Purchaser and Participant Remedies; Violations as Unfair or Deceptive Acts; Penalty

1. Law
2. Georgia Code
3. Commerce and Trade
4. Selling and Other Trade Practices
5. Deceptive or Unfair Practices
6. Multilevel Distribution Companies; Sale of Business Opportunities
7. Purchaser and Participant Remedies; Violations as Unfair or Deceptive Acts; Penalty

1. If a business opportunity seller or multilevel distribution company uses any untrue or misleading statements; or fails to comply with Code Section 10-1-411; or fails to deliver the equipment, supplies, or products necessary to begin substantial operation within 45 days of the delivery date stated in the contract; or if the business opportunity seller or multilevel distribution company does not comply with the requirements of Code Sections 10-1-410 through 10-1-416, then, within one year of the date of the contract, upon written notice to the seller, the purchaser or participant may void the contract and shall be entitled to receive from the seller all sums paid to the seller. Upon receipt of such sums, the purchaser or participant shall make available to the seller at the purchaser's or participant's address or at the places at which they are located at the time notice is given, all products, equipment, or supplies received by the purchaser or participant. However, the purchaser or participant shall not be entitled to unjust enrichment by exercising the remedies provided for in this subsection.
2. The violation of any provision of this part shall constitute an unfair or deceptive act or practice in the conduct of a consumer act or practice or consumer transactions under Part 2 of this article, the "Fair Business Practices Act of 1975," and shall authorize an affected participant or purchaser to seek the remedies provided for in Code Section 10-1-399 and in subsection (a) of Code Section 10-1-417.
3. Nothing contained in this part shall be construed to limit, modify, or repeal any provisions of Chapter 5 of this title, the "Georgia Uniform Securities Act of 2008," including, but not limited to, the definition of the term "security" as contained in paragraph (31) of Code Section 10-5-2.
4. Any person who fails to comply with this part shall be guilty of a misdemeanor of a high and aggravated nature. In addition thereto, if the violator is a corporation, each of its officers and directors may be subjected to a like penalty; and, if the violator is a sole proprietorship, the owner thereof may be subjected to a like penalty; and, if the violator is a partnership, each of the partners may be subjected to a like penalty, provided that no person shall be subjected to a like penalty if the person did not have actual knowledge of the acts violating this part.

(Ga. L. 1980, p. 1233, § 7; Ga. L. 1985, p. 947, § 1; Code 1981, §10-1-416; Code 1981, §10-1-417, as redesignated by Ga. L. 1988, p. 1868, § 1; Ga. L. 1991, p. 94, § 10; Ga. L. 1992, p. 2370, § 7; Ga. L. 2008, p. 381, § 5/SB 358.)

Law reviews.

- For note, "The Georgia Sale of Business Opportunities Act," see 1 Ga. St. U.L. Rev. 219 (1985).

JUDICIAL DECISIONS

Remedies dependent on written notice.

- Statutory right to rescind the transaction and recover the investment that is derived from the Sale of Business Opportunities Act, O.C.G.A. § 10-1-410 et seq., is not available to a plaintiff who has not notified the seller of the exercise of that right within one year. League v. United States Postamatic, Inc., 235 Ga. App. 171, 508 S.E.2d 210 (1998).

Jurisdiction over corporate officers in action alleging violations of the Georgia Sale of Opportunities Act.

- Court of appeals did not err in ruling that a trial court had personal jurisdiction over the officers of a limited liability company (LLC) in a physician's action alleging that the officers violated the Sale of Business Opportunities Act, O.C.G.A. § 10-1-415(d)(1), because the allegations of a physician's complaint were sufficient to withstand the attack on the trial court's jurisdiction over the officers on the ground that the officers acted in the officers' corporate capacities; the "fiduciary shield" doctrine did not apply, and the allegations in the complaint supported a finding that the officers were "primary participants" in the LLC's transaction of business within the state, that the cause of action arose from or was connected with such act or transaction, and that the "minimum contacts" test was therefore met. Amerireach.com, LLC v. Walker, 290 Ga. 261, 719 S.E.2d 489 (2011).

Corporate officers personally liable.

- Officers of a limited liability company were "sellers" within the meaning of the Sale of Business Opportunities Act (SBOA), O.C.G.A. § 10-1-410(10), because the sellers were individuals who had a substantive interest in a multilevel distribution company or effectively controlled such company or the company's activities; accordingly, pursuant to the Fair Business Practices Act, O.C.G.A. § 10-1-399(a), and the SBOA, O.C.G.A. § 10-1-417(b), each officer was subject to personal liability for any violation of the SBOA which he or she had committed and which was proved by a physician. Amerireach.com, LLC v. Walker, 290 Ga. 261, 719 S.E.2d 489 (2011).

Cited in Hornsby v. Phillips, 190 Ga. App. 335, 378 S.E.2d 870 (1989); Touchton v. Amway Corp., 247 Ga. App. 269, 543 S.E.2d 782 (2000).

PART 4 FALSE ADVERTISING

Cross references.

- Regulation of advertising of instruments purported to be insured or guaranteed in manner comparable to insured deposit or share account in financial institution, § 7-1-133.

Advertising of child-adoption services, § 19-8-24.

False advertisements relating to food, §§ 26-2-29,26-2-30.

Advertisement and sale of meat generally, § 26-2-150 et seq.

Misrepresentation of food as Kosher, § 26-2-331.

Restrictions on use of outdoor advertising signs, § 32-6-75.

Prohibition against persons or organizations misleading public as to involvement with law enforcement agency, T. 35, C. 10.

Prohibition against use of state or Confederate flag for advertising purposes, § 50-3-8.

Law reviews.

- For article discussing available remedies in this state for deceptive trade practices, in light of the model Unfair Trade Practices and Consumer Protection Law, proposed in Georgia in 1973, 10 Ga. St. B. J. 281 (1973). For article explaining the Unfair Trade Practices and Consumer Protection Act, proposed in Georgia in 1973, 10 Ga. St. B. J. 409 (1974).

RESEARCH REFERENCES

ALR.

- Right to protection against appropriation of advertising matter or methods, 30 A.L.R. 615.

Validity, construction, and effect of state legislation regulating or controlling "bait-and-switch" or "disparagement" advertising or sales practices, 50 A.L.R.3d 1008.

Trade dress simulation of cosmetic products as unfair competition, 86 A.L.R.3d 505.

Unfair competition by imitation in sign or design of business place, 86 A.L.R.3d 884.

Practices forbidden by state deceptive trade practice and consumer protection Acts, 89 A.L.R.3d 449.

Actionable nature of advertising impugning quality or worth of merchandise or products, 42 A.L.R.4th 318.

Validity, construction, and application of regulations dealing with misrepresentation in sale of kosher food, 3 A.L.R.7th 6.

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