.F.R., part 453, whether or not the rules by their own terms apply to the offering. This subsection does not apply to the sale of any interest covered by the endowment care trust requirements of the cemetery regulation act, 1968 PA 251, MCL 456.521 to 456.543.
(2) A person who sells or offers to sell both funeral goods or services and nonfuneral goods or services as part of the same transaction or series of transactions shall not manipulate the relative prices of the goods or services so as to allocate a disproportionate share of the total price to nonfuneral property or services.
Terms Used In Michigan Laws 328.225
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Cemetery: means 1, or a combination of more than 1, of the following:
(i) A burial ground for earth interments. See Michigan Laws 328.213Cemetery services: means cremations, grave openings and closings, and installation of grave memorials. See Michigan Laws 328.213 Contract: A legal written agreement that becomes binding when signed. Contract beneficiary: means an individual specified or implied in a prepaid contract for whom the funeral or cemetery services or merchandise shall be performed or furnished after death. See Michigan Laws 328.213 Contract buyer: means an individual, including a contract beneficiary, who purchases merchandise or funeral or cemetery services pursuant to a prepaid contract. See Michigan Laws 328.213 contract price: means money and other property to be paid as total compensation to a contract seller or provider for the funeral or cemetery services or merchandise, or both, to be performed or furnished under a prepaid contract, late payment penalties, payments required to be made to a governmental agency at the time the contract is entered into, and income earned on the funds. See Michigan Laws 328.213 Contract seller: means a person who sells, makes available, or provides prepaid contracts. See Michigan Laws 328.213 Escrow: Money given to a third party to be held for payment until certain conditions are met. Funds: means all money or other consideration actually received from a contract buyer by a contract seller or provider or an assignee from the contract buyer in connection with any aspect of the sale of a prepaid contract, including finance charges, but does not include late payment penalties, payments required to be made to a governmental agency at the time the contract is entered into, or a commission authorized by section 12(1). See Michigan Laws 328.214 Guaranteed price contract: means a prepaid contract under which funds received are held pursuant to an escrow agreement. See Michigan Laws 328.214 Income: means the money earned by the investment of the principal, including, but not limited to, interest, dividends, and gains or losses on the sale of, deposit of, or exchange of, property using invested principal amounts. See Michigan Laws 328.214 merchandise: means both of the following:
(i) Cemetery burial vaults or other outside containers, grave memorials, and urns. See Michigan Laws 328.214Nonguaranteed price contract: means a prepaid contract under which funds received are held pursuant to an escrow agreement between a contract seller or provider and a contract buyer and are applied to the cost of the merchandise or funeral or cemetery services, which merchandise or funeral or cemetery services may be selected by the contract buyer at the time the contract is signed or as selected by a person legally authorized to procure merchandise or funeral or cemetery services at the time of death of the contract beneficiary. See Michigan Laws 328.215 Person: means an individual, group of individuals, sole proprietorship, partnership, limited liability company, association, corporation, government agency, cemetery, or a combination of these legal entities. See Michigan Laws 328.215 Prepaid contract: means a contract requiring payment in advance for funeral or cemetery services or merchandise, physical delivery and retention of which would occur after death under a guaranteed price contract or a nonguaranteed price contract. See Michigan Laws 328.215 Principal: means the money or other consideration actually deposited in the escrow or trust accounts required by this act. See Michigan Laws 328.215 Provider: means any person who furnishes or agrees to furnish merchandise or funeral or cemetery services pursuant to a prepaid contract, whether or not that person is the contract seller. See Michigan Laws 328.215 state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
(3) All prepaid contracts shall provide that a contract buyer may revoke the prepaid contract within 10 business days after entering into the prepaid contract and that upon revocation, all funds paid to the contract seller or provider shall be refunded. This provision shall be conspicuously set forth in the prepaid contract at a place immediately before the place where the contract buyer is to sign his or her name.
(4) A prepaid contract shall disclose the contract buyer’s right to cancel the prepaid contract and the amount of the refund to which the contract buyer or that person’s estate is entitled upon cancellation. The disclosure shall be stated substantially as follows:
“This contract may be canceled either before death or after death by the buyer or, if the buyer is deceased, by the person or persons legally authorized to make funeral or cemetery arrangements. If the contract is canceled, the buyer or the buyer’s estate is entitled to receive a refund of ____% of the contract price and any income as required by law.”
In addition, if a commission is charged pursuant to section 12, the amount of the commission and the fact that it is a charge which is in addition to the contract price shall be stated in the prepaid funeral contract. If a printed contract form is used, the disclosures required by this subsection shall be stated in boldfaced type.
(5) This act does not authorize a contract seller or provider to perform or offer to perform services for which a mortuary science license or funeral establishment licensed is required by article 18 of the occupational code, 1980 PA 299, MCL 339.1801 to 339.1812, unless that person holds the required license or licenses and does not require a contract seller or a provider to possess this license or any other license to engage in an activity covered under this act for which a license is not required by any other act.
(6) A prepaid contract shall provide that the contract buyer may designate a new contract beneficiary any time before the death of the contract beneficiary originally specified in the prepaid contract by providing written notice to the contract seller of a nonguaranteed price contract or the provider designated to furnish merchandise or funeral or cemetery services pursuant to a guaranteed price contract. Notwithstanding any other provisions of law, a contract buyer may designate the estate of a deceased person as the contract beneficiary, or provide that the contract beneficiary is the first of 2 or more designated persons to die.
(7) A prepaid contract that is a nonguaranteed price contract shall have it indicated clearly on the prepaid contract that it is a nonguaranteed price contract and that the actual costs of the merchandise or funeral or cemetery services delivered at the time of death may be greater or less than the amount of principal and income in the escrow account, and that the buyer, the buyer’s estate, or the person or persons legally entitled to make funeral or cemetery arrangements, or both, are not obligated to purchase specific merchandise and services which were selected before the death of the contract beneficiary or to expend a specific amount on merchandise or funeral or cemetery services.